Routledge Revivals

New Perspectives on
Human Resource Management

The idea of human resource management has become topical and con-
troversial. The term suggests that people in any organization are an asset to be
upgraded and fully utilized rather than merely a variable cost to be mini-
mized. This in turn implies that the way in which people are managed is a
matter of crucial strategic concern.

Increased international competition has produced various initiatives world-

wide for new approaches to management, in particular human resource man-
agement. This searching set of interpretations, first published in 1989, will be
of interest to serious practitioners and students alike.
This page intentionally left blank
 New Perspectives on
Human Resource Management

Edited by
John Storey
ROUTLEDGE

Routledge
RE S Taylor & Francis Group
VI V AL
First published in 1989
by Routledge
This edition first published in 2015 by Routledge
2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
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© 1989 John Storey

The right of John Storey to be identified as editor of this work has been asserted by him
in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or utilised in
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New Perspectives on Human
Resource Management

Edited by
John Storey

Routledge
London and New York
First published 1989 by Routledge
11 New Fetter Lane, London EC4P 4EE
29 West 35th Street, New York, NY WOOl
© 1989 John Storey (in the editorial material and in his own contributions).
Chapter2 © Karen Legge; Chapter3 © David E. Guest; Chapter4 ©
Derek Torrington; Chapter5 © John Purcell; Chapter6 © Barbara
Townley; Chapter7 © Ewart Keep; Chapter8 © Tom Schuller; Chapter9
© Nicholas Kinnie; Chapter 10 © Peter Armstrong; Chapter 11 © John
Storey and Keith Sisson.
Phototypesetin lOpt Times by
Mews Photosetting,Beckenham,Kent
Printed and bound in GreatBritain by
Biddies Ltd, Guildford and King's Lynn
All rights reserved.No part of this book may be reprinted or reproducedor
utilized in any form or by any electronic, mechanical,or other means, now
known or hereafterinvented, including photocopyingand recording, or in
any information storageor retrieval system, without permissionin writing
from the publishers.
British Library Cataloguing in Publication Data
New perspectiveson human resourcemanagement.
1. Personnelmanagement
I. Storey, John, 1947-
658.3
ISBN 0-415-01040-3
0-415-01041-1(pbk)
Library of CongressCataloging-in-PublicationData
New perspectiveson human resourcemanagement/ edited by John Storey.
p. cm.
Bibliography: p.
Includes index.
ISBN 0-415-01040-3(U.S.). - ISBN 0-415-01041-1(U.S.: pbk.)
1. Personnelmanagement.I. Storey, John.
HF5549.N375 1989
658.3-dc20 89-33067
CIP
Contents

List of tables vii

List of figures Vlll
List of contributors IX
Preface XI
Abbreviations xiv

1 Introduction: from personnelmanagementto human

resourcemanagement 1
John Storey
2 Human resourcemanagement:a critical analysis 19
Karen Legge
3 Human resourcemanagement:its implications for
industrial relations and trade unions 41
David E. Guest
4 Human resourcemanagementand the personnelfunction 56
Derek Torrington
5 The impact of corporatestrategyon human resource
management 67
John Purcell
6 Selectionand appraisal:reconstituting'social relations'? 92
BarbaraTownley
7 Corporatetraining strategies:the vital component? 109
Ewart Keep
8 Financial participation 126
Tom Schuller
9 Human resourcemanagementand changesin
managementcontrol systems 137
Nicholas Kinnie

v
Contents

10 Limits and possibilities for HRM in an age of

managementaccountancy 154
Peter Armstrong
11 Looking to the future 167
John Storey and Keith Sisson

Bibliography 184
Index 199

vi
Tables

Table 1.1 A human resourcemanagementframework 11

Table 5.1 A verage number of establishmentsowned by large
enterprisesin UK manufacturing,1958-85 68
Table 5.2 Top UK industrial companies:employmentand
turnover, 1986 69
Table S.l Forms of financial participation 128
Table S.2 Contribution of membertrusteesto trustee board
activities: as reported by pensionsmanagers(PM),
membertrustees(MT), and case-studyinterviewees
(CS) 134
Table 9.1 The four manufacturingcasesstudied 138

vii
Figures

Figure 1.1 The human resourcemanagementcycle 7

Figure 5.1 Diversification strategyof top 200 UK corporations
(% distribution by number of companies) 69
Figure 5.2 Three levels of strategicdecision making 72
Figure 5.3 Portfolio planning growth-sharematrix 74

viii
Contributors

Peter Armstrong, Lecturer, University of East Anglia

David Guest,SeniorLecturerin Industrial Relations,London Schoolof Economics
Ewart Keep, ResearchFellow, Industrial Relations ResearchUnit, University
of Warwick
Nicholas Kinnie, Lecturer in Industrial Relations, University of Bath
Karen Legge, Readerin PersonnelManagement,Imperial College, London
John Purcell, Fellow, TempletonCollege, Oxford
Tom Schuller, Senior Lecturer, University of Warwick
Keith Sisson, Professorof Industrial Relations and Director of the Industrial
Relations ResearchUnit, University of Warwick
John Storey, Principal ResearchFellow, Industrial Relations ResearchUnit,
University of Warwick
Derek Torrington, Senior Lecturer in PersonnelManagement,University of
ManchesterInstitute of Scienceand Technology
BarbaraTownley, Lecturer inIndustrial Relations,Industrial RelationsResearch
Unit, University of Warwick

ix
This page intentionally left blank
Preface

The idea for a book of this kind was conceivedduring the early stagesof a major
researchproject upon which I was engagedfrom January1986. But there is also
a more generaland a more immediatebackgroundto the volume. The former
is the coordinatedprogrammeof researchin the IRRU at the University of
Warwick directedat assessing'the managerialrole in industrial relations'broadly
defined. A numberof interlinked projects, most of them funded by the ESRC,
were launchedaround three years ago. They include wide-scalesurvey work
(Edwards 1987; Marginsonet af. 1988); analysisof public policy regardingthe
managementof training (Keep 1987); the managementof collective bargaining
(Sisson 1988); theoreticaland historical analysisof the divisions within and the
competition betweenmanagerialprofessions(Armstrong 1988); assessmentof
flexible employmentstrategies(Pollert 1988); and case-studywork on changes
in the managementof the employmentrelationshipwith particular emphasison
the developing role of general and line managers(Storey 1987a and band
forthcoming). Also part of the generalbackgroundhas beenthe ferment in the
whole areaof managementin recentyearsand a growing awarenessof the urgent
need to pull many of the separatestrandstogetherin order to begin a reasoned
assessment of the meaning and significanceof thesedevelopments.
The more immediatetrigger to this particularcollection of chaptershas been
the organizationof Warwick conferencesand shortcourseson the themesdiscussed
herein. For example,in conjunctionwith the Departmentof Continuing Educa-
tion, the IRRU is running a seriesof workshopsfor lecturersin higher educa-
tion; the one on human resourcemanagementhas now run twice and has been
oversubscribed.New modulesin suchcoursesas BTEC probably representone
explanationfor the level of current demandfor knowledge in this area. But it
is by no meansthe only one. At a time when it was often thoughtthat hard-pressed
MBA studentswould flock mainly to electivessuchas accountingand marketing
which at the moment commandhigh currency in the jobs' market, the human
resourcemanagementelectiveson the various versionsof the MBA at Warwick
and elsewhere,have in fact beenenjoying popularsupportand acclaim. Noticeably
the demandcomes not only from studentsbut from their employing organiza-
tions. Moreover, if we move beyond the MBA, it is also apparentthat senior

