CHAPTER3

What is human resource

management?

HRM ... It's a posh way of describing a personnel manager ... but it goes a bit
farther than that.
(A caller to BBC Radio 4's Call Nick Ross phone-in
(15 October 1991) describing his occupation)

Introduction

In the last ten years, in both the UK and USA, the vocabulary for managing the
employment relationship has undergone a change. 'Personnel management'
has increasingly given way to 'human resource management' (HRM) or, better
still to 'strategic human resource management'. Nor is this shift exclusively
confined to those followers of fashion, the commercial management
consultants. It may be charted first in the writings of US academics and
managers (for example, Tichy et al., 1982; Fombrun et al., 1984; Beer et al., 1985;
Walton and Lawrence, 1985; Foulkes, 1986). Quickly, however, the term was
taken up by both UK managers (for example, Armstrong, 1987; Fowler, 1987)
and UK academics (for example, Hendry and Pettigrew, 1986; Guest, 1987;
Miller, 1987; Storey, 1987; Torrington and Hall, 1987). By the end of the 1980s
and the beginning of the 1990s the floodgates were open. Although both the
WIRS 3 survey of 1990 and the second Warwick Company Level survey of
1992 reported that only a small minority of personnel specialists have 'human
resource' in their titles (Millward et al., 1991, p. 29; Marginson et al., 1993, Table
4.1) this was not evident from the media. Not only were job advertisements in
the professional magazines and in the appointments pages of the quality press
as likely to ask for a 'Human Resource', as a 'Personnel' manager, but

62

K. Legge, Human Resource Management

© Karen Legge 1995
 What is human resource management? 63

erstwhile 'personnel management' courses were being retitled and the content
refocused, 'new' courses in HRM were being set up (see, for example, the
Open University's 'Human Resource Strategies' MBA module), guided by the
incumbents of newly established professorships in HRM, and a large
literature emerged exploring both the theoretical debates and empirical
manifestations that are associated with this term (see, for example, Storey,
1989, 1992a, 1992b; Guest, 1987, 1989a, 1989b, 1990b, 1991; Hendry et al., 1988,
1989; Hendry and Pettigrew, 1990; Keenoy, 1990a, 1990b, and Blyton and
Turnbull, 1992). Reflecting and reinforcing this interest in HRM is the
emergence, in 1990, of two new academic journals, entitled, respectively
Human Resource Management Journal and International Journal of Human Resource
Management, eclipsing the long-established specialist journal, Personnel Review.
Of course, this is hardly the first time that the language of management has
changed: the shift over the years away from traditional unionised manufac-
turing industries towards process industry, high-tech manufacturing and the
service sectors, with accompanying changes in occupational and employment
structures and union density had already been mirrored in managers'
increasing tendency to refer to 'employee' rather than 'industrial' -let alone
'labour' - relations, well before the perceived slackening in trade union
pressure in the politico-economic environment of the 1980s. But whereas that
shift reflected some changes in the practice of management (for example,
moves towards staff status in process industries) can the same be said of this
latest shift in vocabulary? Is HRM different in substance or emphasis from
personnel management? If so, in what ways and what might such a shift
signify?
In this chapter, answers are sought to three questions implied in its title:
• What is HRM?
• Is it any different from personnel management?
• Why did it emerge in the 1980s?

What is human resource management?

In discussing personnel management in Chapter 1, four different models were

identified: the normative, the descriptive-functional, the critical-evaluative,
and the descriptive-behavioural. In theory it should be possible to identify the
same range of models with reference to HRM. And, in practice, it is. In
subsequent chapters I will attempt to develop a descriptive-behavioural
model of HRM, in considering the gap between the normative models and
company practice, as it is being revealed by recently published and on-going
research studies. At this point, though, I will concentrate on the other three -
in particular on the normative and critical-evaluative models of HRM.
64 Human Resource Management

Normative models 1

As in Chapter 1, let us start with some quotations about what HRM is

supposed to be, drawn from both US and UK sources.
First, some US definitions
Fombrun, Tichy and Devanna (1984)
just as firms will be faced with inefficiencies when they try to implement new
strategies with outmoded structures, so they will also face problems of implementa-
tion when they attempt to effect new strategies with inappropriate HR systems. The
critical management task is to align the formal structure and the HR systems
[selection, appraisal, rewards and development] so that they can drive the strategic
objectives of the organization.

Beer and Spector (1985)

We have come to believe that the transformation we are observing amounts to more
than a subtle shift in the traditional practices of personnel or the substitution of new
terms for unchanging practices. Instead the transformation amounts to a new model
regarding the management of human resources in organizations. Although the
model is still emerging, and inconsistencies in its practice are often seen, we believe
that a set of basic assumptions can be identified that underlie the policies that we
have observed to be part of the HRM transformation. The new assumptions are:
• proactive, system-wide interventions, with emphasis on fit, linking HRM with
strategic planning and cultural change (c.f. old assumption: reactive, piecemeal
interventions in response to specific problems).
• people are social capital capable of development (c.f. people as variable cost).
• coincidence of interest between stakeholders can be developed (c.f, self-
interest dominates, conflict between stakeholders).
• seeks power equalization for trust and collaboration (c.f. seeks power
advantages for bargaining and confrontation).
• open channels of communication to build trust, commitment (c.f. control of
information flow to enhance efficiency, power).
• goal orientation (c.f. relationship orientation).
• participation and informed choice (c.f. control from top).

Walton (1985)
The new HRM model is composed of policies that promote mutuality - mutual
goals, mutual influence, mutual respect, mutual rewards, mutual responsibility. The
theory is that policies of mutuality will elicit commitment which in tum will yield
both better economic performance and greater human development.

Foulkes (1986)
Effective human resources management does not exist in a vacuum but must be
related to the overall strategy of the organisation... Too many personnel managers
have a tendency to create and function in their own little worlds, forgetting that their
primary value is helping to realize top and line management goals.
 What is human resource management? 65

The British definitions again may be contrasted with the American: 2

Hendry and Pettigrew (1986)

What, from a review of the existing literature does 'strategic HRM' appear to mean?

We start out by noting that there are two themes which overlap one another: the first
contained in the term 'strategic', the second in the idea, or philosophy, of 'human
resources'. The latter suggest people are a valued resource, a critical investment in
an organisation's current performance and future growth. The term 'strategic' ... in
this context has both established and new connotations [these are]

1. the use of planning;

2. a coherent approach to the design and management of personnel systems based
on an employment policy and manpower strategy, and often underpinned by a
'philosophy';
3. matching HRM activities and policies to some explicit business strategy; and
4. seeing the people of the organisation as a 'strategic resource' for achieving
'competitive advantage'.

Guest (1987)
The main dimensions of HRM [involve] the goal of integration [i.e., if human
resources can be integrated into strategic plans, if human resource policies cohere, if
line managers have internalised the importance of human resources and this is
reflected in their behaviour and if employees identify with the company, then the
company's strategic plans are likely to be more successfully implemented], the goal
of employee commitment, the goal of flexibility I adaptability [i.e., organic structures,
functional flexibility], the goal of quality [i.e., quality of staff, performance, stan-
dards and public image].

Compare these normative models of HRM with what comes close to a

descriptive-functional definition, offered by Torrington and Hall (1987):

Torrington and Hall (1987)

Human resources management is directed mainly at management needs for human
resources (not necessarily employees) to be provided and deployed. There is greater
emphasis on planning, monitoring, and control, rather than on problem-solving and
mediation. It is totally identified with management interests, being a general
management activity and is relatively distant from the workforce as a whole.

Underpinning personnel management are the twin ideas that people have a right to
proper treatment as dignified human beings while at work, and that they are only
effective as employees when their job-related personal needs are met. Underpinning
human resources management is the idea that management of human resources is
much the same as any other aspect of management, and getting the deployment of
right numbers and skills at the right place is more important than interfering with
people's personal affairs.
66 Human Resource Management

In the majority of these normative definitions several common themes stand

out: that human resources policies should be integrated with strategic
business planning and used to reinforce an appropriate (or change an
inappropriate) organisational culture, that human resources are valuable and
a source of competitive advantage, that they may be tapped most effectively
by mutually consistent policies that promote commitment and which, as a
consequence, foster a willingness in employees to act flexibly in the interests
of the 'adaptive organisation's pursuit of excellence'.

