HRM systems between control and commitment: occurrence, characteristics and effects on HRM outcomes and firm performance

• DOI: http://doi.org/10.1111/1748-8583.12054
• Author: Dorothea Alewell,Nina Katrin Hansen,Sven Hauff
• Date: 01 November 2014
• Published date: 01 November 2014

HRM systems between control and commitment:

occurrence, characteristics and effects on HRM

outcomes and firm performance

Sven Hauff,Dorothea Alewell and Nina Katrin Hansen, Department of Business

Administration, University of Hamburg

Human Resource Management Journal, Vol 24, no 4, 2014, pages 424–441

In the literature, it is often assumed that traditional, control-oriented HRM systems are increasingly

being replaced by commitment-based HRM systems because the latter generally result in higher firm

performance. However, an HRM system’s effectiveness may depend on an organisation’s external and

internal context, and neither control nor commitment HR systems are without disadvantages. Thus, the

empirical validity of this claim is not clear ex ante. This paper analyses the empirical diffusion and

determinants of control and commitment HRM systems in Germany as well as their impact on HRM

outcomes and firm performance. The findings indicate that between the two extreme forms of high-control

and high-commitment HRM systems, there are two hybrid forms (long-term-oriented control system and

regulated commitment system) that combine elements of both ‘pure’ systems. Commitment HRM

systems outperform the high-control HRM system concerning many HRM outcomes and firm

performance measures. However, in direct comparison, the high and the regulated commitment HRM

systems do not show substantially different outcomes, indicating that there is no one best way.

Contact: Dr Sven Hauff, Department of Business Administration, University of Hamburg,

Von-Melle-Park 5, Hamburg 20146, Germany. Email: sven.hauff@uni-hamburg.de

Keywords: HRM systems; HRM strategy; control HRM systems; commitment HRM systems

INTRODUCTION

HRM practices are usually not used in isolation. Accordingly, research in strategic HRM

focuses on the analysis of bundles or systems of HRM practices and their effects on

HRM outcomes and firm performance (Jiang et al., 2012; Jackson et al., 2014). In this

context, the distinction between control and commitment HRM systems can be seen as the most

prominent and still crucial distinction in many HRM systems approaches (e.g. Walton, 1985;

Osterman, 1987; Begin, 1991; Arthur, 1992, 1994; Lepak and Snell, 1999, 2002; Verburg et al.,

2007; Toh et al., 2008).

Control HRM systems are often seen as a traditional HRM approach that are supposed to

be inappropriate in a modern economic environment (Walton, 1985; Kaufman, 2013; Waldman,

2013). Instead, some authors assume that high-commitment HRM systems are universally valid

best practices that effect competitive advantages positively (Delery and Doty, 1996;

Martín-Alcázar et al., 2005). However, within the contingency perspective of strategic HRM,

authors have argued that an HRM system’s effectiveness depends on an organisation’s external

and internal context, including industry specifics, labour market conditions, size, life cycle or

business strategy (Jackson and Schuler, 1995; Jackson et al., 2014).

Context dependency does not only refer to the HRM system per se, but also to the question

which components of HRM systems are adequate in certain contexts (Boxall and Macky, 2009).

For example, Baron and Kreps (1999: 195) state that ‘there is no single blueprint for a

high-commitment HR system; organizations will pick and choose [. . .] high-commitment HR

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doi: 10.1111/1748-8583.12054

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 24 NO 4, 2014424

© 2014 John Wiley & Sons Ltd.

Please cite this article in press as: Hauff, S., Alewell, D. and Hansen, N.K. (2014) ‘HRM systems between control and commitment: occurrence,

characteristics and effects on HRM outcomes and firm performance’. Human Resource Management Journal 24: 4, 424–441.

practices, according to their own needs, circumstances, and desires’. Beer et al. (1984) also

indicate that organisations might use a mixture of different HRM approaches. Thus, the

existence of hybrid systems is to be expected, as a mixture between control and commitment

practices may be favourable in some contexts (Su and Wright, 2012).

Following these ideas, we analyse the empirical diffusion and determinants of control and

commitment HRM systems in Germany as well as their impact on HRM outcomes and firm

performance. Our study contributes to the literature in several ways: first, by applying latent

class analysis (LCA) (e.g. Lazarsfeld and Henry, 1968), we use an advanced clustering procedure

that allows us to empirically identify distinct HRM systems on the control–commitment

continuum. Because the approach is open to any possible combination of control and

commitment HRM practices, it provides a more nuanced picture of existent HRM systems.

Second, we demonstrate the empirical diffusion of control and commitment systems in a

leading European economy, something still lacking in the literature. Third, we also shed light

on the determinants of different HRM system types. Thus, we address the rather neglected

question of why and where different HRM systems are used (Jackson et al., 2014). Finally, we

compare the outcomes of distinct HRM systems adding evidence to the yet unresolved question

which combinations of HRM practices have the greater impact on HRM outcomes and firm

performance (Guest, 2011).

THEORETICAL BACKGROUND

Control and commitment HRM systems

Research on HRM systems has been thriving for some time (e.g. Lepak et al., 2006; Guest, 2011;

Alewell and Hansen, 2012; Jackson et al., 2014). The basic idea in this research is that consistent

or complementary bundles of HRM practices may have large effects on the achievement of

HRM objectives and firms’ economic performance, while changes in single HRM activities or

the implementation of inconsistent HRM instruments, policies and practices have little, no

positive or even negative effects on these goals (Jiang et al., 2012).

Authors from different disciplines have presented distinct typologies of HRM systems (for

a comprehensive review, see Kaufman, 2013). A long-standing tradition can be found in

industrial relations research, where different forms of workforce management are mostly

discussed under the heading of ‘employment systems’ (e.g. Kerr, 1954; Osterman, 1987; Begin,

1991; Arthur, 1992, 1994). Labour process literature also distinguishes between different models

of labour control (e.g. Edwards, 1979). More recently, the idea of HRM systems has found its

way into management research (e.g. Beer et al., 1984; Walton, 1985; Delery and Doty, 1996; Lepak

and Snell, 1999, 2002; Verburg etal., 2007; Toh et al., 2008).

In an early review, Dyer and Reeves (1995: 658) pointed out that these typologies tend to

‘array in reasonably comparable continua from, in the authors’ terms, ‘Traditional’, ‘Control’

and ‘Mass Production’ strategies on one end to ‘Innovative’, ‘Commitment’ and ‘Flexible (or

Lean) Production’ strategies on the other’. In the meantime, there has been considerable

progress in the theory of HRM systems (e.g. Guest, 2011; Jackson et al., 2014), and several

typologies have been presented. However, the dichotomy between control HRM systems and

commitment HRM systems still represents a major distinction in these approaches (Bae and

Lawler, 2000; Lepak et al., 2006; Verburg et al., 2007).

Even if there is still no agreement between researchers concerning the question which

specific HRM practices belong to control and commitment HRM systems, they can generally be

characterised as follows: the control HRM system roots in Taylor’s ‘scientific management’ and

seeks to ‘establish order, exercise control, and achieve efficiency in the application of the work

Sven Hauff, Dorothea Alewell and Nina Katrin Hansen

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 24 NO 4, 2014 425

© 2014 John Wiley & Sons Ltd.