xi
New perspectives on human resource management

managementfrom a wide spectrumof organizationsare keen to develop their

understandingin this areaand this is amply demonstratedby the take-upof places
at workshopsand conferenceswhich havebeenoffered in recentmonths.In Britain
there are plans for two new journals on human resourcemanagementand at
Warwick therehave beenproposalsfor a distancelearningmaster'sdegreewith
the same title - moreover, there is much institutional support from the major
professionalbodies for such initiatives.
From thesefew examplesit may be gaugedthat the subject(or field of enquiry)
is burgeoning.But what is remarkableis that thereis very little rigorousacademic
researchto underpinthe debate.Therewas, in consequence,an evidentgap and
so, in addition to preparinga researchmonographwhich would report on recent
field work in the area(Storey, forthcoming), it seemedsensibleto bring together
a numberof key contributorswhosework would bring a variety of perspectives
to bear. The final trigger to the actualproductionof this book was a researchers'
workshop at the University of Warwick in January 1988. Invited guestsfrom
most of the major businessschools and industrial-relationsand management
departmentsgatheredtogetherto assessthe kind of issuesaddressedin this book.
The workshop was novel in a numberof respectsand the productionof formal
papers, for example, was discouraged;the intention was to examine these
importantissueswithout the constraintsof 'defending'preparedpositions.Hence
the chaptersin this book are decidedly not an edited collection of conference
papers.Rather, they are especiallycommissionedpaperson themeswhich the
contributorshaveall had a chanceto debatecollectively beforeevendrafting their
chapters.
The intendedaudiencefor this book includesanyonewho is seriouslyinterested
in making senseof what can fairly be described,without overstatement,as 'the
HRM phenomenon'.It would be tediousto go throughthe routine of elaborating
a list of typesof potentialreaders;suffice it to say that our experienceof managerial
practitionersand trade-unionrepresentatives through our conferenceprogramme
and throughour researchactivity, leadsus to emphasizethe point that in addition
to the studentsfrom a rangeof academicdisciplines who are likely to find this
book of usetherewill alsobe a considerablenumberof otherreaders.For example,
moves towards devolved budgeting, new forms of appraisaland performance-
linked pay in such diverse settingsas health care and educationas well as the
private-sectorservicesand manufacturing,suggestthat a wide rangeof general
readersmay also find the commentariesin this book to be of interest.By no means,
therefore, will it be personnelspecialistsalone who will be looking to a book
of this type to cut throughthe pietiesand the 'motherhoods'on communications,
'walking the job', and the like. General managersand line managersfrom all
sectorsmay be expectedto look to it in order to gain accessto the lessprescriptive
but, we trust, the more enduringlyuseful forms of searchinganalysisand informed
commentarywhich we have striven to produce here.
Acknowledgementsare due to the ESRC for funding much of the work upon
which many of the ensuinganalysesdraw. In addition I would like to thank all

xii
 Preface

the people who devotedtheir time and energy in cooperatingin the project on
the managementof human resources on which I have beenengagedsince 1986.
Thanksare also due to colleagueswithin the IRRU who continue,in multifarious
ways, to recreateit as a unique institution.

xiii
Abbreviations

ACAS Advisory, Conciliation and Arbitration Service

BSC British Steel Corporation
CBI Confederationof British Industry
DE Departmentof Employment
EETPU Electrical, Electronic, Telecommunicationsand
Plumbing Union
ESRC Economic and Social ResearchCouncil
FT The Financial Times
GNP Gross National Product
HMSO Her Majesty's Stationery Office
HRD Human ResourceDevelopment
HRM Human ResourceManagement
IBM International BusinessMachines
IDS Incomes Data Services
IPM Institute of PersonnelManagement
IRRR Industrial Relations Review and Report
IRRU Industrial Relations ResearchUnit
MBA Master of BusinessAdministration
MSC Manpower ServicesCommission
NEDO National Economic DevelopmentOffice
OD OrganizationalDevelopment
QWL Quality of Working Life
SAYE Save As You Earn
TUC Trades Union Congress
TVEI Technical and Vocational EducationalInitiative
WIRSI Workplace Industrial Relations Survey, Number 1
WIRS2 Workplace Industrial Relations Survey, Number 2

xiv
Chapter one

Introduction: from personnel

management to human resource
management
John Storey

It seemshard to deny that there is a highly chargedatmospheresurroundingthe

discussionof managementat the presenttime. Fuelledby such best-sellingbooks
as In Search of Excellence, The Change Masters and Iacocca, the cult of the
managerappears,if anything, to have been never so entrenched.At the same
time, the idea of 'the managementof change'has come to assumea place which
is part and parcelof the everydayjob responsibilityof the manager.It is no longer
a special sub-routineonly broughtout for specialoccasionssuch as the opening
of a new facility or a corporatemerger. There would appearto be a plethora
of initiatives, programmesand innovationsof all kinds. From the financial and
managementpagesand from such sourcesas IDS and IRS, examplesassail us
of movesto introducetotal quality, to re-differentiateorganizationsinto strategic
businessunits, to enhanceflexibility, to install performance-relatedpay, to institute
novel forms of employmentcontract,and the launch is announcedof many other
such initiatives. The image is of restlessness and organizationalinnovation. The
frequently heraldeddisplacement,or at leastmodification, of bureaucracyas the
dominant organizationalform seemsbelatedly to be taking place.
One cannot help but be impressedby the widespreadawarenessamong
practitionersof suchexperimentation;meetingswith managersat all levels even
in conventional, mainstreamorganizationssoon reveal the fact that current
'flavours' havepermeatedthe managerialconsciousness and imaginationin a way
that was neverthe casewith, for example,aD, job enrichment,QWL and other
much-vaunted 'movements' of previous decadeswhich some critics cite as
equivalents.
Thereis someprima facie evidencethat in responseto conditionsof heightened
competition and a range of other environmentalchanges,many if not most of
the organizationswhich survived the severerecessionof the early 1980s have
initiated changesof one sort or anotherin order to improve their viability. These
have included structural changessuch as a move beyond divisionalisation into
strategicbusinessunits (SBUs). The underlyingidea hereis to promoteand exploit
entrepreneurialbehaviour. Hence, even in single-businessand single-product
organizationswhich have lent themselvesto neitherdivisionalizationnor SBUs,
the cognatetendencyhas manifesteditself in attemptsto generatethe idea that