The 'hard' and 'soft' versions

However on closer examination of these definitions, two different emphases -

not necessarily incompatible- can be identified as to what HRM should be. At
the risk of some stereotyping and oversimplification, these have been termed
the 'hard' model, reflecting a 'utilitarian instrumentalism', and a 'soft' model,
more reminiscent of 'developmental humanism' (Storey, 1987; Hendry and
Pettigrew, 1990). The 'hard' model stresses HRM's focus on the crucial
importance of the close integration of human resources policies, systems and
activities with business strategy, on such HR systems being used 'to drive the
strategic objectives of the organisation' as Fombrun et al. (1984, p. 37) put it.
This requires- as the Hendry and Pettigrew (1986) definition makes clear-
that personnel policies, systems and practices are not only logically consistent
with and supportive of business objectives, but achieve this effect by their own
coherence. From this perspective the human resource, the object of formal
manpower planning, can be just that, largely a factor of production, along
with land and capital and an 'expense of doing business', rather than 'the only
resource capable of turning inanimate factors of production into wealth'
(Tyson and Fell, 1986, p. 135). This perception of 'resource' appears to
underline Torrington and Hall's descriptive-functional model of HRM, with
its reference to appropriate factors of production ('numbers' and 'skills') at the
'right' (implicitly the 'lowest possible') price. In their model, too, the human
resources appear passive ('to be provided and deployed') rather than (to quote
Tyson and Fell) 'the source of creative energy in any direction the organisation
dictates and fosters'. In essence, then, the 'hard' model emphasises the
'quantitative, calculative, and business strategic aspects of managing the
headcount resource in as "rational" a way as for any other economic factor'
(Storey, 1987, p. 6). Its focus is ultimately human resource management.
In contrast, the 'soft' 'developmental humanism' model, while still
emphasising the importance of integrating HR policies with business
objectives, sees this as involving treating employees as valued assets, a source
of competitive advantage through their commitment, adaptability and high
quality (of skills, performance and so on) (see the Guest, 1987, model).
 What is human resource management? 67

Employees are proactive rather than passive inputs into productive processes;
they are capable of 'development', worthy of 'trust' and 'collaboration', to be
achieved through 'participation and informed choice' (Beer and Spector,
1985). The stress is therefore on generating commitment via 'communication,
motivation and leadership' (Storey, 1987, p. 6). If employees' commitment will
yield 'better economic performance' it is also sought as a route to 'greater
human development' (Walton, 1985). In this model, then, the focus is on HR
policies to deliver 'resourceful' humans (Morris and Burgoyne, 1973), on
human resource management.
Clearly these rather different emphases are not necessarily incompatible.
Indeed most of the normative statements contain elements of both the 'hard'
and 'soft' models. Where an organisation pursues a strategy of producing high
value-added goods and services, in a knowledge-based industry, where it
adopts a policy of value-added growth rather than asset management (Capelli
and McKersie, 1987, pp. 443-4), treating (at least its core) employees as
resourceful humans to be developed by humanistic policies makes good
business sense. This is conveyed in the definitions of Hendry and Pettigrew
(1986) and of Beer and Spector (1985), Walton (1985) and by Guest (1987). But
what of the organisation that as part of its asset management chooses to
compete in a labour intensive, high volume, low cost industry, generating
profits through increasing market share by cost leadership? For such an
organisation the HR policies that may be most appropriate to 'driving
strategic objectives' are likely to involve treating employees as a variable input
and a cost to be minimised. This is a far cry from the employee relations
philosophy embodied in the models of Beer and Spector (1985), Walton (1985)
and Guest (1987).

Contradictions

This raises a major theme that will be developed in subsequent chapters. The
potential tensions in the normative models of HRM, expressed in this 'hard' I
'soft' dichotomy, are indicative of a range of contradictions implicit in these
models. A short introduction to these contradictions may be found in Legge
(1989a). Suffice to say at this point that these normative models of HRM are
problematic at two levels. First, at the surface level, there are the problems
stemming from ambiguities in the conceptual language of both the 'hard' and
'soft' models (see Keenoy, 1990b, pp. 9-10). The key concept in the 'hard'
model is that of 'integration'. But 'integration' appears to have two meanings:
integration or 'fit' with business strategy and the integration or complemen-
tarity and consistency of 'mutuality' employment policies aimed a generating
employee commitment, flexibility, quality, and the like. This double meaning
of integration has been referred to also as the 'external' and 'internal' fit of
68 Human Resource Management

STRONG
I
A distinctive approach to labour management
II
Strategic interventions Strategic interventions
designed to elicit designed to secure
commitment and to develop full utilisation of labour
resourceful humans resources
Integrated with
business strategy

SOFT HARD

Internal integration
I
Just another term
for 'personnel'
I
WEAK

Source: Storey (1992b, p. 27).

FIGURE 3.1 Storey's model of mapping the various meanings of HRM

HRM policies (Baird and Meshoulam, 1988). The problem is that while 'fit'
with strategy would argue a contingent design of HRM policy, internal
consistency - at least with the 'soft' human resource values associated with
'mutuality' - would argue an absolutist approach to the design of employment
policy. Can this contradiction be reconciled without stretching to the limit the
meaning of HRM as a distinct approach to managing HRM? Indeed, should
we focus on HRM as a 'special variant' of personnel management, reflecting a
particular discipline or ideology about how employees should be treated? Or
should we regard it as a variety of very different policies and practices
designed to achieve the desired employee contribution, judged solely 'against
criteria of coherence and appropriateness (a less rigid term than "fit")?' In
which case would we be treating HRM as a 'perspective on personnel
management, not personnel management itself'? (Hendry and Pettigrew,
1990, pp. 8-9; also Guest, 1989a). Such dilemmas and confusions that make it
difficult to 'pin down' the meaning of HRM are neatly expressed in Storey's
(1992b, p. 27) 'mapping' of the various meanings of HRM (see Figure 3.1) and
will be considered further below.
The problems inherent in this double meaning of 'integration' find echoes
in similar ambiguities - and resultant contradictions - in the conceptual
 What is human resource management? 69

scaffolding used to develop the 'soft' model of 'developmental humanism'.

'Flexibility', for example, can express values of employee upskilling,
development and initiative (as in the functional flexibility of core employees)
or the numerical and financial flexibility to be achieved by treating labour as a
variable cost-to-be-minimised input (Atkinson, 1984). Is the right 'quality' of
an organisation's workforce to be judged against absolutist standards or
relative to business strategy? What exactly is the employee to be committed
to? What too of the potential tensions between policies aimed at enhancing
these different values?
But, secondly, at a deeper level, it may be suggested that HRM, no less than
personnel management, is confronted by a contradiction of capitalism: that is,
responsibility for accommodating the dilemma that, although the 'labour
commodity' is a major means to further the interests of dominant groups in
capitalist society, it is liable to subvert those interests (Watson, 1977). Does
HRM have the potential to cope more effectively with this tension than
traditional approaches to personnel management? Implicit in this is an
assumption that rather than being a perspective on personnel management,
HRM is different to, and distinct from personnel management.
Before turning to consider the critical-evaluative models of HRM this
assumption needs to be tested and explored.

Is HRM different from personnel management?

Both managers and academics, particularly in the UK, have recognised the
problem of identifying clear differences between personnel management and
HRM. Fowler (1987, p. 3), for example, argues that substantively there is little
new in HRM:

What's new [personnel managers will ask] about the concept that 'the business of
personnel is the business' (to quote the theme of a Personnel Management essay
competition of yester-year). What is new about the view that employees give of their
best when they are treated as responsible adults? Haven't these been at the heart of
good personnel practice for decades? To which the answer is, of course, yes.

Such words are echoed by Armstrong's (1987, p. 32) comment that:

It could indeed be no more and no less than another name for personnel manage-
ment, but, as usually perceived, at least it has the virtue of emphasising the need to
treat people as a key resource, the management of which is the direct concern of top
management as part of the strategic planning processes of the enterprise. Although
there is nothing new in the idea, insufficient attention has been paid to it in many
organisations. The new bottle or label can help to overcome this deficiency.
70 Human Resource Management

Nor is Armstrong alone in suggesting a re-labelling process. Guest (1987, p.

506) points out that a number of personnel departments have become 'human
resource departments' without any obvious change in roles, just as the new
editions of several long-standing textbooks have changed title but little else.
Scepticism about there being little substantive difference between 'human
resource management' and traditional personnel management is further
reinforced by the practice, particularly in the US, of using 'human resource
management' as a generic term and one interchangeable with 'personnel
management'.
In order to identify possible differences between personnel management
and human resource management, we can take two approaches. First, we can
ask whether their normative models differ; secondly, whether their
descriptive-behavioural models - their respective practices - differ. As Guest
(1987, p. 507) suggests, we cannot really ask what human resource manage-
ment looks like in practice unless we have a model about what it should
constitute. Otherwise we run the danger of accepting as HRM any practices so
labelled, even if indistinguishable from what a few years ago we would have
termed 'personnel management'. In theory, once a normative model of HRM
is established and empirical research undertaken, several outcomes are
logically possible: the normative models of personnel management and HRM
might be similar but their practices (descriptive-behavioural models) differ;
their normative models might differ, but their practices be similar; both their
respective normative models and respective practices might be similar, or
both, respectively, might differ. It is in the final case that we might be most
confident that HRM and personnel management really are different
approaches to managing employees. Examining the normative models is
amenable to the conceptual analysis of published statements, but identifying
similarities or differences in the practice of personnel management and HRM
is a matter of empirical observation. Fortunately, we now have a range of
detailed case material that enables us to compare personnel and HRM
practice, and this will be considered in subsequent chapters. Let us start,
though, by comparing their respective normative models, as outlined in
Chapter 1 and in the preceding section above.

Similarities

First, a close comparison suggests that there are clear similarities between the
two.

