Professional Documents
Culture Documents
The contributors to this special issue provide unique perspectives and insights about the future
of human resource management, and many of their ideas present opportunities for future re-
search. Our intent is to focus on identifying and briefly discussing the key needs and directions
suggested by these articles. The discussion is organized around four general themes: the HR
function and its impact, the roles of HR professionals, the value of HR competencies, and the
HR implications of globalization. © 2005 Wiley Periodicals, Inc.
The HR Function and Its Impact one could interpret their message as recom-
mending an agency theory lens. Agency the-
Creating Market Value ory focuses on the potential costs associated
with a separation of principals (owners) and
A common theme throughout these articles agents (managers) (Eisenhardt, 1989). While
is that the HR function (defined as both the an agency theory perspective typically is ap-
department itself and the domain of activi- plied in discussions of compensation, the Ul-
ties that we call HR) is an organizational re- rich and Smallwood approach expands its ap-
source that can, and should, contribute to plication to decisions regarding staffing,
firm-level competitive advantage and value performance management, and training and
creation. The authors, however, place differ- development. They believe that HR activities
ent emphases on what perspectives, ap- need to positively impact intangible value, as
proaches, and/or practices are necessary for reflected in the premium the market is will-
HR’s potential to be realized. ing to pay above a firm’s earnings and book
Ulrich and Smallwood (p. 137) focus on value. This perspective is consistent with an
the need for HR to become more “investor- “investor-literate” approach to HR as well as
literate.” Although these authors did not use with previous arguments in the strategic
agency theory specifically in their analysis, HRM (SHRM) literature (e.g., Becker,
Correspondence to: Mark V. Roehling, School of Labor & Industrial Relations, 429 SKH, Michigan State
University, East Lansing, MI 48824, (517) 355-3335, roehling@msu.edu
Human Resource Management, Summer 2005, Vol. 44, No. 2, Pp. 207–216
© 2005 Wiley Periodicals, Inc. Published online in Wiley InterScience (www.interscience.wiley.com).
DOI: 10.1002/hrm.20066
208 • HUMAN RESOURCE MANAGEMENT, Summer 2005
Huselid, Pickus, & Spratt, 1997; Delery & the development and maintenance of organi-
Doty, 1996; Welbourne & Cyr, 1999; Wright zational effectiveness. Ulrich and Smallwood
& Snell, 1999) While these studies examine emphasize organizational capabilities as an
the relationship between HR and firm per- HR outcome critical for superior organiza-
formance outcomes in large samples of firms, tional performance and a key HR deliverable
The HR they do not specifically study how HR prac- around which this transformation should
function is tices directly affect intangibles. We are still take place. The concept of organizational ca-
transforming its missing the content of the infamous “black pabilities is supported by logical arguments
focus from the
management of
box” (i.e., knowledge of exactly how HR im- and has considerable intuitive appeal. How-
human pacts people to drive market value). ever, much remains uninvestigated. For in-
resources to the Future research, then, needs to more di- stance, we have a poor understanding of the
development rectly examine the overall process that explains organizational capabilities required for orga-
and mainte- the relationship between HR activities and nizational competitiveness and of how the
nance of
firms’ market value. How does HR impact firm HR function must transform to deliver these
organizational
effectiveness. value? Does the market recognize and value outcomes. Numerous lists identifying impor-
being an “employer of choice” (e.g., being tant organizational capabilities have been
anointed as one of Fortune’s “Top 100 Em- proposed, but few have been examined em-
ployers”) as an “intangible asset”? Or do “em- pirically in research settings.
ployer of choice” HR policies and practices im- It has also been argued that since orga-
pact market valuations indirectly by affecting nizational capabilities are deeply rooted in
human capital, social capital, employee reten- human resource capabilities (e.g., employee
tion, and productivity? While some prelimi- attitudes and social networks), HR is best
nary evidence exists on these issues (e.g., positioned to deliver these outcomes. Yet, we
Chauvin & Guthrie, 1994; Fulmer, Gerhart, & know very little about how HR can deliver
Scott, 2003), many issues remain unresolved. these outcomes. This knowledge gap re-
There is also reason to believe that in- quires research designed to identify a set of
dustry conditions, such as technological in- organizational capabilities that can serve as
tensity or capital intensity, may constrain or deliverables for HR in the twenty-first cen-
facilitate the potential impact of HR on mar- tury, as well as ways in which HR can be de-
ket value. For example, Ulrich and Small- signed and practiced to enhance these capa-
wood emphasize the relationship between bilities.
