View of HIGH PERFORMANCE HR PRACTICES: A REVIEW OF EVOLUTION OF THE CONSTRUCT AND THEORETICAL FRAMEWORK

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Vol.04,Special Issue 08, (EMDMSCBW-2019) December 2019, Available Online: www.ajeee.co.in/index.php/AJEEE

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HIGH PERFORMANCE HR PRACTICES: A REVIEW OF EVOLUTION OF THE CONSTRUCT AND THEORETICAL FRAMEWORK

1Ruchi Singh Maurya, ²Dr. Anindita Chatterjee

1Junior Research Fellow, IMS, DAVV, Indore (M.P.)

2Assistant Professor, IMS, DAVV, Indore (M.P.)

Abstract:- The impulse to improve the functioning of organizations requires managers to adopt a combination of strategically driven human resource (HR) practices. Such practices have been adverted as high performance HR practices (HPHRPs). Although, a number of multidisciplinaryresearches have been conducted, over the years to explain the impact of HPHRPs on various organizational outcomes, however, only a few give a brief outline of the origin and development of such practices over the years.The present paper responds to the call for a research, giving a brief information about the beginning and growth of HPHRPs in chronological order.

Keywords: HR Practices, High Performance HR Practices, Human Resource Management.

1. INTRODUCTION

The traces of management are hidden in the pages of history. Management skills were also present at the time ofpyramid construction in Egyptaround 2000 BC (Chiu, 2010). Even though there was an absence of structured philosophy regarding the management ofhuman resource, but the importance of labour was undeniable during those days too. As the time passed the strength and importance of people for organization has been recognized and a new discipline named human resource management emerged in 1970s (Poole, 1999).

The discipline is the repository of numerous human resource practices and help to manage everything from entry to exit of employees from the organization, i.e., to hire, train, retain, maintain and motivate employees (Price, 2011). Since the evolution of HRM, there has been a paradigm shift and countless changes in human resource practices. In the course of time it has been realized by managers that there exists some interlinkage among these practices and if they are used in combination, they have a synergistic impact on the firm’s performance. These bundles are popularly known as HPHRPs (Moynihan et al., 2002).

HPHRPs can be defined as a set of distinct but interrelated HR practices, carefully planned and consistently related to organizational objectives and performance.Yet, its precise definition has always been a subject of debate (Sung and Ashton, 2005).HPHRPs assist the organization in creating a supportive environment that helps employees become highly involved and strive hard to accomplish organizational goals (Mostafa, 2017). The numbers and types of practices comprising HPHRPs are not fixed.

Teams of researchers developed a number of combinations of HR practices that improvea firm’s performance, in the form of models, from time to time. (Beer et al.,1984;

Devanna et al.,1984;Guest, 1997; Hendry and Pettigrew 1990).Earlier HPHRPs were used merely as a tool for improving firm’s performance by enhancing employee involvement but now they are employed to aid in innovation, employee engagement and employee service behaviour.It might sound easy, but it has taken decades for HPHRPs to attain its current form.This paper aims to understand the origin, growth, and development of HPHRPs.

2. METHODOLOGY

The research is based on secondary data drawn from scholarly articles in acclaimed research databases and books.

3. LITERATURE REVIEW

The evolution of HPHRPs is not direct but phased and chronologically longitudinal.Its historical growth involved different phases. Its very inception actually started with the recognition of the significance of employees as a resource as compared to the other resources for the organization (Ted and Metcalf, 1920). The importance of employees in the organization was first highlighted in early 1920s and it was argued that the employers who are utterly careless about their employees' happiness and not keeping them contented are inhumane, also resulting in high employee turnover which will weaken the industry in the long run (Mayo, 1923). Now the new center of attention and solitude was the human element.

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The first phase of the development of HPHRPs started with the beginning of personnel management practices which work very much like a staff function dealing mostly with the technical aspects of recruitment, evaluation, training, and remuneration of employees (Attwood and Dimmok, 1969). But there was an absence of systematic relationship between such practices and also impact of those practices on overall organizational performance and their strategic relevance was not clear (Ahammad, 2017;

Rowland and Summers, 1981).