1
New perspectives on human resource management

separateunits, departments,areasor zonescould and shouldbe treatedas if they

were 'mini-businesses'.
On the face of it thesesortsof changeshave beenassociatedwith, and possibly
underpinnedby, accompanyingcultural changes.Notable here has been the
attention given to in-company campaigns (usually steered by management
consultants)to establisha cultureof 'total quality' and to give renewedemphasis
to customer-orientation,innovation,enterpriseand competitiveness.Developments
of this kind havegiven rise to, and in turn beenfuelled by, an influential literature
on 'excellence'and 'corporateculture'.
For thoseinterestedin the managementof the employmentrelationship,two
questionsimmediately arise even from such a brief sketch of recent business
initiatives. First, to what extent do they mark a paradigmaticbreak with a
previously predominatingform? Second,what associationdo they havewith the
way labour is managed?
The latter issue is consideredfirst. Clearly, the battery of changesindicated
abovecannot, in themselves,be thought of as necessarilycoterminouswith the
phrase'human resource management' - no matter how widely that conceptis
stretched. But they might suggesta set of circumstanceswhich impel senior
managerswho used to take little interest in 'industrial relations' (see Winkler
1974) to identify the peoplefactor as peculiarly critical in successfullymanaging
the transformationsoutlined. This may in part derive simply becauserespected
sourcescontinually emphasizethe apparentlytrite messagethat 'peopleare the
key' (to success).But prescription and exhortation rarely seem to have been
influential in the past with British managers(witnessthe subjectof training). In
addition therefore,one has to look also to the kind of context which seemingly
generatesa more receptiveclimate for ideas which spell a changein direction.
A classicexampleis the caseof British Airways which, in the early 1980s,faced
a dire situationand wherethe strategy chosen to achievecompetitiveness- namely
an enhancedform of customer-care- clearly dependedcritically upon the
behaviourof employeesat many points acrossthe operation.
The dramatic turnaroundof BA (though by no meanssolely attributableto
its training programme)and the publicity given to similar cases,addedanother
ingredientto the climate of change: ahighly visible group of 'role-models'.Of
greater importance,however, has probably beenthe infiltration of theseideas
into the not inconsiderablenetwork of personalcontactsat senior echelonsof
corporateBritain. 'Significant others' were beginning to treat the people ques-
tion as crucial. But in what way?
A key tendencyappearsto be the increasedemphasisthat is being placedupon
'individual' as opposedto 'collective' relations.Accordingly, thereis the recent
upsurgeof interest in direct forms of communicationand involvement - often
taking the form of team briefings, quality circles and the like. Commensurate
with this are the developmentsin integratedreward systems,and the linking of
remunerationto performance.The renewedinterest in harmonizationcan also
be seenas a logical extensionof such initiatives. There is also some evidence

2
 Introduction

of new patternsof working - perhapsthe most notable theme here being the
attentiongiven to variousforms of flexibility. In a numberof organizationsthese
kinds of developmentare symbolizedby the changein terminologyfrom 'industrial
relations' to 'employeerelations' and from 'personnelmanagement'to 'human
resourcemanagement'.
This notion of 'human resourcemanagement'has becomevery topical. As
a set of interrelatedpracticeswith an ideologicaland philosophicalunderpinning,
it appearsto align closely with prevailing ideasof enterprise,and the freeing-up
of managerialinitiative. There is tremendousinterest in the phenomenonfrom
both practitionersand observersalike but, as yet, the literaturehasby no means
caughtup with the demandfor knowledge.Knowledge,that is, both in the sense
of 'facts' and informed analysis. Thereis a lacunain theoreticaland conceptual
discussion(for example,on the meaning,distinctivenessand significanceof HRM)
and hard empirical data(e.g. on the extentof its applicationacrossorganizations
and its pervasiveness and impact in thoseorganizationswhich professto practise
it). This book seeksto correct for the neglectof information on both fronts. It
brings togethersomeof the country'sforemost teachersand researcherson the
managementof personneland industrial relations. They bring to bear a variety
of disciplines(economics,sociologyand psychologyto namejust the most basic)
and a variety of perspectives(empirical, theoretical, practical and critical).
There is anotherdistinctive feature to this book: the contributionsherein are
all British. Previously, nearly all of the available material on the topic was
Americanand in consequence it was suchcorporationsas IBM, Hewlett Packard,
and GeneralMotors which loomedlarge in mostcase-studydiscussion.Moreover,
American perspectivesdiffer and the language,assumptions,and so much else
are at a sufficient distancefrom their British counterpartsthat it has been very
difficult to make sensibleinterpretationsof the relevanceof this literatureto the
British and Europeanemploymentscene.Thus, for example,the figure of one
Irving Bluestone,the United Auto Workers' Vice President,who cuts sucha dash
in many Americanaccountsof 'transformations'to labour relationsin the United
States,would seem to have no counterpartin Britain. Despite the diversity in
the stancestaken by the contributorsto this volume, none adoptsquite the same
kind of effusivenesswhich is often encounteredin American commentariesand
which strikes such a discordantnote in the British context. There are of course
certaininstanceswhere British literatureappearsto apethe prescriptiveAmerican
style (seefor example,Goldsmith and Clutterbuck 1984; Lessom 1986; Martin
and Nicholls 1987) but, in the main, academicsand practitionersalike tend to
remain sceptical. And rightly so, for, despite certainundoubtedsimilarities in
particularpractices,the British work context is very different and it is only sen-
sible to expectthat any 'take-up'of American-style/Japanese-style 'humanresource
management'will involve, at best, someconsiderableadaptation.It is the precise
nature of this which has so far failed adequatelyto beadequately
consi~ered.
The variouschaptersin this book examinethe phenomenonof humanresource
managementboth in toto and in its various parts. Given that the intention was

3
New perspectives on human resource management

to promotea searchinganalysisof the concept,it was inevitablethat certaincon-

trasts and disagreementswould emergebetweenthe contributors. This is to be
welcomed.The readerhasthe opportunityto engagewith, and to assess,the topic
at different levels ranging from the overview - as in Legge'schapter- to the
more specific, where the implications for practicein selection,appraisal,train-
ing and involvementare addressed.It would not be appropriatein this introduc-
tory chapterto attemptto 'resolve'aspectsof the ensuingdebate.The main strands
are, however, pulled togetherin the concluding chapter. But it may be helpful
here if a backcloth to the discussion,a framework and an overview of the con-
tributions were to be sketchedout. Thesethen will be the aims of the remainder
of this introduction.

The backcloth
Within the academicas opposedto the 'managerial'literature, there is - despite
an earlier period of caution - an increasingrecognition that somethingsignifi-
cant may be happeningin the managementof the employmentrelationship.The
landmarkand relatively sobercontributionby Kochan, Katz and McKersie (1986)
has chartedand interpretedthe changesin the United States,but as noted, there
has, as yet, been no British equivalent. Debateshave raged none the less about
'the new industrial relations' and about a possible shift from the management
of collective relations to the managementof human resources.
For some readers,of course,the term 'human resourcemanagement'can be
expectedto carry no particular connotationor convey any particular distinctive
meaningwhenplacedalongsidesuchtermsas 'personnelmanagement','employee
relations' or indeed simply 'the managementof people'. Yet, to an astonishing
degreefor an increasingnumberof managersand studentsof management,the
term 'humanresourcemanagement'- usually somewhatgrandiloquentlyabbrevi-
atedinto the capitalized'HRM' - hasrecentlycometo takeon a quite extraordinary
significance.Whetherto be applaudedor derided,the concepthascometo repre-
sentoneof the mostcontroversialsignifiers in managerialdebatein the 1980s.So
much so indeedthat, for example,eventhe housejournal of the Instituteof Personnel
Managementexperienceda period of disputeover the proposalto changeits title
from 'PersonnelManagement'to 'Human ResourceManagement'.The journal
now carries, as a compromisesolution, the subtitle 'The Magazinefor Human
ResourceProfessionals'.The IPM hasalso sponsoreda Chair at StrathclydeUniver-
sity, notably not in personnelmanagementbut in human resourcemanagement.
The term itself is in fact not new: one can find examplesof its use nearly 40
yearsago, especiallyin North America. But for many yearsthe term carried no
special significanceand it tendedto be used more or less interchangeablywith
a whole host of alternativeformulations to signal what most would understand
as personnelmanagement.In the 1980sit has, however,cometo denotea radically
different philosophy and approach to the managementof people at work -
applicablealike to manualworkers, staff and managerialgrades.In its reworked