market value and traditional organizational Research of this type should focus on
drivers such as physical assets and earnings. several areas. First, the relationship between
However, this relationship varies substan- organizational capabilities and organizational
tially across industries, and it is likely that effectiveness, however defined, needs to be
the ability to positively manage intangible as- established. As a practical matter, showing
sets also varies across industries. Thus, a the link to organizational effectiveness may
“new economy” industry (e.g., computer be the only way to convince those HRM pro-
services) has an average price to earnings fessionals who are change-resistant to think
(P/E) ratio of 41.79 and a price-to-book ratio in organizational capability terms. Here, the
of 6.54, whereas an “old economy” industry contingency perspective is useful because a
(e.g., auto and truck manufacturing) has a set of organizational capabilities that leads to
P/E ratio of 9.76 and a price-to-book ratio of effectiveness is likely to depend on a host of
1.56 (“Industry Summary,” 2004). Is the po- organizational, strategic, and environmental
tential impact of HR on intangible assets as characteristics. A contingency approach
great in auto and truck manufacturing as it is should also be followed by researchers when
in computer services? determining the appropriate level of analysis
(e.g., firm, business unit) for assessing the
Enhancing Organizational Capabilities relationship between organizational capabili-
ties and “organizational effectiveness.”
The HR function is transforming its focus A second focus should be on research
from the management of human resources to that moves past the simple identification of
The Future of HR Management: Research Needs and Directions • 209
organizational capabilities. One area for firms miss an alternative, differentiated strat-
study is the development of reliable tools egy that might be more effective? Do profes-
for their measurement. If we cannot meas- sional organizations and consulting firms ac-
ure organizational capabilities, it will be tually reduce competitive advantage If we cannot
very difficult to research this topic with opportunities for HR by standardizing partic- measure
organizational
rigor. Another way to move beyond identifi- ular bundles of practices, thereby ignoring capabilities, it
cation is for researchers to evaluate how potentially important contextual influences will be very
HRM affects the development and mainte- on the effectiveness of HR practices (Paauwe difficult to
nance of organizational capabilities. This & Boselie, 2003)? To what extent do political research this
type of research should examine functional considerations, HR professionals’ self-inter- topic with
rigor.
complementarities among individual HR est, and the desire (if not need) for externally
practices, treating HRM as a system of legitimized “solutions” (rather than thought-
practices or as a value chain that imparts ful assessments of the recommended prac-
capabilities to organizations. tice’s likely effectiveness) drive the adoption
and diffusion of HR “best practices”? These
The Effect of Benchmarking and “Best and related questions regarding the practice
Practices” on Competitive Advantage of “best practice” are deserving of researchers’
attention.
Armstrong (p. 195) discusses the important
role of professional organizations (such as “Fit” with a Twist?
the World Federation of Personnel Manage-
ment Associations) in setting standards for Most SHRM research focusing on “fit”
the profession and in identifying important (alignment) has failed to find a positive ef-
competencies. This description is consistent fect for the fit between HR and firm strategy
with the institutional theory perspective that (e.g., Arthur, 1994; Delery & Doty, 1996;
views HR professionals as key promoters of Huselid, 1995). SHRM researchers (e.g.,
normative or “best practice” solutions that Cascio, Boudreau, and Wright) continue to
lead to imitation across organizations, or talk about the importance of alignment/fit
what DiMaggio and Powell (1983) call “nor- between HR practices and firm strategy.