1. Both models emphasise the importance of integrating personnel/HRM practices

with organisational goals. Particularly in the case of the American commentators,
it cannot even be said that the language has changed- Pigors and Myers (1969)
 What is human resource management? 71

speak of 'determining competitive advantage' and Megginson (1972) of 'orienting

to the total business environment'.
2. Both models vest personnel/HRM firmly in line management.
3. Both models, in the majority of instances, emphasise the importance of individuals
fully developing their abilities for their own personal satisfaction to make their
'best contribution' to organisational success. The similarity of the two models in
this respect is underlined when comparing Torrington and Hall's model of
personnel management with the other commentators' models of HRM. For their
conception of the ideas underlying personnel management 'that people have a right
to proper treatment as dignified human beings while at work, and they are only
effective as employees when their job-related personal needs are met' is identical
to the values underlying all the 'soft' version HRM models.
Furthermore, their statement elaborating this position, that speaks of the
desirability of 'mutuality' and 'reciprocal dependence' between employer and
employee in order for the employer to obtain 'commitment to organisational
objectives that is needed for organisational success' (Torrington and Hall, 1987,
p. 11) uses the same language as Walton's (1985, p. 36) HRM model: 'the new
management strategy involves policies that promote mutuality in order to elicit
commitment which in turn can generate increased economic effectiveness and
human development.'
4. Both models identify placing the 'right' people into the 'right' jobs as an important
means of integrating personnel/HRM practice with organisational goals, includ-
ing individual development. Glueck's (1974) and Cuming's (1975) statements
about personnel management's function in this respect are virtually identical to that
of Tichy et al. (1982, p. 51) that an 'essential process' of strategic human resource
management 'is one of matching available human resources to jobs in the
organisation'. The recognition that this matching process is nevertheless a
dynamic one, given the rate of environmental and organisational change, and
that employees really should be selected and developed in ways that enhance their
adaptability and flexibility, is common to both HRM models and to what might be
termed the 'deviant innovation' model of personnel management as embracing
OD value systems and practice (c.f. Guest, 1987, pp. 514-15; Legge, 1978, pp. 87-9).

So, is there any difference between the normative models of HRM and those
of personnel management? One is tempted to say 'not a lot'. And, indeed, the
sharp contrasts that Guest (1987) elicits in his comparison of what he terms
personnel management and human resource management 'stereotypes', in
spite of his disclaimers, appear to owe much to an implicit comparison of the
descriptive practice of personnel management with the normative aspirations of
HRM, rather than comparing like with like (see Figure 3.2). The same might be
said of Storey's (1992b) more recent comparison (see Figure 3.3). However,
both stark comparisons and assumptions of similarities should be treated with
caution. Even at the level of normative analysis - let alone empirical
observation - neither personnel management nor HRM is a singular model,
72 Human Resource Management

Human resource
Personnel management management

Time and planning perspective Short-term Long-term

reactive proactive
ad hoc strategic
marginal integrated
Psychological contract Compliance Commitment
Control systems External controls Self-control
Employee relations perspective Pluralist Unitarist
collective individual
low trust high trust
Preferred structures/systems Bureaucratic/mechanistic Organic
centralised devolved
formal defined roles flexible roles
Roles Specialist/professional Largely integrated into
line management
Evaluation criteria Cost-minimisation Maximum utilisation
(human asset
accounting)

Source: Guest (1987, p. 507).

FIGURE 3.2 Guest's stereotypes of personnel management and human
resource management

but each is conceptualised in a variety of guises. Perhaps the sharpest

contrasts may be found in comparing British personnel management models
with US HRM models, or paradoxically, the 'hard' and 'soft' versions of the
HRM model.
Furthermore, similarities are evident when we compare both the normative
and descriptive-functional models of HRM with those of the employee
relations style associated with the enactment of personnel management (see
Chapter 2). The 'soft' 'developmental humanism' model of HRM is
reminiscent not only of Fox's unitary frame of reference (with the emphasis
on compatibility of stakeholders' interests, shared vision and culture), but of
styles based on an individualistic, investment orientation to employees. There
seems little difference, for example, between the Beer and Guest 'soft' models
and sophisticated human relations. Each appear as a very similar variant of
personnel management.
Torrington and Hall's (1987) descriptive-functional model also has over-
tones of unitarism and individualism, but in a rather different sense. Referring
back to Purcell's (1987) continua, here unitarism is not about shared
 What is human resource management? 73

DIMENSION PERSONNEL AND IR HRM

Beliefs and assumptions

1 Contract Careful delineation of Aim to go 'beyond contract'
written contracts
2 Rules Importance of devising 'Can-do outlook;
clear rules/mutuality impatience with 'rule'
3 Guide to Procedures 'Business-need'
management action
4 Behaviour referent Norms/custom and Values/mission
practice
5 Managerial task Monitoring Nurturing
vis a vis labour
6 Nature of relations Pluralist Unitarist
7 Conflict Institutionalised De-emphasised

Strategic aspects
8 Key relations Labour-management Customer
9 Initiatives Piecemeal Integrated
10 Corporate plan Marginal to Central to
11 Speed of decision Slow Fast

Line management
12 Management role Transactional Transformational leadership
13 Key managers Personnei/IR specialists General/business/line
managers
14 Communication Indirect Direct
15 Standardisation High (e.g. 'parity' an issue) Low (e.g. 'parity' not seen as
relevant)
16 Prized management Negotiation Facilitation
skills
Key levers
17 Selection Separate, marginal task Integrated, key task
18 Pay Job evaluation (fixed grades) Performance-related
19 Conditions Separately negotiated Harmonisation
20 Labour-management Collective bargaining contracts Towards individual contracts
21 Thrust of relations Regularised through Marginalised (with exception
with stewards facilities and training of some bargaining for
change models)
22 Job categories and Many Few
grades
23 Communication Restrict flow Increased flow
24 Job design Division of labour Teamwork
25 Conflict handling Reach temporary truces Manage climate and culture
26 Training and Controlled access to courses Learning companies
development
27 Foci of attention for Personnel procedures Wide ranging cultural,
interventions structural and personnel
strategies

Source: Storey (1992b, p. 35).

FIGURE 3.3 Storey's dimensions of personnel/IR and HRM
74 Human Resource Management

vision but about management's denial of the legitimacy of collectivist

aspiration (and hence anticipating a potential challenge). Individualism
reflects a view of labour control, as commodity, rather than an investment
orientation.
In contrast, the 'hard' 'utilitarian-instrumentalism' model of HRM,
emphasising as it does the close integration of human resource policies,
systems and activities with business strategy, could resemble any of the
identified employee relations styles (except the opportunistic 'standard
modern') depending on the strategy chosen to achieve competitive advantage.
This contingent rather than absolutist modelling of HRM would present it as a
perspective on rather than a variant of personnel management. But in enacting
either 'soft' or 'hard' models of HRM, the role of management points to
Tyson's 'architect' model.

Differences

The differences between the normative models of personnel and human

resource management are more those of meaning and emphasis than
substance - but nonetheless 'real' for that.
1. First, many statements about personnel management when placed in the context
of the texts from which they are derived, seem to see it as a management activity
which is largely aimed at non-managers. Apart from management development
(often treated as a separate activity or function) personnel management appears to
be something performed on subordinates by managers rather than something that
the latter experience themselves - other than as a set of rules and procedures that
may constrain their freedom in managing their subordinates as they think fit.
HRM, on the other hand, not only emphasises the importance of employee
development, but focuses particularly on development of 'the management team'
(see, for example, the interviews with Bob Beck, Alan Lafley and Clifford J. Erlich
in Foulkes, 1986). This shift of emphasis appears related to two other differences.
2. The second is that while both personnel management and HRM highlight the role
of line management, the focus is different. In the personnel management models,
line's role is very much an expression of the view that all managers manage
people, so all managers in a sense carry out 'personnel management'. It also
carries the recognition that most specialist personnel work still has to be
implemented within line management's departments where the workforce is
physically located (see, for example, Legge, 1978, pp. 22-3). In the HRM models,
HRM is vested in line management as business managers responsible for
coordinating and directing all resources in the business unit in pursuit of bottom-
line results. Not only does the bottom-line appear to be specified more precisely
than in the personnel management models, with much emphasis on quality of
product or service (see for example, Storey, 1987, p. 16; Upton, 1987), but a clear
 What is human resource management? 75

relationship is drawn between the achievement of these results and the line's
appropriate and proactive use of the human resources in the business unit.
Personnel policies are not passively integrated with business strategy, in the sense
of flowing from it, but are an integral part of strategy in the sense that they
underlie and facilitate the pursuit of a desired strategy.
Storey's (1992b, Chapter 7) identification of line management moving away
from a reactive tactically orientated role as 'production manager' to the proactive,
but still technically oriented role as 'manufacturing manager', and finally to the
proactive and commercially oriented 'business manager' role is indicative of this
change.
3. The third difference is that most HRM models emphasise the management of the
organisation's culture as the central activity for senior management. Although the
OD models of the 1970s proclaimed a similar message, these were not fully
integrated with the run-of-the-mill normative personnel management models of
the 1970s. OD was always seen as standing slightly apart from 'mainstream'
personnel management and, in fact, was generally kept separate in a formal
institutional sense, with separate OD consultants, not always with a background
in, or located within the personnel department (see Pettigrew, 1985). Above all, it
was often presented as a fringe activity, an initiative that was 'nice to have' but
essentially the gilt on the gingerbread, to be dispensed with the first hint of
financial cutbacks (along with training!) (Keep, 1989). Peters and Waterman's
(1982) linking of 'strong cultures' with financial success (however spurious), along
with American management's fascination with the linkages between a stereotyped
'Japanese' employment culture and Japanese economic strength, has raised the
development and management of an appropriate culture as the strategic or
'transformational' leadership activity, that gives direction, a sense of purpose and
involvement to all organisational members (see the next section and Chapter 6). It
is through an integrated and internally consistent set of HR policies in relation to
recruitment, selection, training, development, rewarding and communications,
that the organisation's core values can best be conveyed, according to the
normative HRM models. Integration, therefore, is a doubly important issue - not
just integration of HRM policies with strategy, but the internal integration and
consistency of HRM policies themselves to enact a coherent 'strong' culture. The
normative personnel management models do not present personnel policies as
senior management's instrument for reinforcing or changing organisational values
in a manner consistent with preferred business strategy.