The second phase began with the appearance of human resource practices by mid of 1970s as a replacement for personnel management practices (Schular and Jackson, 2005;

Lundy, 1994). Unlike personnel management practices, HR practices focus more on the human aspect and are designed to hire, develop, inspire and retain workers for the success and survival of the organization (Tan and Nasurdin, 2011). In the 1980s, researchers began discovering the interrelatedness among HR practices and proposed a model of four practicesviz., selection, assessment, development and reward helping to improve organizational effectiveness (Fombrun et al., 1984). Similar attempts were made by other scholars from Harvard and MIT to show the link among these practices (Beer et al., 1985;

Kochan et al., 1986).During 1990s the focus shifted towardcreating HR practices with a good fit with organizational strategy to improve organization performance (Arthur, 1992).

Third phase startedwhen it was revealed by scholars that individual HR practices are not able to improve a firm’s performance alone, but if a bundle or an arrangement of interrelated HR practices is created they can contribute to firm’s overall performance (Macduffie, 1995). Such bundles were later called as high performance work practices (Huselid, 1995). In order to define the meaning of these practices, scholars used different terminology in the last few decades like high performance HR practices, high commitment management practices, high commitment HR practices, progressive HRM practices, high performance employment practices, high performance work system, high involvement work practices, performance oriented HR subsystems etc. (Harley, 2002; McCartney and Teague 2004; Timiyo, 2014; Rubel et al, 2018; Camps and Luna-Arocas, 2009; Gong et al, 2009).

Althoughthe available literature lacks a specific definition of HPHRPs. Nevertheless, over the years,the authors tried to define HPHRPs in different ways and furthermore to propose the specific components that comprise HPHRPs. A research conducted in American companies revealed that they were using a number of interrelated HR practices like self- directed teams, job rotation, problem solving groups, and quality management, resulting in higher productivity (Osterman, 1994). This was complemented by a similar research based on top five firms, i.e. plenum publishing, circuit city, tyson foods, wal-mart, and southwest airlines in 1995 that enumerated 13 interrelated HR practices for managing people resulting in a high level of performance viz. employment security, selective recruitment, high wages, incentive pay, employee ownership, information sharing, participation and empowerment, self-managed teams, training and development, cross – utilization, Wage compression, promotion from within symbolic egalitarianism (Pfeffer, 1995). All the practices observed by Osterman and Pfeffer are now popular as HPHRPs or best practices.

A further study in 1996 endeavored to characterize the kind of HPHRPs and the conditions in which these practices help to improvethe performance of a firm,based on three important perspectives i.e., universalistic, contingency, and configurational. The universalistic approach proposed a set of sevenpractices generating positive results regardless of the circumstances associated with organizations (Delery and Doty, 1996). The contingency approachstated, a set ofpractices lined up with the organizational strategy that can be applied in specific settingshelping in accomplishing superior performances.

Alsoconfigurational approach asserts that set of human resource practice helps to produce the desired degree of performance only if these are aligned suitably with the organization’s culture, setting, context and structure (Youndt et al., 1996; Timiyo, 2014).

One more contemporary researchconducted among US companies to study HR practices and firm performance linkage indicated that a set of three practices, i.e., selective staffing, training and compensation positively affects the firm’s performance, whether it is a for-profit or non-profit firm (Deleny and Huselid, 1996).To address the impact of HPHRPs on establishment level outcomes a study was conducted and the results showed that apart from enhancing firm’s performance, these practices have other valuable outcomes like higher morale, greater adaptability, lower wastage of resources and so on (Cappelli and Neumark, 1999).

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Fourth phase started by the beginning of 2000’s, when researchers attempted to conceptualize the factors that makes HPHRPs different from that of traditional practices.

The components identified were training, employment security, pay incentive, participation in substantive decision making, quality improvement teams and it was held that HPHRPs are the coherent set of practices which are complementary to each other and improves organizational performance (Appelbaum et al., 2001).At the same time a study of the steel, apparel, medical electronics and imaging industries revealed three significant factors that make up HPHRPs i.e., skills enhancement, incentives, and opportunity to participate (Bailey et al., 2001).It was held that these practices increases the potential of employees by giving them autonomy whereby resulting in improved performance (Harley, 2002).

After blending various previous works, it was proposed that when individual, but closely associated HR practices are utilized in a bundle together to select, train, retain and motivate employees to improve firm’s performance, these are known as HPHRPs (Way, 2002). Scholarsalso suggested that the adoption of these HPHRPs by an organization is determined by certain important contextual factors such as cognition, skill, professionalism, participation, communication skill, political influence and personality traits of HR practitioners (Murphy and Southey, 2003). It was additionally highlighted in the literature that the total effect of the set of mutually interrelated practices that constitutes HPHRPs, on the firm’s performance is much greater than the sum of the same practices working individually (Bowen and Ostroff, 2004).