mative isomorphism.” However, rather than However, rather than looking at fit between
reflecting rational choices aimed at maximiz- generic firm strategies (e.g., differentiator/in-
ing wealth or competitive advantage, institu- novator versus cost leader) and generic HR
tional theory views a firm’s choice of HR practices (e.g., commitment-based HR ver-
practices as reflecting the firm’s attempt to sus control-based HR), newer models are be-
attain legitimacy in its broader external envi- coming more specific. For example, align-
ronment. Institutional theory further argues ment comes from HR practices that are
(supported by some empirical evidence) that aimed at fostering/supporting the same orga-
in exerting their influence on how organiza- nizationally relevant outcome (e.g., all aimed
tions understand and respond to institutional at customer service). This research contrasts
pressures, HR professionals are motivated, at with the early SHRM fit studies that focused
least in part, by their self-interest in estab- on generic HR practices and generic strate-
lishing power within organizations (Edel- gies. While the refinements in the newer
man, 1992; Edelman, Uggen, & Erlanger, SHRM appear well reasoned, these models
1999). should be tested empirically.
The new institutional theory perspective
and the mixed evidence supporting the gen- The Impact of HR Technology
eralizability of a wide range of “best prac-
tices” raise important questions regarding In many organizations, technology changes
the effects of benchmarking and other forms have led to radical resource redeployment in
of best practice imitation on organizational what managers do. Many of the reporting ac-
performance. For example, in overly pursu- tivities performed previously by HR repre-
ing an imitation strategy, might not some sentatives now can be performed by man-
210 • HUMAN RESOURCE MANAGEMENT, Summer 2005
There is arguably an even greater need and changing employees’ mental models
for research examining how HR competen- take on an additional level of complexity—
cies, once identified, can be most effectively and potential contribution—when examined
developed. Which HR competencies can be in a global context. In addition to investigat- HR in global
acquired effectively through formal HR ing the previously identified research gaps in firms must
understand how
training (i.e., HR graduate programs), and global settings, the articles in this special to develop
which require experiential learning or signif- issue suggest two additional research areas managers into
icant on-the-job experience? Considerable necessitated by globalization: developing effective global
theoretical guidance for research addressing global leaders and the legal environment of leaders.
these issues is available in the education and global HR.
training literatures.
Research regarding the effectiveness of Developing Global Leaders
one type of formal HR training would seem
particularly likely to generate interest. For The importance of leadership development
example, HR certification programs, such as as one of the key deliverables of HR has been
those offered by the Society of Human Re- stressed in this issue (e.g., Roberts & Hirsch,
source Management, have proliferated in re- p. 171). Yet, when actually describing HR
cent years, and it is suggested that HR certi- practices designed to develop leaders and
fication will be a growing part of the future construct an effective leadership pipeline in
of HR (see Losey, Meisinger, & Ulrich, p. an organization, we know relatively little
201). However, anecdotal evidence indicates about what to do. This knowledge gap is par-
that some HR executives view broad certifi- ticularly apparent for the challenges HR
cation programs as offering little substantive faces in transforming domestic, ethnocentric
value in relation to the investment required managers into effective global leaders. It is
(compared to narrowly targeted seminars). not simply enough to know who effective
Beyond the acquisition of factual HR-rele- global leaders are and what they do. HR in
vant knowledge that can be assessed by pen- global firms must understand how to develop
cil-and-paper tests, does the learning that oc- managers into effective global leaders. While
curs in HR certification programs transfer to some well-reasoned guidance is available
the workplace and improve participants’ job (e.g., Mendenhall, Jensen, Black, &
performance? Or is the primary benefit of Gregersen, 2003), there is a need for sys-
HR certification the effect it may have on at- tematic research in this area. Research that
tendees’ personal outcomes (e.g., promotion combines career development (e.g., examin-
opportunities) through symbolic or “signal- ing the careers of great global leaders and
ing” processes? what they have experienced) and leadership
research to produce information for HR
Globalization global practice would seem to be especially
promising.