These three differences in emphasis all point to HRM, in theory, being

essentially a more central strategic management task than personnel manage-
ment in that it is experienced by managers, as the most valued company
resource to be managed, it concerns them in the achievement of business goals
and it expresses senior management's preferred organisational values. From
this perspective it is not surprising that Fowler (1987, p. 3) identifies the real
difference between HRM and personnel management as 'not what it is, but
76 Human Resource Management

who is saying it. In a nutshell HRM represents the discovery of personnel

management by chief executives'. If this is so what factors stimulated such a
belated discovery?

The emergence of HRM in the 1980s

The emergence of a rhetoric of HRM in the 1980s in the US and UK may be

seen as resultant of several changes, experienced in both countries, in both
product and labour markets, changes mediated by technological development
and a swing to right-wing political ideologies. Several buzz words signify
these changes: intensification of international competition, globalisation, the
Japanese Janus (threat/icon), cultures of excellence, information technology,
knowledge-working, high value added, the enterprise culture. The phrase that
encapsulates them all is 'the search for competitive advantage'. The effect of
these factors lies in their reinforcing interrelationships as much as in their
separate existence.

Market changes

The 1980s was marked by the increased globalisation of markets, and

intensification of competition (Sisson, 1989, 1990; Blyton and Turnbull, 1994,
Chapter 3). The rise of the Pacific economies- first Japan, then South Korea,
Taiwan, Singapore and so on, combining modem technology with (initially)
relatively cheap labour- has posed a massive challenge to European and US
economies. From a US point of view, the EU poses another; from a UK point of
view, our competitive position is challenged within the EU by the greater
effectiveness of German, French and, arguably, Italian economies. The shift
from 'command' to 'market' economies in Eastern Europe not only further
enlarges the international economy but, given relative labour costs, represents
another competitive threat (or marketing opportunity, given pent up
consumer demand).
This globalisation of markets, facilitated by an IT-induced speeding up of
world-wide communication, has gone hand in hand with the emergence of
multinational companies, operating on a world-wide basis. This has resulted
in an international division of labour, where regions specialise according to
their source of competitive advantage (cheap, low-skilled labour providing
low-cost assembly; well-educated, high-skilled knowledge workers providing
high value added goods and services; commodity producers) (Nolan and
O'Donnell, 1991). Not only is production located where it is most cost
 What is human resource management? 77

effective, but multiple-sourcing of products and services is used to encourage

internal competition to enhance effectiveness (Sisson, 1989, p. 28). Further-
more, production is organised for effective access to chosen markets - hence,
from a UK point of view, the patterns of inward investment to gain access to
EU markets (for example, Japanese investment in 'screwdriver' factories) and
the outward investment into continental Europe and the US, the latter assisted
by Conservative government policies of financial deregulation. (For a more
extended discussion of globalisation, see Chapter 9.)
Deregulation combined with instabilities in the global political order
(reduction of trade barriers; breakdown of international trade treaties such as
Bretton Woods, providing stable exchange rates; major politico-economic
shocks to commodity prices such as oil; recessions of 1973-4, 1979-81, 1989-93
ending the long post-war Keynesian period of stability and growth; the US/
Japanese trade imbalance culminating in the Stock Market crash of 1987) have
all increased the volatility of trading.
Focusing on the UK, this intensification of international competition has
forced many companies to become more strategically aware. As discussed in
Chapter 2, should they pursue a policy of 'asset management' or 'value
added'? (Capelli and McKersie, 1987). This has encouraged analysis of their
sources of competitive advantage. If we take manufacturing industry in the
UK, such an analysis confronts management with a series of dilemmas
surrounding investment policy and working practices. Manufacturing in the
UK was rooted in mature industries such as general engineering, steel and
glass production, shipbuilding, textiles, where competition is price sensitive. If
a firm chooses a 'value added' strategy, two main courses of action are open:
to increase efficiency and/ or to go up-market with higher quality, high design
input products that are less price sensitive. Both strategies, logically, require
investment in human and technical capacity, often involving new working
practices, if long-term repositioning is to be achieved. Here both the 'hard'
and 'soft' HRM models have a palatable message. The 'hard' model looks to
the integration of human resource policies with business strategy. Will cost
effectiveness best be achieved by relocating production to low cost areas and/
or with market access advantages (see, for example, the strategies of GKN, IMI
and Pilkington)? Or, if higher quality, greater customer responsiveness is
required, what about those 'soft' HRM policies that speak of generating
greater employee flexibility and commitment, necessary if integrated
manufacturing systems require multiskilling, TQM, JIT and so forth?
The HRM models speak equally to those organisations, often originally
based in manufacturing, that have preferred to adopt an 'asset management'
policy of closures, divestment and diversification in pursuit of profitable
investment. All evidence points to the UK increasingly becoming a relatively
low skill, low hourly labour costs, low productivity (and consequently, high
unit labour costs) economy, beset by a structural deficit arising from a
manufacturing base too small to support the consuming population (see
78 Human Resource Management

House of Lords, 1985; Legge, 1988; Coutts and Godley, 1989; Evans et al.,
1992). Thus, for many, given this weakness of the UK economy, a long-term
investment policy in British manufacturing industry has been judged an
ineffective use of assets due to the extent of the investment gap in new plant,
infrastructure, education and training as compared to continental European
and Pacific competitors which does not bode well for economic health (see
Streeck, 1985; Keep, 1989). Such views received reinforcement in both the early
1980s and in the early 1990s when government monetarist policies, involving
the lethal combination of high interest and exchange rates, have made
investment very expensive and profitability very uncertain. Diversification
away from manufacturing (e.g., BAT), closure of unprofitable plant (e.g., BTR)
and overseas investment (e.g., Hanson) have seemed a better route to
profitability. In such circumstances the 'hard' model of HRM preaches an
important message: tailor the management of its labour resource to the
business strategy of each constituent business unit - take a contingent rather
than absolutist approach to what HRM should involve for each business.
These product market changes are mirrored in labour market changes in the
UK and US (Sisson, 1990, pp. 2-3). The long-term shift in employment from
manufacturing to the service sector} exacerbated by the 1979--81 recession (for
a discussion, see Legge, 1988; Macinnes, 1987), and the greater technical
sophistication of much surviving manufacturing, has resulted in a decline in
manual jobs relative to non-manual jobs. This has had several knock-on
effects. First, the workforce has become increasingly polarised between those
undertaking jobs requiring the skills of 'knowledge workers', and conse-
quently high levels of education and training and those performing
routinised, low skill service jobs (check-out, shelf-filling, fast-food catering).
Secondly, the workforce is becoming feminised, as it has become the norm for
women to work with only a minimal break for child rearing and as service
sector jobs are available. 4 Thirdly, due to demographic trends, the workforce
will become increasingly 'middle-aged' in the 1990s. Again the unitaristic
message of the HRM models finds a less hostile environment than in the days
when the 'worker' was seen as predominantly young, male, manual working
in unionised manufacturing industry. Today, arguably, managers can see the
advantages of coopting rather than confronting 'core' knowledge workers,
aiming for commitment via cultural management and marginalization of
unions, rather than compliance through collective bargaining. Further, growth
in employment has occurred in a sector (private service) and among a
category of employees (women - and working part-time5 ) that traditionally
are not highly unionised (see Chapters 5 and 8).
Finally, a major labour market change since the late 1970s has been the
sharp rise in redundancies declared in Britain, peaking in the recessions in the
early 1980s and 1990s, and the high endemic levels of unemployment. 6 The
effect of unemployment and redundancy was put succinctly by Ron Todd
(then Chief Negotiator at Ford and later General Secretary of the TGWU) in
 What is human resource management? 79

1983, when he declared 'we've got three million on the dole, and another 23
million scared to death' (cited in Blyton and Turnbull, 1994, p. 52). While fears
of unemployment may have encouraged 'resigned behavioural compliance'
rather than the 'commitment' on the part of employees, advocated by 'soft'
model HRM (see Chapter 6) it certainly strengthened management's hand and
weakened union resistance to changes in work practices and personnel
policies aimed at enhancing flexibility, quality- and labour intensification (see
Chapters 5 and 7; also Metcalf, 1989; Guest, 1991a).