4
 Introduction

usageit often purportsto signal the interweavingof a numberof elementswhich,

in sum, demarcate it sharply from personnel managementas commonly
understood.
Arguably even20 or 30 yearsago, commentatorsusing this term were wanting
to signal the possibility of a more 'sophisticated'alternativeapproachto labour
management.Hence what is different about the 1980s is not so much that the
messageitself has changedbut that it is being received more seriously.
Personnelmanagementhas long been dogged by problems of credibility,
marginality, ambiguity and a 'trash-can'labelling which has relegatedit to a
relatively disconnectedset of duties - many of them tainted with a low-status
'welfare' connotation.The classic analysisof such power and credibility issues
is to be found in Legge (1978) and she updatesher analysisin Chapter2 of this
book. She raises the key question concerning whether HRM and personnel
managementare in fact so different after all when both are comparedat the
normative (i.e. 'this is how the practice should be') level.
For a brief interlude,a new era for personnelspecialistsseemedto havearrived
in the 1970swhen trade-unionpower had to be accommodatedand a new body
of employmentlegislation had to be absorbed.In the 1980s,however,employers
havetakena relatively more relaxedattitude to both of theseforces and personnel
managementhasaccordinglybeenre-exposedto traditional uncertainties.Purcell
(1985), for example, raiseddoubtsabout the future survival of personnelat the
corporatelevel. (He, in fact, recordsa major reappraisalof his thinking on this
issue in Chapter 5 of this book.)
At this juncture, HRM might appearto offer timely salvation to a specialism
which hasbeendiagnosedas highly vulnerable.To useTyson'sterminology, the
'contractsmanager'- the collective bargainingexpertwhoseskills were so valued
in the 1970s - has come to seem a threatenedspeciesin the 1980s. The IPM
is trying to reorientatethe professionso that its membersbecomeidentified not
so much with trade-union relations and with 'over-bureaucraticdepartments
isolatedfrom the main priorities of the business'but insteadthey becomeassociated
with 'positive images' such as imaginative pay schemes, profit-sharing
arrangements,flexibility and training, and managementdevelopment.To a large
extent, the IPM will be pushing against anopen door with this campaign,for
it is remarkableto encounterso many senior personnelpractitionerstoday who
professto have 'always believed' that personnelwork was really about training
and developmentand the like. HRM now seemsto promisea board-levelor at
the very least a senior-executive-Ievelpresencefor the people-management
specialist (M. Armstrong 1987; Miller 1987). But there still seems to be
considerableuncertaintyas to whetherHRM representsa threator an opportunity
to personnelmanagement(for example,see Torrington and Hall 1987). There
remainscontentionaboutthe extentto which personnelspecialistsare in control
of, or can even influence the courseof the phenomenon(Storey 1987aand b).
Each of these themes will be found to figure prominently in the ensuing
chapters.

5
New perspectives on human resource management

Conceptsand frameworks
In~spiteflurryof the flurry
of activity notedabove,the conceptat the centreof it remains
problematical.In stereotypedform it appearscapableof making good each of
the main shortcomingsof personnelmanagement.Thus, far from being margin-
alized, the humanresourcemanagementfunction becomesrecognizedas a central
businessconcern;its performanceand delivery are integratedinto line manage-
ment; the aim shifts from merely securingcomplianceto the more ambitiousone
of winning commitment. The employee resource,therefore, becomesworth
investing in, and training and developmentthus assumea higher profile. These
initiatives are associatedwith, and maybeare evenpredicatedupon, a tendency
to shift from a collective orientationto the managementof the workforce to an
individualistic one. Accordingly, managementlooks for 'flexibility' and seeks
to reward differential performancein a differential way. Communicationof
managerialobjectivesand aspirationstakeson a whole new importance;it is not
undertakenbecausethe EEC, the government,the trade unions, or even a sec-
tion of the workforce want it to be done, or becauseit soundslike a laudable
and 'fair' thing to do, but becauseit is regardedas necessaryif the workforce
is to be effectively utilized. When trying to communicate,for example,managers
are increasinglyunwilling to submit to the erstwhile conventionof transmitting
messagesvia the trade unions. In sum, througha rangeof suchmutuallyreinfor-
cing initiatives, managementmay, it is thought, be able to effect a step-change
in its dealings with employees.
The attribute of HRM which perhapsexcitesthe most intenseinterestis that
which allegedlylocatesHRM policy formulation firmly at the strategiclevel (Beer
et al. 1985). But this raisesthe questionas to whetherthe strategiclink is a sine
qua non of HRM. There has been considerablediscussionof the conceptof
'strategichumanresourcemanagement'(e.g. Fombrun,Tichy, and Devanna1984;
Hendry and Pettigrew 1986; Foulkes 1986). By implication this would seemingly
allow for the possibility of operationalHRM at a more routine level. Sucha usage
would also meanthat the viability of HRM is not totally dependenton the 'strategic'
link and attempts to define HRM in terms of the strategic connectionwould
likewise be invalidated.It would follow thereforethat thereare variantsofHRM.
Interpretationsof either type tend, however, to insist that a characteristicof
HRM lies in its internally coherentapproach.That is, thereis a suggestedalign-
ment between each of the main 'people-management'interventions. This is
classicallyexpressedby Devanna,Fombrun,and Tichy (1984: 41) as illustrated
in Figure 1.1.
Empirical research(Storey 1987; and forthcoming), doesindeedreveala con-
siderabledegreeof revitalized attention in many of Britain's major companies
to eachof thesefour key constituentelementsof selection,appraisal,rewards,
and development.Hence, the increasein experimentationwith psychological
testing for managers,staff and manual workers (e.g. at Austin Rover, Jaguar
and Peugeot)is some indication of how selectionproceduresare being tackled

6
 Introduction

Rewards

Selection Performance Appraisal

Development

Figure 1.1 The human resourcemanagementcycle

more seriously. In the areaof rewards,there is heightenedinterestin installing

performance-linkedpay (as, for example, for NHS managers andmanagersin
the major clearingbanks).Appraisalsystemsarebeing dusteddown (in the wake
of a flurry of activity built around the conceptof 'competencies'following the
American work by Boyatzis (1982) and others. Hence, many big companiesin
Britain such as Shell, National WestminsterBank, BP and Whitbread are now
moving with alacrity towardsdelineatingmanagerial'competencies'and key skills.
Perhapsmost controversially,the whole area of training and developmenthas
been bathedin limelight. A host of reports have cataloguedthe lack of serious
attentionto training in this country (see,for example,Coopersand Lybrand 1985;
NEDO/MSC 1984) and a host more have madethe samepoint about manage-
ment education, training and development(Constableand McCormick 1987;
Handy 1987). Certain companiesseemon the face of it to be attendingto this
area with renewedvigour and commitment. Thus one could instanceJaguar's
open learning programme;the investmentmade in training by Lucas (NEDO
1987); the well-publicizedcaseof British Airways, and the less-publicizedcase
of British Steel. A climateof official blessingfor this kind of activity is generated
by the work of the Training Commission.What may be significant, however,
is that while reportslamentingthe under-provisionof training in this country are
not new (see, for example,NEDO 1965), the headof steambuilt up aroundthe
ManagementCharterGroup Initiative - despitecertaininternal conflicts - suggests
that the climate of receptivity may be very different. It would of course be
prematureto speculateabout the future of this specific initiative.
Facedwith such a catalogueof developments,someobserversare persuaded
of the ideaof a sea-change while othersremaindeeply sceptical.At bottom there