It was held that HR practices comprising HPHRP’s have a synergistic effect on firms' performance (Takeuchi et al., 2007).With the passage of time scholars marked the presence of HPHRPs in various industries across the globe, including Irish hospitality industry, Japanese firms, Pakistan manufacturing and service industry, South African companies, public, private and MNCs in China, Australian business firms etc., and stated that these practices improves firm’s performance by providing a competitive edge to them (Connolly and McGing 2007; Takeuchi et al., 2007; Riaz, 2016; Grobler and Bruyn, 2018; Wang et al., 2007; Kidwell and Fish, 2006).Scholars have noticed some more beneficial consequences of HPHRPs in Dutch health sector as well, such as increased affective commitment and citizenship behaviors of employees andalso classified HPHRPs into two categories. Firstly, practices resulting in employee development such as training, task enrichment, etc., and practices leading to high employee involvement such as autonomy, participative decision making etc.(Boselie, 2010).

Another study classified these practices into three main categories.Firstly,practices related to employee flow like staffing, training, job security, etc., Secondly, practices of work related, such as participative decision making, job design, etc., and Lastly,evaluation and compensation related practices, like performance appraisal, reward, recognition etc.

(Bamberger and Meshoulam, 2000).

High performance HR practices also influence productivity and turnover, which indirectly improves firm’s performance (Sun et al., 2007).It was held that these practices first foster affective commitment that makes employees a significant, uncommon, relatively rare, and explicit asset for an organization which is difficult to duplicate by rival firms and thus result in higher performance by giving a competitive edge to it (Gong et al., 2009). It has further been proposed in a study carried out in Istanbul, Turkey that HPHRPs like participation, empowerment, job rotation, self-directed work teams, and contingent compensation keeps employees contented and mollified with their jobs, consequently increases employee satisfaction (Gurbuz, 2009).

These practices also result in various attitudinal and behavioral outcomes (Kehoe and Wright, 2013). Similar studies conducted in Greece and most Mediterranean countries proposed that HPHRPs consist of six important elements like compensation policy, decentralisation and self-managed teams, information sharing, selective hiring, training and development, and job security (Vlachos, 2009).Meanwhile the scholars carried outanother study in Hong Kong firms and marked that there are nine practices that constitute HPHRPs which are job security, job enlargement, promotion, selective hiring, high remuneration, including compensation and fringe beneﬁts, extensive training, information sharing, performance feedback, and health and safety practices (Chan and Mac, 2012).

A study of Iranian hospitality sector additionally highlighted that HPHRPs like compensation, reward and empowerment along with superior and coworker support helps to reduce turnover by increasing job embeddedness (Karatepe, 2013). In the last couple of

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years, it has been reported by the researchers that HPHRPs act as a link between HR strategic role and firms’ performance (Mitchell et al., 2013). Moreover, the recent research indicated that the effectiveness of these practices depends on four important factors; firstly, the size of firm; secondly, the awareness of such practices; thirdly, the owner’s desire to have such practices, and lastly, availability of resources (Kroon et al., 2013).Several studies have also been conducted in Indian context to explore the presence of these practices and their impact on different sectors.

A study of the Indian educational sector revealed that the teachers feel less exhausted when HPHRPs are applied within the strategic framework (Jyoti et al., 2015).A similar study in Uttarakhand tourist hotels indicated that they are utilizing a bundle of HPHRPs to promote service innovative behaviour among employees (Dhar, 2015).

Furthermore the study of power based Indian companies also concluded a positive relationship between HPHRPs and organizational performance (Maduli, 2015). The impact of such practices has also been tested in Indian banking industry and software companies (Jyoti and Dev, 2016; Arunprasad, 2017).Now a days companies are using HPHRPs as a tool for innovation, employee engagement and employee service behaviour (Mazzei et al., 2016; Karam et al., 2017; Rubel, et al., 2018).

4. CONCLUSION

After reviewing the literature, it is concluded thatthe concept of HPHRPs evolved gradually in chronological order.An overlap is found in HR practices and orientation of HPHRPs. In other words, it can be seen as the next phase in the development of HR practices as the concept originatedwith the realization of a systematic relationship between individual HR practices and their positive synergistic impact on firms' performance when used in a bundle.

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