The Japanese 'Janus' and models of excellence

Janus, the Roman god of doorways, gates and openings, looks in opposite
directions, with a friendly and a hostile face. At the risk of stereotyping, this
image is not inappropriate to the UK's and US's reaction to Japan. On the one
hand, Japan's hostile face is recognised as an erstwhile war-time enemy, that
has now turned the tables on an overgenerous victor, using 'unfair' tactics in
economic combat. On the other hand, though, is a sneaking admiration and
envy: after the destruction of allied bombing and nuclear attack, how ever
could the Japanese have become the second most powerful world economy, in
the space of forty years? What lessons can we learn from the benign face of
economic success?
The 'lessons' learnt in the early 1980s, stemmed from influential publica-
tions- Ouchi's (1981) Theory Z, and Peters and Waterman's (1982) In Search of
Excellence- that claimed a similarity between company 'excellence' (defined
largely in terms of financial criteria) and the adoption of management
practices reminiscent of those of Japan. In the eyes of these influential texts
this boiled down to combining the 'hard' - tight controls on results - with the
'soft' - facilitating autonomy in definitions of priorities, decisions and actions
(Wood, 1989a, p. 383). The argument was that American management practice
had traditionally placed too much emphasis on a centrally imposed
rationality, expressed through excessive emphasis on the measurable,
involving the manipulation of complex structures to achieve compliance
and results. The Japanese, on the other hand, prioritised creating a shared
vision, a culture of collective commitment to achieving organisational goals,
often expressed in philosophical rather than in quantitative terms (for
example, 'quality', being the 'best', Komatsu's vision of 'encircling Cater-
pillar'). The Americans had neglected this 'transformational ' leadership, in
favour of a shorter-term 'harder' transactional style. But the comforting
message was that all was not lost. Where US companies had adopted
management practices that resembled those of the Japanese ('Theory Z', Peters
and Waterman's 'eight attributes') they had achieved financial success. The
80 Human Resource Management

lesson was clear: cultural management that secured the commitment of

employees as valued assets - hallmarks of the 'soft' HRM model - should be
the order of the day. Supported by the six 'pillars' of Japanese employment
practice (lifetime employment, company welfare, quality consciousness,
enterprise unions, consensus management and seniority-based reward
systems) - all suitably adapted to the local context, of course - this would
facilitate the adoption of other Japanese practices (Kanban UIT]; Kaizen
[continuous improvement]), that call for flexible utilization of resourceful
humans.
It should be noted that the underpinning of this equation of Japanese
management, including human resource management practices, with success
in US companies is shaky to say the least. First, the research design and
empirical basis of Peters and Waterman's research is highly suspect, raising
doubts as to the genuine excellence (even financial!) of the companies
identified, and the reliability of the eight attributes (for an excellent critique
see Guest, 1991b). Second, the typification of Japanese management practice
rests on crude stereotypes that neglect such important qualifications as
Japan's dualistic industrial structure and the extent to which traditional HRM
policies have ever been universally applied and, indeed, are in the process of
erosion in the light of demographic change, internationalisation, and
technological development (for a short summary see Thompson and McHugh,
1990, pp. 202-6; for longer accounts see Clark, 1979; Godet, 1987; Mroczkowski
and Hanaoka, 1989; Bartlett and Yoshihara, 1988; Whittaker, 1990; Okubaya-
shi, 1986). Nevertheless, the imagery of the Japanese Janus and the rhetoric
associated with models of excellence resonates with the messages contained in
the 'soft' HRM model.

The enterprise culture

If market changes, the Japanese Janus and models of excellence pointed both
to an intensification of competition and strategies for meeting it, at a macro
level, government ideology and resultant policies, in the UK and US, provided
just the right growing medium (or should I say, compost) for the ideas
contained in HRM models to flourish.
In both the UK and US in the 1980s, under Mrs Thatcher and President
Reagan, national government swung to the political right. Although their
respective economic policies differed (compare, for example, the monetarism
- later relaxed - of the early days of the first Thatcher government with the
runaway budget deficits of the Reagan years), at the level of ideology both
administrations preached the virtues of a 'rugged entrepreneurial individu-
alism' (Guest, 1990b, p. 31), of the central value of 'enterprise' to national
economic well being.
 What is human resource management? 81

Enterprise, though, as Keat (1991) and Fairclough (1991) point out, has a
dual meaning. It can convey the meaning of a noun - 'the commercial
enterprise' - as well as that of a verb - to be 'enterprising', by taking risks,
showing initiative, self-reliance and so on. In the UK, in the 1980s, government
attempted to equate these meanings in the politico-economic environment it
had sought to create.
The desirability of the model of the 'commercial enterprise' - that is, the
privately-owned firm operating in a free market economy - found expression
in policies aimed at extending the domain of the 'free market' and intensifying
competition therein. Such policies included a rejection of Keynesian demand
management economic policies, aimed at the maintenance of full employment
- 'the business of government is not the government of business' as one
finance minister declared - in favour of monetarist supply management,
aimed at squeezing inflation out of the economy, through the control of the
money supply (M3, PSBR). Levels of employment then find their own
'natural' level through the operation of the forces of supply and demand in the
market place. Firms' survival and growth depends on their 'leanness' and
'fitness' in dealing with the rigours of the marketplace, no longer
featherbedded by artificially protective fiscal measures. There has been an
end of exchange controls, a deregulation of financial services and the removal
of non-market restrictions governing the conduct of some professions. For
organisations formerly protected by public funding and ideologies at odds
with the market place (public good/need) there has been institutional reform
designed to introduce market principles and commercially modelled forms of
organisation. Hence, in the UK, the 1980s and 1990s saw the privatisation of
state-owned industries and public utilities and the introduction of quasi-
markets in the organisation of public services (for example, the 'opting-out' of
schools, 'trust' status and 'fund management', purchaser-provider relations in
the NHS, market-testing in the Civil Service, competitive tendering in local
authorities). Expressive of these changes has been the introduction of the
concept of 'consumer' into situations where the terminology of professional
dominance (c.f., 'student', 'patient', 'client') previously prevailed. Whether in
the service or manufacturing, public or private sectors 'meeting the demands
of the "sovereign consumer" [has become] the new and institutional
imperative' (Keat, 1991, p. 3).
Used as a verb, 'enterprising' has connotations of initiative, energy,
independence, boldness, self-reliance, and a willingness to take risks and to
accept responsibility for one's actions. In this sense an enterprise culture is one
in which the acquisition and exercise of these qualities is valued and
encouraged. In the UK such encouragement has taken the form of attempts to
neutralise and reverse the influence of institutions that are supposedly
inimical to the spirit of enterprise: the trade unions and the welfare state.
The trade unions have been considered doubly inhibiting. On the one hand
they are seen by protagonists of the enterprise culture as fettering the free will
82 Human Resource Management

of 'captive' individuals through imposing the shackles of collective bargaining

and by impeding the free working of market forces by such institutions as the
closed shop, restrictive practices and legal immunities. On the other hand,
they are regarded as protective of employees' collective interests in a way that
encourages the diminution of individual responsibility and aspiration,
creating a culture of dependency.
Such a view, in the early to mid-1980s, not only resulted in a rejection of
conventional incomes policies, and a general shift from direct to indirect
taxation, but an approach to employment legislation designed to weaken trade
union power and strengthen the employer's hand vis-a-vis employees in the
fight against inflation. Thus, the two Orders of July 1979 served to restrict
employment protection, particularly in relation to unfair dismissal. The
Employment Acts 1980 and 1982 largely dismantled the 'minimum condi-
tions' props to collective bargaining- the latter being completely side-stepped
by legislation imposing a pay settlement in the case of the teachers' pay
dispute in 1987. The Employment Acts 1980 and 1982, and the Trade Union
Act 1984 collectively chopped back union immunities in relation to industrial
action, with restrictive clauses, in particular, on picketing, secondary action,
action to extend recognition and negotiation, the definition of trade disputes,
dismissal of strikers and strike ballots. Similarly, the 1982 and 1984 Acts, by
imposing liability on unions in tort, undermined union strength and security.
The same effect was aimed for in the 1980 and 1982 Acts, by the attack on the
closed shop (or as the government saw it, freeing a 'conscript army' of
unionists). In the same spirit, the 1984 Act sought to 'democratise' internal
trade union affairs by compelling ballots in trade union elections and over the
continuance of the political levy. The Employment Act, 1988 placed further
restrictions on trade unions with respect to balloting before industrial action
and the election of officials and declared the post-entry closed shop
unenforceable. The Employment Act, 1990 made the pre-entry close shop
illegal and placed further constraints on industrial action. Finally, the Trade
Union Reform and Employment Rights Act 1993 strengthening balloting and
notification provisions with respect to industrial action, weakened the 'check-
off' system and abolished the majority of the wage councils. Little by little
unions' freedoms and immunities with respect to industrial action and civil
redress and the supports for recruitment and healthy finances have been
whittled away (see Chapter 8).
Gone was the image of trade union leaders walking the corridors of power
in Whitehall and enjoying 'beer and sandwiches at No. 10'. Consistently, in
the early-mid 1980s, the government refused to discuss economic issues with
the Trades Union Congress (TUC). Instead, in the public sector, it lent
ideological and financial support to managements' attempts to reassert
control, at the risk of prolonged strike action (1984 dispute at the Department
of Health and Social Security (DHSS) in Newcastle, the coal miners' strike
1984-5, the Railtrack dispute in 1994). Individuals' membership of unions, in
 What is human resource management? 83

special cases, was considered as incompatible with their status as employees

(Government Communications Headquarters (GCHQ) dispute); some 'mili-
tant' unions, notably the National Union of Mineworkers (NUM), were
presented as led by demagogues threatening democracy and their 'defeat'
celebrated as a victory against 'the enemy within'. In a nutshell, successive
Conservative governments have sought to marginalise trade unions through
restrictive legislation, strike defeat, unemployment and the ending of their
role in policy-making bodies.
Turning to the welfare state, UK governments of the 1980s and early 1990s
considered that receiving as of right a wide range of welfare and
unemployment benefits, pensions, housing, even aspects of education and
health, have also contributed to attitudes of dependency and passivity. Hence,
to quote Keat (1991, p. 5)
Along with increasingly stringent criteria for the receipt of benefits by right, in
which the principle of need is modified by a strongly voluntaristic conception of
desert, a key strategy is to encourage the commodification of previously state-
supplied goods, replacing them by consumer purchasable products- e.g., private
pensions, health insurance, home ownership, and so on. Individuals become non-
dependent and 'responsible' by taking financial responsibility for these matters, as
consumers; and the sphere of consumption thus becomes an important training
ground for the enterprising self.