7
New perspectives on human resource management

are two arenasfor debate;one is empirical, the other conceptual.On the first
it has to be said that, remarkableas it may seem,and despitea numberof major
surveysthat touch on cognatematters (Edwards 1987; Marginson et al. 1988;
Batstone 1984; Millward and Stevens1986; or, for a synopsisof the surveys,
see Legge 1988), there is, quite simply, a marked insufficiency of systematic
evidence about the nature and extent of change in the practices which give
expressionto the central conceptsof HRM. This issueis examinedmore closely
in the final chapter.
On the secondareafor debate,the conceptual,it is also evidentthat interpre-
tations of found changesvary becauseof the elasticity in the meaningof the term
'human resourcemanagement'.Clearly, it can be used in a restrictedsenseso
reservingit as a label only for that approachto labour managementwhich treats
labour as a valuedassetratherthan a variablecostand which accordinglycounsels
investmentin the labour resourcethrough training and developmentand through
measuresdesignedto attract and retain a committed workforce. Alternatively,
it is sometimesused in an extendedway so as to refer a whole array of recent
managerialinitiatives including measuresto increasethe flexible utilization of
the labour resourceandother measureswhich are largely directedat the individual
employee. But anotherdistinction can also be drawn. This directs attention to
the 'hard' and 'soft' versionsofHRM. The hard one emphasizesthe quantitative,
calculativeand business-strategic aspectsof managingthe headcountsresource
in as 'rational' a way as for any other economicfactor. By contrast,the 'soft'
version tracesits roots to the human-relationsschool; it emphasizescommunica-
tion, motivation, and leadership.
Thesetwo typesof distinctionsdo not correspond,but it is possibleto consider
the implications of different combinationsof them. For example, under the
restrictedand the soft versions, HRM is to be regardedas one type of strategy
chosenin preferenceto a range of others. The agendafor researchand debate
naturally turns to the questionof which employmentsectorsand which types of
organizationsopt for this sort of approach.With the extendedand hard versions,
however, the assumptiontends to be that this usageis so expansiveit becomes
simply a generic term to substitutefor labour managementin all of its forms.
But thinking about the issuein this way may lead us to miss an important point:
namely, what is significantabout 'humanresourcemanagement'- and the factor
that could explain the remarkablelevel of interestin it - is that it marksa departure
from a largely prevailingorthodoxy, it promisesan alternative(or more accurately
and significantly) a setof alternativesto what might be describedas the 'Donovan'
model. Hence, 20 years after the Royal Commission'sReport was published
(Donovan 1968) it is becoming clear that the fragile consensusbuilt around
formalization of proceduresand around juridification as a meansof handling
employmentrelationsand of propitiating labour, has come under severestrain.
In this sense,HRM is a near-equivalentin the labour sphere,of the currently
popularideaof 'the managementof change'.If this interpretationhasany validity
it would remain the casethat the meaningof the term is still much wider than the

8
 Introduction

'investment in a valued resource' version which some commentatorswill

undoubtedly wish to retain as their preferred version. But it does narrow the
conceptto somethingfar more distinctive than a simplecatch-allwhich hasusually
been thought to be the only alternative meaning to the narrow one.
What is crucial is that HRM in either of the two sensessketchedhere is to
be seenas an 'emergent'phenomenonand relatedly,therefore,it implies something
different from the proceduralizedapproachto handlinglabour. The classicdefini-
tions of industrial relations refer to it as 'the making and administeringof rules
which regulateemploymentrelationships'(Bain and Clegg 1974) and declarethe
focus of its study to be 'the institutions of job regulation' (Flanders 1965: 10);
but what is distinctive about HRM, in both the hard and soft versions, is that
it eschewsthe joint regulativeapproach- and even more so the craft regulative
approach.It is impatient of custom and practice, of the going rate, of parity,
mutuality, of rule-booksand proceduremanuals,of deferring to personneland
IR specialists.In their placethe various initiatives which might, for convenience
sake, be denotedas HRM, placeemphasison utilizing labour to its full capacity
or potential. HRM is thereforeabout(and the term is usedneutrally here)exploiting
the labour resourcemore fully. This may be by upgrading it through training
or by job redesignso that labour is deployedmore flexibly acrosstasks, it may
also mean,however,de-manningso that the remaininglabourtime is simply used
more intensively. Whetherlabelled as 'sophisticatedmanagerialism'or in some
other way, it has to be rememberedtherefore that, at its most basic, HRM
representsa set of managerialinitiatives. But this is only the beginning not the
end of the story, for there are many interestingquestionsrelating to the nature
and compositionof theseinitiatives, the circumstancesof their formulation, and
the drama of their attemptedimplementation.
Naturally, dependingupon the particular intereststo be defended,reactions
to eachapproachwill differ markedly. The TUC hasexpressedprofoundconcern
about the perceivedspreadof HRM not least becauseof its associationin the
United Stateswith non-unionism.Largely for this reasonNEDO hasjudiciously
opted for the term 'humanresourcedevelopment'(HRD). Meanwhile, for their
part, personnelprofessionalsmay take up Torrington'ssuggestionin this book
that they stakeout clearly the sort of distinctive contributionwhich they can make.
For Torrington this would be an expertisebasedon a melding of a rangeof earlier
approachesand dispensed(using a medicalanalogy)in the mannerof the general
practitioner. But if Armstrong in Chapter10 is correct, their chancesof success
in marking out a distinct contributionwill be slim so long as they remain in thrall
to the parameterslaid down by managementaccountants.
If HRM is seento cover both the hard and soft versions,one final question
remains and this relatesto the issue of 'integration'. As we have seen, this is
one of the most often-cited criteria of HRM. Despite the host of examplesof
take-upof appraisal,development,and the like, there is still almost no evidence
availableaboutthe extentto which organizationshavein fact managedto interlink
thesein a mutually supportiveway. (Though many organizationshave certainly

9
New perspectives on human resource management

embracedthe idea as a priority aspiration.)This is an issuethat shouldbe borne

in mind thereforewhen reading this book and related works. There is also the
questionof integrationwith wider corporatestrategy.Here the renewedrecogni-
tion of the potentially vital role played by the people-elementin delivering a
successfulbusinessstrategyis illustrated in the MSC/NEDO(1987) packageput
togetherby the consultantsPeatMarwick McLintock, entitled 'People:The Key
to Success'and subtitled 'StrategicPlanning, Performance,and People'. The
packageincludesa demonstrationvideo, an 'actionpack' and a pre-preparedmodel
'presentation'.Significantly this is all aimed not at personnelspecialistsbut at
the chief executive - indeed the slide presentationis actually headed 'Chief
Executive'sPresentationto the Board'. The contentsare broadly familiar; the
idea that competitive advantageis gained through people; that this therefore
requiresa competentand committedworkforce; and that the businessplan must
itself embracethe peopleaspects.The caseexamplesof 'good practice'furnished
in the accompanyingvideo makeclear that the preferredmodel is built centrally
around the upfront 'soft' dimensionsof HRM though, as is so often the case,
the 'hard' elementsare there in the background.
Such instancesof top policy-level prescription serveto raise in sharp form
the urgent issue of the theoretical coherenceof the model and a need to have
availablesoundand rigorousacademicresearch,analysis,and comment.Regret-
tably it has to be said that, so far, the academiccommunity has not responded
to the challenge. Remarkablethough it may seem, there is simply no serious
extendedtreatmentavailableon this potentially crucial setof developments.There
are of coursenumeroustextbookson personnelmanagementand a still-thriving
prescriptivestream.But, until now, it hasbeenvery hard to locatematerialwhich
attendsto these issuesin a searchingand critical fashion.