Globalization is a high-priority concern for
just about every organization (Wright & The Legal Environment of Global HR
Snell, p. 177) and a force that cuts across
the three preceding research themes. That Ensuring compliance with applicable em-
is, globalization has potential implications ployment laws has been characterized as
for virtually all of the research needs and di- both a core responsibility (Cascio, p. 159)
rections we already have identified. For ex- and a principal value (Wright & Snell, (p.
ample, HR’s ability to deliver business suc- 177)) in the future of HR. However, global-
cess, and attempts to accomplish this goal, ization and the resulting growth of multina-
are influenced by the increased competition tional employers make it increasingly diffi-
attributed to globalization. Also, the previ- cult for HR professionals to fulfill that
ously discussed research needs regarding responsibility and “live the value.” It is hard
HR’s role in facilitating collaboration, creat- enough keeping abreast of developments in
ing and sustaining organizational culture, employment law in one country; few global
214 • HUMAN RESOURCE MANAGEMENT, Summer 2005
HR professionals have the time to follow tive interactions that lead to claiming behav-
legal developments in the multiple countries ior by employees (Shore et al., 2004). This
where they may be supporting their business. strategy is supported by theory and research
Moreover, in international contexts, employ- in the justice literature regarding legal
ment decisions that normally involve the claiming behavior (e.g., Goldman, 2003;
analysis of one country’s law may now re- Groth, Goldman, Gilliland, & Bies, 2002)
quire multiple, and sometimes conflicting, and is consistent with the approaches to the
legal analyses. As others have observed, employment relationship advocated by Tsui
“Many of the legal dilemmas facing man- and Wu (p. 115) and Dyer and Ericksen (p.
agers in the global world of business have no 183). However, there is a need for more re-
clear-cut answer” (Siedel, 2001, p. 629). search investigating the extent to which the
How is HR responding to this challenge? “good employee relations strategy” (or other
Is the added level of legal complexity and un- strategies for managing the legal environ-
certainty faced by global HR executives hav- ment of global HR, such as decentralizing
ing adverse effects on their ability to carry global HR) is actually being employed, and
out other responsibilities? Or are global HR with what effect.
professionals employing strategies that allow
them to effectively manage the challenges of Conclusion
a global legal environment? For example, it
has been argued that because of the in- The unique perspectives and insights pro-
creased complexity and uncertainty of em- vided by the authors of this special issue
ployment laws, the effective management of combine to create a vision of the future of
employment legal risk will require multina- HR that is both promising and challenging.
tional employers to increasingly focus on the By addressing the research needs suggested
management of the employee-organization by that vision, we hope to assist the field of
relationship so as to promote goodwill to- HR in both understanding the future and
ward employers and avoid the types of nega- meeting its challenges.
Wendy R. Boswell is an assistant professor and Mays Research Fellow in the De-
partment of Management, Mays Business School, Texas A&M University. She earned
her PhD in human resource studies from the School of Industrial and Labor Relations
at Cornell University. Her research interests include employee attraction and reten-
tion, work-related stress, employee strategic alignment, and job search behavior.
Paula Caligiuri is the director of the Center for Human Resource Strategy (CHRS)
and an associate professor of human resources management at Rutgers University in the
School of Management and Labor Relations. She is also a visiting professor at Università
Bocconi School of Business in Milan, Italy. She researches, publishes, and consults in
three primary areas: strategic human resource management in multinational organiza-
tions, global leadership development, and global assignee management. She is on several
editorial boards and is an associate editor for Human Resource Management. She holds
a PhD from Penn State University in industrial and organizational psychology.
The Future of HR Management: Research Needs and Directions • 215
Daniel Feldman is the Synovus Chair of Servant Leadership and director of the
Leadership Research Consortium at the University of Georgia. He is the current edi-
tor-in-chief of the Journal of Management and has served as chair of the Careers Di-
vision of the Academy of Management. Dr. Feldman is nationally recognized for his
research on career development and has authored six books and more than 100 arti-
cles on such topics as organizational entry, retirement planning, layoffs, and career
change. He holds a PhD from Yale University.
Judith W. Tansky is a senior lecturer in labor and human resources in the Max M.
Fisher College of Business at Ohio State University. She earned a PhD in labor and
human resources with a minor in organizational behavior from Ohio State University.
Her primary areas of research, teaching, and consulting are human resources in small
and entrepreneurial firms, compensation, and employee development.
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