The two meanings of the enterprise culture come together in the view that the
management of commercial enterprises is the field of activity in which
enterprising qualities are best put to use and developed. As enterprising
qualities are seen as virtues, this justifies and validates the workings of a free
market economy. At the same time, in order to maximise the benefits of a 'free
enterprise' economic system, firms and their participants must be seen to act
in ways that express enterprising qualities (Keat, 1991, pp. 3-4).
Now clearly major criticisms can be raised about many of the assumptions
that lie behind this vision of enterprise culture and the politico-economic
policies that have been adopted in its pursuit. 7 But as a political rhetoric
presenting a particular gloss to the intensification of competition discussed
earlier, its message is consonant with assumptions embodied in both the
'hard' and 'soft' models of HRM. The individualistic values (and anti-union
bias) that pervade the rhetoric of the enterprise culture are consistent with the
individualistic and unitarist values of stereotypical normative HRM models.
Its emphasis on the primacy of the market and the need to create enterprising
individuals and firms to compete successfully in the marketplace finds echoes
in the 'hard' model's emphasis on external integration- of the match between
strategy and environment, and of HRM policy, procedures and practices with
business strategy. The image of enterprising individuals as keen to take
responsibility, goal oriented and concerned to monitor their progress toward
goal achievement, motivated to acquire the skills and resources necessary to
84 Human Resource Management

pursue these goals effectively, seeing the world as one of opportunity rather
than constraint (Keat, 1991, pp. 5-6) is consistent with the values of
commitment and flexibility embodied in the 'soft' model. One could argue
too that the rhetoric about the sovereignty of the consumer is consistent with
the ideas about quality, also central to the 'soft' model. Finally the ideas about
competitive advantage that pervade HRM and the models of excellence are
part of the rhetoric of a free market economy, the bed-rock of the enterprise
culture.

HRM revisited: the critical-evaluative models

It is against this backdrop, contextualising the emergence of HRM, that a very

different set of models may be introduced. Several commentators (for
example, Legge, 1989a; Guest, 1990b, 1991a; Keenoy, 1990a, 1990b; Keenoy
and Anthony, 1992) have recognised a puzzle. On the one hand there is much
hype about the change from personnel management to HRM, on the other,
little evidence that either of the HRM models already outlined are being
implemented consistently or on a scale commensurate to the hype (cf. Storey,
1992b). (The extent to which the normative models of HRM are being
implemented will be analysed in detail in the following chapters.) Indeed, as
has already been discussed, it can be argued that there is little difference
between normative models of HRM and personnel management, although
there are clear contrasts between the normative models of HRM and the
descriptive-behavioural model of personnel management. Furthermore, if we
accept the contingent perspective of the 'hard' HRM model, it allows for the
equation of HRM with most of the existent employee relations styles; if we
accept the absolutist perspective of the 'soft' HRM model, it looks very similar
to the long-established sophisticated human relations model (see, also,
Marchington, 1992). So why all the excitement?
Sceptical commentators would take the following critical view. The
importance of HRM lies not in the objective reality of its normative models
and their implementation, but in the phenomenological reality of its rhetoric
(see Chapter 9). It should be understood as a cultural construction comprised
of a series of metaphors redefining the meaning of work and the way
individual employees relate to their employers. Just as a metaphor gives new
meaning to the familiar by relating it to the unfamiliar (and vice versa), so
those that comprise HRM can give a new, managerially prescribed meaning to
employment experiences that, within a pluralist perspective, might be
considered unpalatable.
Keenoy and Anthony (1992) present this argument in its strongest form.
They suggest that HRM is a rhetoric aimed at achieving employees' normative
 What is human resource management? 85

commitment to a politico-economic order, in which the values of the market-

place dominate all other moral values. As they suggest: 'once it was deemed
sufficient to redesign the organisation so as to make it fit for human capacity
and understanding: now it is better to redesign human understanding to fit
the organisation's purpose' (p. 239). The language of the HRM models is the
instrument of such cultural change. For, from a postmodernist perspective, it
is inappropriate to regard rhetoric as somehow separate from or lesser than
the 'real' world: rhetoric is the real world. For example, in late capitalist
societies of today, products are differentiated by image as much as by
substance; as consumption dominates production we buy the image
associated with the product rather than the product itself (cigarettes, coffee,
jeans). In an extreme form, it is argued, capitalism is now concerned with the
production and exchange of cultural forms: the material product is merely the
vehicle for the 'real' product: the image. (A good example of this would be the
Moscow branch of McDonald's.) The latter may incorporate the consumer
'itself': we are differentiated by our patterns of consumption - by purchasing
the product, the consumer acquires access to the product; by consuming it, the
consumer becomes part of the advertisement and, hence, 'the consumer
becomes the image' (Keenoy and Anthony, 1992, p. 237). Keenoy and Anthony
conclude:
In principle, cultural constructions, such as HRM policies and practices, can be seen
to embody this most advanced form of commodification process. The culture (a
product) is employed to create the images (products), which in turn are used to
reconstruct the culture (a product). The inherent potential of such circularity, du Gay
and Salaman (1990, p. 12) suggest, is such that employee identities can 'be built
around cultural change programmes, can be chosen, in an analogous way to the
consumer's choice of life style'. There is, it would seem, nothing more to be said.
(p. 287)

How then has HRM rhetoric been used to construct appropriate employee
identities and belief systems? And, to what purpose?

HRM and the American Dream

It could be argued that the early hyping, particularly of the 'soft' model of
HRM, in the US, owes more to the values it embodies, than any widespread,
consistent application of its practices or unequivocal evidence of its success.
According to David Guest's (1990b) persuasive analysis, HRM has been talked
up in the US because its values echo persistent themes in the American
Dream.
Guest's argument is as follows. The American Dream, 'a goal to pursue, in
part a counter to cynicism and despair', views America as a land of
86 Human Resource Management

opportunity in which individuals by hard work and self-improvement can

achieve the highest measure of success - from the 'log cabin to the White
House'. However, opportunities are not handed to the individual on a
government-provided plate. It is up to the individual to create his/her own
opportunities by pushing back the frontiers - whether the West, the 'final
frontier' of Space - or even the new frontier of the challenge of foreign,
particularly Japanese, competition. The frontier mentality, Guest (1990b, p.
390) suggests, includes elements of the 'self-reliant small businessman who
sets up on his own and takes on all comers, ... the desire for a challenge
against a powerful unknown adversary'.
The American Dream had taken a battering under the failure of the Great
Society and Vietnam under the Johnson years, Watergate under Nixon, and
the Iran Hostages under Carter. Enter Reagan, a genuine Hollywood
frontiersman, with a simple message that recaptured the American Dream:

America is back in business, but back on its own terms. The solutions to Japanese
competition can be found in America's own backyard, in getting back to basics. It
was 'morning in America' again, and America was feeling good about itself. (Guest,
1990b, pp. 390--1)

Guest suggests that three central themes underlying HRM resonate with the
American Dream. First, a belief in the potential for human growth is central to
the 'soft' model of HRM, and reflects all-American themes of motivation,
ranging from McGregor's (1960) Theory Y, Maslow's (1943) hierarchy of
needs, and Herzberg's (1966) motivator-hygiene theory. Irrespective of the
naivety and lack of empirical support for these theories, not only do they
capture the values of middle America but, in emphasising opportunities for
progress and growth, based on individual achievement, they epitomise the
values of the American Dream. 'And like the American Dream, the ultimate
goal is nebulous, it is some idealized and seldom attained state captured in
Maslow's elusive concept of self-actualization' (Guest, 1990b, p. 391). Such
theories, too, emphasise the importance of 'becoming', of developing rather
than arrival. This, Guest argues, is also consonant with the American Dream,
quoting Moore (1969) to the effect that

In the American ideological baggage, the man who professes to be satisfied has
'given up'. He has left the rat race and entered the treadmill, where progress is
foredoomed. Contentment is not a permissible goal; in fact it is downright immoral.

Such motivation theories, emphasising as they do, progress and growth, while
central to the OD and Quality of Working Life (QWL) movements of the 1960s,
fell out of favour in the more sceptical 1970s. The advent of the Great
Rhetorician, Reagan, and renewal of a confident America, brought back such
theories into fashion, riding in an HRM vehicle.
 What is human resource management? 87

Second, Guest argues, HRM expresses an optimistic desire to improve the

opportunities for people at work. Managers would like to create opportunities
for human growth in the workplace - if time, resources and a lifting of
constraints enabled them to do so. 'HRM provides an opportunity to espouse
the Dream and to display at least the good intention to turn it into
reality... [although] in most cases this is no more than a fantasy, a dream'
(Guest, 1990b, p. 392).
Finally, HRM reflects those aspects of the American Dream that highlight
the value of strong leadership, backed-up by a strong organisational culture,
both reflecting the spirit of 'rugged, entrepreneurial individualism'. Guest
points out how the war stories of the excellent companies foster such an image
around their founding fathers (for example, Tom Watson of IBM). The
qualities emphasised are those of transformational leadership, 'the ability to
generate commitment and enthuse others to innovate, to change and indeed
conquer new frontiers in the marketplace or on the shopfloor' (Guest, 1990b, p.
393). Even within bureaucracy, individual initiative can be expressed and old
frontiers challenged by entrepreneurship. Even if all Americans can no longer
fulfil the aim of owning their own business, they can take 'ownership' of their
own business or work performance within the transforming bureaucracy.
Guest concludes by suggesting that the marrying together of the 'soft' HRM
model with the American Dream has converted 'legends' of HRM practice,
that serve to reinforce an ideal, into myths that serve 'to obscure the less than
pleasant reality'. Thus stories about General Motors and Lockheed are of their
achievements in promoting HRM initiatives such as quality circles, not about
their simultaneous closure activities elsewhere in the organisation. The
importance of HRM then becomes the ability of its rhetoric to provide myths
that sustain managerial legitimacy through its close association with the
founding myth of the American Dream. If so
then the main impact of HRM in the United States may have been to provide a
smokescreen behind which management can introduce non-unionism or obtain
significant concessions from trade unions. . . Like the myths of the cowboy and
the wild west which served to obscure the reality of the massacre of the Indians, so
HRM can serve to obscure the assault on the union movement in the USA. HRM
then, presents the benevolent face of American management; and its practitioner is
the James Stewart of the new industrial frontier. (Guest, 1990b, p. 393)

HRM: the rhetoric of the enterprise culture?