Chaptersin this volume: rationale and overview

In selectingthe rangeof topics and contributionsto be found in this book three
criteria were uppermost.First, the broad field of human resourcemanagement
had to be given a reasonablecoverage. Hence the contributions range from
conceptualand theoreticalanalysis,throughcorporatestrategicissues,tradeunions
and industrial relations, divisions within management,the relationshipbetween
HRM and managerialcontrol systems,and on to particular aspectsof HRM
practicefocusing especiallyon training, selection,appraisal,and involvement.
Second, in addition to an extensivecoveragewe also looked for depth of
analysis. All of the contributorsare experiencedresearcherswhose past work
has demonstrateda rigour and substancewhich escI1ewssuperficial 'flavour of
the month' reportage.Thus the aim under this headingwas to ensurethat each
of the contributory themeswould be tackled with this kind of serious rigour.
Third, without imagining that it would be possibleto achievea precise'balance'
of perspectives, it was neverthelessintended to encouragea plurality of
approaches.There has been no attempt to find a 'party line' or to disguise

10
 Introduction

disagreement:it is from theseareasof uncertaintythat we expectto gain guidance

in identifying the issuesrequiring the most urgent attention by researchersand
policy-makers.
In Chapter2 Karen Leggeopensup the debatewith a closely-reasoned critique
of the ideas behind the term. She begins with a distinction betweennormative
and descriptivemeaningsof HRM. At the normativelevel shejudgesthat there
is, in fact, very little differencebetweenHRM and personnelmanagement;after
all it is not difficult to find idealized models of the supposedintegrative and
strategic nature of personnelwork and such books date back many years.
But it is interestingto note that while she says therearefew differences,she
neverthelessfinds thattherearesome.Threekey onesarediscussed.Theseare,first,
that HRM focuseson what is done to managerswhereaspersonnelimplies that
managersdo thingsto otheremployees.Secondly,HRM castsline managersin a far
moreproactiverole. They areto beheldaccountablefor theway in which they handle
labour - measurednow not by how punctilious they have beenin following the
personnelmanualbut in terms of utilization as measuredby bottom-line results.
Thirdly, HRM emphasizestop management's responsibilityfor 'managingculture'.
Having isolated these, Legge demonstrateshow each of them is beset by
contradictionsof an external and internal character.For example,the adoption
of businessportfolio management techniquesby multi-businesscompaniespresents
attendantproblemsof engenderinga coherentcorporateculture. Withdrawingfrom
certain marketsor even simply reducingexposurewithin them is likely to entail
a numberof humancasualtiesandtheseshesuggestsarenot likely to be rationaliz-
ed away with the notionswhich haveso far beencanvassed - suchasthat of 'tough
love'. As regardsinternal contradictions,thesecan be seen,for example,in the
clashbetweenindividualism andteamworking - both of which arecentralvalues
to HRM. Similarly, Leggedetectstensionsin trying to developcertain forms of
commitment- suchas commitmentto skill - when the organizationalso seeksto
persuadeemployeesto be flexible. Thoughperhapsa moreobvioustensionis bet-
ween commitmentand lack of job security.
A different approachis takenby David Guestin Chapter3. The analysisbegins
with the useful observationthat the natureof HRM can be derivedempirically or
conceptuallyandthateitherapproachcarriesthe risk of tautology. Theescapefrom
the dilemmais madeby developinginsteada setof testablepropositions.HereGuest
developsa modelwhich drawsconnectionsbetweenHRM aims,policies,andout-
comes. The basisof the idea is indicatedby Table 1.1.

Table 1.1 A human resourcemanagementframework

HRMaims HRM policies HRM outcomes

For example: For example: 'selectionwill be on For example:

*high commitment the basisof specific criteria *Iow labour turnover
*quality using sophisticatedtests' *allegianceto company
*f1exible working

11
New perspectives on human resource management

Turning to the implicationsof suchan approachfor tradeunionsand industrial

relations, Guestdistinguishesbetweenthe circumstancesof the greenfield sites
and the establishedplants. He observesthat HRM though unitaristand individualist
in characteris not necessarilyovertly anti-unionand he warns againstcontlating
non-unionismand HRM. It is also stressedthat HRM is only one of a rangeof
possible options available to management.
He suggeststhat there is an incompatibility betweenHRM and IR; in conse-
quence, if HRM policies are pursuedsomethinghas to give. At 'a significant
proportionof foreign-ownedgreenfieldsites managementis pursuingsomeof the
central featuresof HRM' (p. 50). In thesecasesthere tends, at best, to be only
a limited role for trade unions. For establishedplants, Guestturns to the major
surveysfor evidenceaboutthe extentof HRM-type initiatives. He finds a mixed
picture but on the whole draws the lessonthat HRM in thesesituationshas made
limited progress.Using the examplesof Tioxide and Norsk Hydro, however,he
draws the interim conclusionthat there are particular examplesof far-reaching
change. On the broader front, the evidence is noted which suggeststhat IR
institutions remain essentiallyintact; yet if HRM and IR are incompatiblehow can
thesefindings be explained?A numberof possibilitiesare advanced:the assumed
incompatibility could be incorrect; dual systemsmay operate;the extentof HRM
has been exaggeratedby head office management;or significant productivity
improvementcould have beenmadeas of late within the existing IR machinery.
Guest'spreferredexplanationis that while HRM has been in the ascendanton
greenfieldsitesandon certainother locations,in the majority of establishedplants,
attemptsto move towards HRM have not as yet made much impact.
But Guestconcludeson a distinctive note. He arguesthat the British economy
still lags behind its major competitorsand 'for further catching up to occur, it
seemslikely that a fuller useof humanresourceswill be necessary.This is likely
to require a shift in emphasisaway from the industrial relationssystemtowards
HRM policies as the main path to improved performance.In the absenceof a
radical shift in the relationshipbetweenunions and the employers,if this shift
occurs it is likely to do so at the expenseof the trade unions' (p. 55).
In Chapter4, Derek Torrington shifts the focus to the implications of HRM
for personnel management.In this chapter also, another new perspectiveis
adopted.He views HRM as potentially a threatto personnelmanagement;indeed,
the chapteris in many respectsa spirited defenceof the distinctive contribution
and value of personnelmanagementas a specialism.At the sametime, he also
wants to claim that in any caseHRM is but the latest 'addition' which takes its
place in a long line of similar innovationsand new beginningswhich personnel
managementhas successfullyabsorbed.
This chapteris thus useful in locating the emergenceof HRM in a broader
historical perspectiveby tracing earlier realignmentsand readjustmentsin the
evolution of personnel.Six characterizationsof successivemodelscapturingthe
essenceof what personnelwas primarily thought to be at different periods are

