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this scenario, an organization that adopted a majority of the practices would be no better
off than the one that adopted none of them because the chain tying together the different
elements of HRM would be broken.
By contrast, bundles are ‘additive’. Generally speaking, the more practices that are in
place the better, so long as some distinctive core exists.
In other words, it may be
possible to adopt a large number of high commitment HR practices and ignore others,
but still gain from the interactive effects of those that are in place. Questions then arise
as to how many practices are needed to make a difference, from what areas of HRM
these are to be drawn and whether certain practices are fundamental to make the
synergies work.
2.2.3 Universal or ‘best practice’ approaches to HR bundles
One major perspective on human resources and performance linkages is the idea of
‘best practices’, or ‘high performance work practices.’ This view emphasises the need
for strong consistency among HR practices (internal fit) in order to achieve effective
performance. It receives a high degree of empirical support (Huselid, 1995; Delaney
and Huselid, 1996; Arthur, 1994; Ichniowski et al., 1997; MacDuffie, 1995). Pioneered
by the prominent researcher Pfeffer (1994), cited in Stiles (2011) there are 15 HR
practices that have primarily been subsumed. Later in Pfeffer’s work (1998), a set of 7
HR practices is revealed: employment security/ turnover intention, selective hiring, self-
managed teams, high compensation
contingent on performance, training, reduction of
status differentials, and sharing information.
Arthur (1992, 1994) reports that the HR practices focusing on enhancing employee
commitment (e.g.
decentralised decision-making, comprehensive training, salaried
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compensation, employee participation) are related to higher performance. Conversely,
he finds that the HR practices focusing on control, efficiency
and the reduction of
employee skills and discretion are associated with increased turnover and poorer
manufacturing performance. Similarly, in a study of the high performance work
practices, Huselid (1995) points to the fact that investments in HR activities, such as
incentive compensation, selective staffing techniques and employee participation, result
in
lower turnover, greater productivity and increased organizational performance
through their impact on employee skill development and motivation.
In sum, the more the high performance HRM practices are used, the better the
performance as indicated by productivity, turnover and financial soundness is yielded.
Although different types of the
fit approaches are compared, the bottom line of the
results seems to be invariable with the strongest research support.
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