An alternative view of HRM as rhetoric - and one that has focused on the UK
context - is to identify it as a mask for the less acceptable face of the enterprise
culture (Legge, 1989a; Keenoy, 1990b; Keenoy and Anthony, 1992). The
argument goes as follows.
88 Human Resource Management

The enterprise culture, as has already been discussed, presents an ideology

that prosperity and social justice are best achieved through enterprising
individuals exercising their talents and initiative in private business
enterprises, in a free market economy. But, as Keenoy and Anthony point
out, how is this optimistic philosophy to be squared with observation of the
consequences of deregulation: a sharpened exposure of both organisations
and individuals to the 'competitive edge'? How is the vision of a UK economic
miracle -less tarnished in the late 1980s, prior to the lengthy recession of the
early 1990s - to be reconciled with massive unemployment through cost-
cutting exercises and high levels of failure among newly established
businesses set up by those very same enterprising individuals? One argument
is that HRM, with its 'brilliant ambiguities' (Keenoy, 1990b), provides a
language that effects 'an occlusion between the imagery of the "enterprise
culture" and the experienced reality of increased competition' (Keenoy and
Anthony, 1992, p. 235).
Legge, Keenoy and Anthony all develop similar arguments. Legge (1989a),
for example, suggests that the 'new label' of HRM provides a different
language from that of personnel management. In the UK 'personnel
management' evokes images of do-gooding specialists trying to constrain
line managers, of weakly kowtowing to militant unions, of both lacking power
and possessing too much power. The new HRM language of the enterprise
culture, in contrast, asserts a new dynamic image: of line management's right
to manipulate and ability to generate and develop resources. The dual usage of
the concept 'resource', with its simultaneous passive and proactive connota-
tions, and its 'hard' and 'soft' version HRM models, is very useful here. While
the language and policies of the 'hard' version model can be used on
employees peripheral to the organisation, those of the 'soft' version can be
used to reassure and secure 'core' employees whose resourcefulness is
deemed essential for the achievement of competitive advantage.
Good examples of this are the rhetorics used to disguise potential
mismatches between a 'hard' external integration and the values of the 'soft'
mutuality model, and in presenting redundancy. First, rhetoric is used to
suggest mismatches between the demands of 'hard' and 'soft' models is
illusory. Actions that may appear to epitomise the treatment of individuals as
a variable cost, rather than resource, in the interests of business strategy, e.g.,
chopping out dead wood whose performance is not up to standard, tying
rewards closely to individual performance, transferring employees to other
jobs and parts of the organisation in the light of business requirements, is in
fact providing an opportunity for employees to develop their resourcefulness
and competencies. If some employees prove unequal to the challenge and
have to be 'let go' or if business circumstances dictate that some have to be
sacrificed in the interests of the organisation as a whole, this is really an
example of 'tough love', or 'care which does not shy away from tough
decisions' (Barham et al., 1988, p. 28; Peters and Waterman, 1982, pp. 96, 240).
 What is human resource management? 89

The use of 'tough love' as a rhetorical device to mediate this contradiction

may be illustrated by quotations from two managers, cited in Barham et al.,
(1988) and Foulkes (1986) respectively. First, in a booklet setting out its
management principles, an insurance company's chief executive asserts:

The needs of our business will be most effectively attained if the needs of people for
fulfilment, success, and meaning, are met. If people are in poor shape, the
company's objectives are unlikely to be achieved. Yet the needs of the business still
come first. People need to be developed, but this will not be achieved by treating
them with soft care, by allowing issues to be smoothed over without being properly
addressed. To treat people without care will cause them and, therefore the business,
to diminish. Experience suggests that the needs of people and the business will be
best met if we treat ourselves with 'tough love'. . . This is very different from
'macho' management, which basically does not involve care. Tough love requires
courage. Respect for the individual does not mean pandering to the individual's
weaknesses or even wishes. Involving people through tough love to secure both
their development and good performance requires managers to take initiatives...
People, of course, are far and away the most important resource in any company.
But they are not more than that. It is very easy to forget when endeavouring to
develop people and to care for them, and even to love them, that the needs of the
business must come first. Without that, there can be no lasting security. A fool's
paradise in which effort is concentrated only on the present well-being of the staff,
without regard for the future, will eventually disintegrate and it may well be the
staff that suffer most. (Barham et al., 1988, p. 28)

Note here that 'putting the needs of the business first', is presented as an
intrinsic part of 'tough love', and that 'love', as opposed to 'soft care'- or even
'pandering to the individual's ... wishes', is a question of sometimes being
'cruel to be kind'. Without toughness the staff may be the ones to 'suffer most'.
'Care' for the individual appears essentially as respect for employees' ability
to be 'developed' in ways that the organisation deems appropriate and,
implicitly, to be 'man (or woman) enough to take it' if personal sacrifice for the
good of the organisation is required. Indeed the very denial that 'tough love' is
at all like 'macho' management only serves to reinforce the suspicion that in
its manifestation to unfortunate employees exhibiting 'individual weaknesses'
it may appear indistinguishable.
The assumptions of paternalism and a unitary frame of reference which
pervade the quotation above are echoed in the words of a vice-president of
ITT, cited in Foulkes (1986, p. 382):

The positive fact is that the removal of a marginal, unproductive or unnecessary

surplus employee, provided it's legally and ethically handled, almost always
improves the morale of the average and above-average employees, who are, after
all, the people the company most wants to retain. It is demoralising to a good,
productive employee to observe a fellow worker who is consistently dogging it -
and getting away with it.
90 Human Resource Management

It is the personnel manager's responsibility to see that the level of employee

performance and productivity is always as high as possible, even when the
achievement of that objective requires the unilateral removal of unsatisfactory
employees.

The rhetoric of 'tough love' then glosses the potential tensions between
'external fit' and commitment to 'soft' HRM values. Development, flexibility
and adaptability are defined by the organisation and in its own interests. The
company's interests and those of its employees are equated. If an individual's
abilities and performance are defined as inappropriate by the company, given
the identification of employee and organisational interests, that person must
inevitably be redefined as no longer an employee, and a tough decision may
have to be made in loving concern for the employees the company wishes to
retain, who depend on its survival and growth.
Leaving aside the sacking of 'inadequate' individuals, HRM provides a new
rhetoric to obfuscate mass redundancies (Keenoy and Anthony, 1992, pp.
241-4). Not only is a euphemistic language provided - 'outplacing', 'down-
sizing'- better, still, 'rightsizing', 'manpower transfer', 'headcount reduction',
even 'workforce re-profiling', but as Keenoy and Anthony point out, the
reality of redundancy is not only marginalised, but represented as a positive
act.

At times the reality of job loss seems to be banished altogether from our linguistic
experience of the enterprise culture; a mere footnote in the voluminous strategy
documents. British Telecom, in their 1990 report to shareholders, noted: 'Our profit
figure includes an exceptional charge of £390 million relating to our restructuring -
particularly manpower release costs - and associated provisions for refocusing our
operations' (BT Annual Review, 1990, p. 2). The planned sacking of some 19,000
employees (7.7 per cent of the total workforce) becomes a minor distraction between
the 'profit figure' and the projected developments which were doubtless designed to
have beneficial consequences for next year's 'profit figure' ... The following year, at
one point, the workforce reduction is attributed to 'good cost control and the effects
of our capital investment programme' while elsewhere it is reported that the 'BTs
workforce was reduced by 18,000 during the year, by simplifying the management structure
and improving productivity. Operating profit ... increased by 10%. (BT Annual Review,
1991, pp. 2, 14- emphases added by Keenoy and Anthony, 1992, p. 242)

Keenoy and Anthony (rightly in my view) consider this rhetoric as seeming

both to preserve the image of the company and to sanitise the reality of the
workings of 'free' market forces. Free markets are supposed to bring economic
opportunity and wealth, not to destroy peoples' livelihoods. Management too
is absolved of responsibility for harsh decisions - all it is doing is virtuously
acceding to the imperatives of a free-market that knows best how to allocate
resources so that the fittest survives.
On the basis of such analyses, Keenoy (1990b) proposes that the reality of
HRM is as both a legitimatory and reality creating rhetoric. First, it acts to
 What is human resource management? 91

mediate the crises of the early 1980s and early 1990s recessions, of intensified
competition combined with high unemployment and a consequent loss of
employee confidence in the work ethic (i.e., employees not 'naturally'
acculturated into the enterprising individual ideology). It does this by
providing 'a legitimatory managerial ideology to facilitate an intensification
of work and an increase in the commodification of labour' (Keenoy, 1990b).
Second, the rhetoric of HRM becomes an agent of change, 'concerned with the
management of beliefs, with the manufacture of acquiescence in corporate
values, with the production of images'. Via the 'soft' model it persuades
employees to interpret in an appropriate light (as 'empowerment' or
'responsible autonomy') the organisational changes induced by adherence to
the 'hard' model (team surveillance, temporal flexibility, performance-related
pay). Hence it is possible to consider the symbolic rather than the social
construction of reality as the central concern of strategic HRM (Keenoy and
Anthony, 1992). Or as Legge (1989, p. 40) put it:

The language of 'tough love' seeks to coopt the assent of both those who may suffer
as well as those who may benefit from its effects. Ironically, it is the contradictions
embedded in HRM that have facilitated the development of this rhetoric even if they
simultaneously render strategic action problematic.