12
 Introduction

reviewed,ranging, for example,from the 'social reformer' role through 'welfare'

to the 'computer-assistedmanpower analyst'. The contemporarymodel is a
complex blend containing elementsof each.
In this chapterTorrington updateshis earlier work and significantly, he argues
'it would be unrealistic' to suggestthat the findings from his mid 1980ssurvey
would be replicatedtoday. HRM at that time was 'not liked' by personnelmanagers
whereasnow he judges, HRM has been 'assimilated'(p. 61).
Torringtondrawson a medicalanalogyto illustrate the natureof this new role.
He seesthe modern personnelmanageras like a generalpractitioner respected
for possessinga 'rich combinationof expertise',a professionalwho mediates
betweenthe patient and the consultantswhom he or she selectsand monitors.
Thus the personnelmanageris againcastas a person-in-the-middlebut now 'not
betweenmanagementand employeesbut betweenmanagersand the host of ex-
ternal resourcesnow available' (p. 66). Hence, for Torrington, HRM clearly
representsan important developmentbut it is not so much a revolution more a
'further embellishment'of a developing role.
In Chapter 5, John Purcell analysesthe way in which different corporate
strategiesand structuresinfluencethe shapeof humanresourcemanagementprac-
tices. His focus is on the large multi-divisional companieswhich on many measures
dominatethe economicand employmentscenein the advancedeconomies.Indeed,
this chaptermakesa valuablecontributionto this book by profiling the corporate
compositionof British industry and employment.
His analysisof corporatestrategyis built on the distinction between'upstream'
and 'downstream'types of strategicdecision. The chapterassessesthe way in
which developmentsin businesspolicy decisionmaking (i.e. upstreamdecisions)
impact upon human resourcemanagementstrategicdecisions.In the courseof
his review, Purcell takes us through portfolio planning theory and revealshow
its increasingusageimpels companiesto abandonadministrativecontrol systems
with their characteristicpersonnelmanualsin favour of control built on financial
performancetargets. In turn this shift encouragesdecentralizationin employee
relations. The varied circumstancesof the constituentbusinessesin the portfolio
have beenlinked to different requirementsin termsof types of businessmanager
and their associatedmodes of management.
Differentiation, and in particulardecentralization,is a key themeof this chapter.
But, following Goold and Campbell (1986), Purcell notes that not all multi-
divisional companiesare alike - thus the degreeof a head office involvement
in strategicbusinessunit activities, for example,can vary significantly. Hence,
a sharpcontrastis drawn betweenstrategic-planningcompanies(which do seek
to stampa corporatecharacteron their constituentbusinesses) and financial-control
companieswhich mainly do not. Periodsof financial stringency tend to impel
companiestowardsthe latter modeand City preferencesfurther reinforcethis drift.
In consequence,it is arguedthat businessunits in Britain are being driven
towardsshort-termism and thesetrendsare inimicable to the fostering of human
resourcemanagement'ideals' - by which Purcell meansthe narrower version

13
New perspectives on human resource management

of HRM entailing investment in resourceful humans. The implication of this

chapteris that, howeverpersuadedmany managersmay be by the logic, morality,
or good senseof HRM, there are structural tendenciesat play which will, for
the foreseeablefuture, constrainsuch aspirationsfrom being implemented- at
leastin thoselarge multi-divisional companieswhich opt for the financial-control
model.
Chapters6 to 8 shift focus and turn our attentionto someof the main constituent
elementsand techniqueswhich are normally seenas characterizingHRM. Thus
in Chapter6, BarbaraTownley examinesselectionand appraisal.She suggests
that what evidencethereis points towardsthe useof more systematicprocedures
in these areas.The chapteris largely concernedto interpret the meaning and
significanceof this. The central thrust is that thesemovesrepresentnot a mere
technical readjustmentreflecting the upgradingof personnelcapabilitiesbut are
part of the wider human resourcemanagementtrend. The aim of the more
sophisticatedselectionand appraisaltechniquesis to be able to shapeattitudinal
and behaviouralcharacteristics.The context is a shift from direct supervision
and technical control to production systemspredicatedon discretion and flexi-
bility; in such circumstancesalternative monitoring devices are required.
Developmentsin selectionindicate a greaterinterestin personalityprofiling
through the use of testing instruments;similarly, initial screeningmay utilize
personalhistory (or biodata)inventories.Indicesofloyalty and appropriateattitude
may be more important than technical competence.
Systematicappraisallikewise appearsto be spreadingout from the managerial
grades;henceone survey indicatesthat the proportion of organizationsusing it
for blue-collar workers increasedfrom 2 per cent to 24 per cent between1977
and 1985. Townley interpretsthe increaseduse of appraisalas associatedwith
a developingtendencyto aim to control by communicating'implicit expectations'.
The interesting point is made that what is sought is compliance though not
compliancewith bureaucraticrules but rather with the more 'nebulousconstruct
of norms'. In this regarduse is madeby Townley of Offe's framework of three
typesof norms - in particularwith the third of these,the 'extra functional norms'
which underpinauthority in the organization.But in the conclusionsomereser-
vationswith the model are expressed.Appraisalis seenas essentiallyan exercise
in personalpower. It elevatesthe role of the supervisorby emphasizingindividual-
ism and obscuring the social nature of work.
The selectionand appraisaltechniquesdiscussedin this chaptermay be seen
therefore as 'natural accompaniments'.They expressa trend towards control
through shaping normative orientations.Although thesedevelopmentsmay, to
a degree,reducethe amountof subjectivity on the part of selectorsand appraisers
by systemizingmanagerialpractice it is suggestedthat they court the dangerof
bestowingon theseproceduresthe statusof scientific objectivity and therefore
lend to them an undeservingmeasureof technical legitimacy.
Ewart Keep, in Chapter7, analysesanothermain pillar of human resource
management- indeed one which has sometimesbeen claimed as the vital

14
 Introduction

component:training. Keep usesthe notion of HRM to highlight the key idea of

investing in and developingan organization'shumanassets.Used in this sense,
training's place within HRM is, quite simply, central. The existenceof policies
and practicesdesignedto realizethe latent potentialof the workforce at all levels
becomesthe litmus test of an organization'sorientation. Using this test, Keep
casts a sceptical eye acrossthe British employmentscene.
At the macrolevel, he notesthe overwhelmingsurveyevidencewhich places
Britain at or near the bottom of the internationalleagueof training provision.
Yet a number of positive indicators are educed at the organizational level,
including, for example,a measureof changein companytraining strategies.Some
seniormanagersof leadingBritish companiesappearto havebeenconvincedof
the rationality of taking training seriously. The possibility of 'a step-change'is
further suggestedby the degreeto which training hasbeenintegratedwith wider
businessplanningand hasbeenfurther integratedwith selection,appraisal,quality
movements,and communicationprogrammes- i.e. the two types of integration
(vertical and horizontal) outlined above.
Keep argues,however, that such developmentshave occurredin only a few
exceptionalcasesin Britain. The main weight of his argumentis devotedto a
searchingand wide-ranginganalysisof the factors which inhibit the extensionof
HRM and training in this country. The problem areasare numerous.They find
expressionin statisticswhich indicate, for example,that while leadingemployers
in WestGermany,Japan,andthe USA spendup to 3 percentof turnoverper annum
on training, on averageemployersin Britain spendonly 0.15 per cent (p. 117).
Keepexposesa numberof 'barriers'which impedeprogressin the British context.
Managersin Britain, he observes,havethemselveshad comparativelylow levels
of formal educationandtraining. He suggeststhatasa consequence they arelikely,
in turn, to accorda low priority to the training andeducationoftheir subordinates.
It is even possible,he further contends,that such managersmay even regardan
educatedworkforce as a threat. One reasonfor this is that a more self-reliant
workforcewould be incompatiblewith traditionalstylesof management.At a more
fundamentallevel, Keep tracesa range of underlying structural factors which
militate againsttraining and humanresourcemanagementin this country. British
employershavefound it easierto follow other avenuessuchas overseasacquisi-
tions and investment,thesebeing deviceswherebyready-trainedworkforcescan
quite simply be bought in. At home, far too many organizationsstill pursuea
standardizedmassvolume/low skill product-marketstrategy- examplesare cited
from such sectorsas clothing, kitchen furniture, and retailing. The organization
of capital marketsin Britain and the takeover/divestment cycle hardly induceunit
managersto strive for long-term upgrading and commitment.
Hence, Keep concludesthat, while there is increasingevidenceat the level
of rhetoric of a growing enthusiasmfor humanresourcemanagement,the analysis
of the prospectsfor this one key elementof it revealsso many deep-seated barriers
to changethat he remainshighly pessimistic.Unfortunately, 'in a world where
internationalcompetitiveadvantageis increasinglylikely to turn upon the skills,

