Literature Week 1 – OB
Paauwe, J., & Farndale, E. (2017) Strategy, HRM, and performance: a
contextual approach. Oxford University Press: Chapter 5
Black box phenomenon: lack of insight in the underlying mechanisms and processes that
explain ‘why’ HRM practices and systems contribute to performance.
HRM outcomes include satisfaction, motivation and turnover.
Organisation outcomes include productivity, sales, profit.
There is a need for greater conceptual clarity and theorizing black box problem, link
between hrm practices/policies vs organization outcomes.
3 levels of outcomes
- Financial: profit, sales
- Organizational: productivity, quality
- HRM: attitudes, behaviors, satisfaction.
However, distance PI vs HRM can be large, and is subject to other business
interventions.
Financial indicators can be influenced by internal and external factors that have
nothing to do with employees (profit, market value).
PI like employee attitudes and behavior can affect organizational outcomes
Including human capital and motivation as mediating variables/intermediate outcomes ->
underlying mechanisms through which HRM is associated with organizational outcomes.
3 HRM-practice dimensions/bundles:
- Skill-enhancing: increases human capital
- Motivation-enhancing: increases motivation
- Opportunity-enhacing
- These all lead to financial outcomes. First two are most critical mediating factors.
1
, 3 theories
- Contingency (org. level)
- Resource based review (RBV) (org. level)
- AMO, ability-motivation-opportunity framework (individ. Level)
Black box = unclear mechanism going on between input and output of a relationship. HRM is
a broad concept, influenced by many factors.
- Micro level HRM: individual employee, his/her attitudes and behaviors and
organizational psychology
- Meso level HRM: impact of HRM practices on organizational level
- Macro level HRM: influence of the external context
2
Paauwe, J., & Farndale, E. (2017) Strategy, HRM, and performance: a
contextual approach. Oxford University Press: Chapter 5
Black box phenomenon: lack of insight in the underlying mechanisms and processes that
explain ‘why’ HRM practices and systems contribute to performance.
HRM outcomes include satisfaction, motivation and turnover.
Organisation outcomes include productivity, sales, profit.
There is a need for greater conceptual clarity and theorizing black box problem, link
between hrm practices/policies vs organization outcomes.
3 levels of outcomes
- Financial: profit, sales
- Organizational: productivity, quality
- HRM: attitudes, behaviors, satisfaction.
However, distance PI vs HRM can be large, and is subject to other business
interventions.
Financial indicators can be influenced by internal and external factors that have
nothing to do with employees (profit, market value).
PI like employee attitudes and behavior can affect organizational outcomes
Including human capital and motivation as mediating variables/intermediate outcomes ->
underlying mechanisms through which HRM is associated with organizational outcomes.
3 HRM-practice dimensions/bundles:
- Skill-enhancing: increases human capital
- Motivation-enhancing: increases motivation
- Opportunity-enhacing
- These all lead to financial outcomes. First two are most critical mediating factors.
1
, 3 theories
- Contingency (org. level)
- Resource based review (RBV) (org. level)
- AMO, ability-motivation-opportunity framework (individ. Level)
Black box = unclear mechanism going on between input and output of a relationship. HRM is
a broad concept, influenced by many factors.
- Micro level HRM: individual employee, his/her attitudes and behaviors and
organizational psychology
- Meso level HRM: impact of HRM practices on organizational level
- Macro level HRM: influence of the external context
2