Conclusion: HRM in action

Having considered normative, descriptive-functional and critical-evaluative

models of HRM, we now need to go on to identify what is enacted in practice
- quite apart from the rhetoric considered briefly in the preceding discussion.
In looking at what HRM 'should be' two different perspectives have been
identified. The one sees HRM in a contingent light- as a strategically oriented
perspective on personnel management cohering with business strategy. This
contingent perspective seems to owe most to the 'hard' version of the HRM
model- and is the one favoured by Pettigrew and his colleagues at Warwick
in the UK, and by the Michigan School (Fombrun, Tichy, Devanna) in the US.
The other sees HRM in absolutist terms - as a special variant of personnel
management, typified by the 'mutuality' model of the Harvard School in the
US, and Guest's representation of such principles in the UK. Just what the
model might look like in substantive rather than categorizing terms has been
succinctly summarised by Sisson (1994b, pp. 7-9) (see Figure 3.4).
Subsequent chapters will consider how, and the extent to which, the
proclaimed implementation of HRM in organisations appears to follow either
of these perspectives. The issue of integration, dealt with in Chapter 4, will be
considered largely from a contingent perspective; those of flexibility,
92 Human Resource Management

commitment and quality from an absolutist one. In particular, in those latter

chapters, I will evaluate organisational practices using Guest's (1987)
framework as a map - or perhaps an image intensifier (see Figure 3.5) (see
also Noon, 1992). As a map it focuses attention on the relationships between
valued outcomes of HRM - the core components of Guest's normative model
(strategic integration, commitment, flexibility and quality), the policy choices
in areas of organisational and job design, recruitment, selection, appraisal,
training, development and reward that in theory should deliver these
outcomes, and their contribution to the achievement of organisational success
criteria.

Beliefs and Assumptions

Business and customer (internal and external) needs are main referent. Search for
excellence and quality and continuous improvement are dominant values. Aim to go
'beyond contract'; emphasis on 'can-do' outlook and high energy. Widespread use of
team analogy and metaphors. High levels of trust. HAM central to business strategy.

Managerial Role
Top managers are highly visible and provide a vision for the future that employees can
share. They also offer transformational 'leadership', setting the mission and values of the
organisation. Middle managers inspire, encourage, enable and facilitate change by
harnessing commitment and co-operation of employees; they also see the development
of employees as a primary role.

Organisation Design
'Federal', highly decentralised, 'flat' organisation structures. Job design congruent with
organisation structure, technology and personnel policies. 'Cross-functional' project
teams and informal groups responsible for particular products or services or customers;
they 'contract' contribution to organisation with jobs defined in terms of team role. Teams
enjoy large measure of autonomy and there is great deal of 'task' flexibility, if not
interchangeability, between members.

Personnel Policies
Numerical flexibility, i.e. core and periphery workforce. Time flexibility, e.g. annual hours
etc. Single status, i.e. reward, etc. of core employees reflects contribution. Selection -
emphasis on attitudes as well as skills. Appraisal- open and participative with emphasis
on two-way feedback. Training - learning, growth and development of core employees
are fundamental values; lateral as well as upward career advancement with emphasis
on 'general' as well as 'specific' 'employability'. Equal opportunities. Reward systems-
individual and group performance pay; skill-based pay; profit and gain sharing; share
ownership; flexible benefits package, e.g. 'cafeteria' principle. Participation and
involvement - extensive use of two-way communication and problem-solving groups.

Source: Sisson (1994b, p. 8).

FIGURE 3.4 Sisson's model of the HRM organisation
 What is human resource management? 93

A theory of HRM

HRM policies Human resource outcomes Organisational outcomes

Organisation/ High
job design Job performance

Management of change Strategic integration High

Problem-solving
Change
Recruitment Commitment Innovation
selection/
socialisation

Appraisal, training, Flexiblity/ High

development adaptability Cost-effectivenes

Reward systems

Communication Quality Low

Turnover
Absence
Grievances
Leadership/culture/strategy

Source: Guest (1987, p. 516).

FIGURE 3.5 Guest's normative HRM model

Notes

1. See Chapter 1, n.l.

2. Again, some differences may be observed between the US and British models. The
American models of HRM, in a similar manner to their models of personnel
management, assume a unitary frame of reference: that 'there is a long-run
coincidence of interests between all the various stakeholders of the organisation',
as Beer and Spector (1985, p. 283) would put it. Even where potential union
problems are recognised, cooptation is identified as the way forward: 'other
managers have decided to actively promote more cooperative relations with their
existing unions ... [concluding] that they could not successfully transform their
workforce management strategy without the active support of the unions' (Walton,
1985, p. 61). The British models adopt a rather different position. While Arm-
strong's 'revised' model (1987) merely makes some gestures in the direction of a
pluralistic stance, other commentators, in recognising that the HRM model is
essentially unitaristic, and marginalises the role that trade unions might play in
organisations, find this a source either of logical inconsistency within the model or
94 Human Resource Management

of practical unfeasibility in its execution. Thus, on the other hand, Fowler (1987,
p. 3) asks 'Is it really possible to claim full mutuality when at the end of the day the
employer can decide unilaterally to close the company or sell it to someone else?',
while, on the other, Guest (1987, p. 520) suggests that 'for many, the unitaristic
implications of human resource management could only begin to have an appeal
following a much more radical shift of ownership and control in industry'.
3. In 1971, 36·4 per cent of all employees in employment in Britain worked in
manufacturing; by 1992 this had fallen to 21'4 per cent. Conversely, in 1971, 52·6
per cent of employees worked in service industries; by 1992 this had risen to 71·6
per cent of employees. The severity of decline in manufacturing was particularly
marked in coal, oil and gas extraction; metal manufacturing, ore and other mineral
extraction; motor vehicles and parts; and textiles, leather, footwear and clothing.
The strongest growth was in private sector services; banking, insurance and
finance sector, hotels and catering and other services (personal services, recrea-
tional and cultural services) (Employment Gazette).
4. Women's share of employment has increased from 37'9 per cent in 1971 to 46'1 per
cent in 1991 (Employment Gazette).
5. In June 1992 45 per cent of female employees worked part-time. In 1971 15·4 per
cent of all employees worked part-time, by June 1992 this figure had risen to 25·2
per cent. The vast majority of all part-time working (93·2 per cent in 1992) in Britain
is located in the service sector and undertaken by women (81 per cent in 1991)
(Employment Gazette).
6. In 1979 unemployment was just under PA million. By 1983, following recession,
this rose to over 3 million, peaking eventually at 3·21 million in February 1986. In
spite of economic growth, unemployment only fell to 1~ million by June 1990,
before rising to over 3 million again by January 1993. Although the UK is now
emerging from recession (August, 1994) unemployment remains at around 2
million in spite of the demographic changes that have resulted in a marked
reduction of young people entering the labour market. Redundancies peaked in
the recession of the early 1980s but rose again in that of the early 1990s. Turnbull
(1988b) reckons that the official statistics, based on redundancies involving ten or
more workers, substantially underestimates the numbers that have been made
redundant in the 1980s and early 1990s. Further, such figures do not include job
losses through planned natural wastage, early retirement and so forth. In this
context, it should be noted that in the second Warwick Company Level 1992
survey, 37 per cent of respondents reported that delayering had taken place in
their companies in the last five years and 65 per cent and 44 per cent of finance
respondents assumed increased labour productivity and decreased headcount
respectively in their payroll budgets (Marginson et al., 1993, Tables 2.5 and 3.3).
7. For example, following Keat (1991, pp. 7-9) it might be argued that the image of
enterprising producers belongs to an earlier period of competitive capitalism, of
small-scale owner-managed firms, not the large-scale, globally organised compa-
nies, with ownership and managerial control separated, that dominate the 'free'
markets of today. Further is consumer sovereignty somewhat illusory given the
use of sophisticated marketing and advertising techniques to shape and control
consumer choices? Proponents of the enterprise culture would counter these
arguments by pointing to the increasing sophistication of consumers who demand
high quality, differentiated, sometimes even 'green' products; of producers'
 What is human resource management? 95

recognition that business is 'market-led'. They would highlight the post-Fordist

theories pointing to decentralisation and autonomy of small business units and so
forth. A further counter argument might suggest that 'market-led' production
owes more to the dominance of large retailers than consumers per se, that the
autonomy of small business units is illusory given centralised financial controls
and investment decision-making, etc.