15
New perspectives on human resource management

knowledgeand commitmentof an enterprise'semployees',the economicconse-

quencesof this failure to invest in the human resourceare deemedto be dire.
There are echoeshere of Guest'sconclusion.
In Chapter8, Tom Schullerturns to the topic of employeeinvolvement. This
may be consideredas potentially an importantpath towardsthe key HRM concept
of 'commitment'.It is worthwhile thereforeto take a closerlook at the contem-
porary forms of involvement- forms which have distancedthemselvesfrom the
Bullock-style blueprints of the 1970s.
As Schullerobserves,a distinctive featureof contemporaryforms of employee
participation is the shift from collectivist to individualistic modes. Using these
as polar oppositesand focusing specifically upon financial participation,he draws
a continuumalong which a rangeof different possibilitiescan be located. Using
this, the main forms of financial participationare briefly reviewedbeforecloser
analysis is madeof two approaches- profit sharing and employeeinvolvement
in pensionfund management.On profit sharing,it is reportedthat while the search
for commitmenthas indeedbeenrevealedas one importantreasonfor introducing
it, this was neverthelesssecondaryto tax efficiency in rewardpackages.Moreover
such schemeswere normally introducedunilaterally, and there seemsto be little
evidencethat they are integratedwith other managerialinitiatives. Pension-fund
participationis likewise viewed as an outcomenot so much of HRM-style strategy
but as a result of threatenedlegislation. In the 1980sthe unexpectedgrowth of
the funds tendedto bring pension administrationcloser to corporatedecision-
making but membertrusteeinvolvementtendedstill to be peripheralto such key
issues.
Overall, despitethe apparentlyhigh level of interestin forms of involvement
(notably, from employersin the 1980s) the results of Schuller'sinvestigations
into financial involvement suggestthat its linkages with HRM are, in practice,
only tenuous.
Another aspectand anotherperspectiveon HRM are addedby Nicholas Kinnie
in Chapter9. Kinnie's distinctive contribution is to examinethe potential links
with new financial and production-controlsystems.In particularthis chaptersheds
light on the extent to which HRM may contribute to the effectivenessof
management-control systems,the basic link being the expandedrole and respon-
sibility of line managersfor the utilization of financial, material, informational,
and human resources.
The analysisis groundedon casestudy researchin four manufacturingplants.
Regardingfinancial control, the problemsof implementingdelegatedbudgetsand
profit-centredevicesare discussed.In relation to productioncontrol, innovations
suchasjust-in-time, and the useof computer-based material resourcesplanning,
are examined.The underlying featurecommonto both is the increasingrespon-
sibility and accountability of line managersand therefore the accompanying
increasein skill requirementson their Dart in a rangeof humanresourceaspects.
Kinnie notesthe lack of supportfrom HR departmentswhich was evident in
his casecompanies,but he also emphasizesthe potential importanceof HRM in

16
 Introduction

terms of training, reward and selection. He takes each of thesethree areasin

turn and gives instances.As with a numberof the othercontributorsto this book,
Kinnie notesthe limited take-upof HRM techniquesto date, but he tends to go
a step further by examiningjust how human resourcemanagementmight play
a part under the revised production systems. The precise reasonswhy these
opportunitieshave, in the main, not been taken up, are also explored.
In Chapter10, PeterArmstrongcontraststhe strategicaspirationssurrounding
HRM with the cold facts of its current subjugationto managementaccountancy.
Armstrongseesthe personnelprofessionas the group most likely to sponsorHRM
and sets out to examinethe extent to which personnelwill be able to progress
through the meansof such sponsorship.
Limits and possibilitiesare traced. Inthe first placethe currentstateof affairs
for personnelis viewed as giving far lessground for complacencythan a super-
ficial readingof much of the survey evidencewould suggest.On presenttrends,
he discernsa further removal of most personnelspecialistsfrom the centresof
important decision-making.Moreover, he interpretsthe marginalizationof the
professionas occurringnot becauseof 'recession'but becausethe key functions
in which personnelcould lay claim to have some expertisehave already been
capturedby managementaccountants.
Personnelspecialists,while they may be temptedto draw upon HRM as a
means of hoisting themselves into areas of key strategic decision-making,
will have to recognizethat in so doing they will inevitably be competingwith
other managerial professions.Thus HRM as a phenomenonwill not simply
be judged 'on its merits' by a notionally undifferentiated group known as
management.It is argued that no matter how successfully accomplished,
acquiescenceto simply meetingthe demandsfor 'data' from accountantsoffers
no satisfactoryway forward for personnelas a specialism.Nor will the rationale
for personnel, deriving from a claimed people-expertise,cut much ice if,
as seemslikely, it entails simply operating within the 'given' framework of
budgeting, planning, and control.
The potentialitieslie in personneldevelopingsufficient awareness,expertise
and confidenceto be able to mount a reasonablecritique of the shortcomingsof
managementaccountingitself. There are parallelshere with the work of Ewart
Keep and his analysis of the structural limits to the spreadof HRM.
Any managerialgroup seeking to champion HRM which wanted to make
progresswould first haveto cometo terms with 'the enduringfact of accounting
controls' and secondly have the wherewithal to appreciateand exploit their
problematicalaspects.On the face of it, some progresson both of thesecould
at least be commenced,for example, by leading practitioners familiarizing
themselveswith the kind of contributionsto be found in such learnedjournals
as Accounting,Organizationsand Society.But Armstrongis, in the final analysis,
doubtful of much change;he finds 'little awarenessthat today'spersonnelfunc-
tion operateswithin a managerialculture which is increasinglydominatedby the
languageand structuresof managementaccounting' (p. 166). It is this which,

17
New perspectives on human resource management

perhapsmost of all, placesthe most insurmountablebarrier to the extensiveand

successfulimplementationof HRM.
In the final chapterentitled 'Looking to the future', Sissonand Storey tackle
four tasks. They pull the main strandstogether; they take an overview of the
evidenceand the argumentsby constructinga 'balancesheet'for and againstthe
proposition that HRM has made a significant impact on employmentpractices;
thirdly, they assesssomeof the main implications for practitioners;and fourthly,
they identify what they see as the most pressingfuture researchneeds.

18
References

Table of Contents

Index 154 167 184 199

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