Understanding how HR systems work: the role of HR philosophy and HR processes

• Author: Gráinne Kelly,Edel Conway,Enda Hannon,Patrick Flood,Kathy Monks,Katie Truss
• DOI: http://doi.org/10.1111/j.1748-8583.2012.00207.x
• Date: 01 November 2013
• Published date: 01 November 2013

Understanding how HR systems work: the role of

HR philosophy and HR processes

Kathy Monks,Gráinne Kelly,Edel Conway and Patrick Flood, Leadership,

Innovation and Knowledge Research Centre, Dublin City University

Katie Truss, Kent Business School, University of Kent

Enda Hannon, Kingston Business School, Kingston University

Human Resource Management Journal, Vol 23, no 4, 2013, pages 379–395

Despite the proliferation of studies of HR systems, there are still substantial gaps in our understanding

of how such systems actually work. This article, by focusing on the neglected areas of HR philosophy

and HR processes in the composition of HR systems, and by using a qualitative, employee-centred

approach in the collection and analysis of data, provides new insights into the working of HR systems.

Using data from interviews with 56 knowledge workers employed in the information and

communications technology sector in Ireland and the UK, we explore employee-level reactions to two

different types of HR systems. We highlight the various ways in which HR processes interact with HR

practices and the different outcomes that may result, and we identify the key role of HR philosophy in

HR system operation.

Contact: Kathy Monks, Leadership, Innovation and Knowledge Research Centre, Dublin City

University, Dublin 9, Ireland. Email: kathy.monks@dcu.iehrmj_207379..395

INTRODUCTION

While there is now a great deal known about the nature of HR systems, there are still

gaps in our understanding of how such systems actually work (Becker and Gerhart,

1996; Chadwick, 2010; Boxall et al., 2011; Jiang et al., 2012). Such gaps are perhaps not

surprising. Much of the HR system research to date has been based on firm-level quantitative

approaches that focus on HR practices (Boselie et al., 2005; Guest, 2011) rather than other aspects

of the HR system. In order to extend understanding of how HR systems work, we follow

Bowen and Ostroff (2004) in concentrating on process: ‘the features of an HR system that send

signals to employees that allow them to understand the desired and appropriate responses and

form a collective sense of what is expected’ (p. 204).

In our attention to process, we first of all examine features of the HR system that have

been identified as neglected in research to date, notably HR philosophy (Lepak and Snell,

2002; Lepak et al., 2007) and HR processes (Boxall and Macky, 2009). Second, we focus on the

ways in which employees interact with and interpret different types of HR systems. In

concentrating on employee attitudes and behaviours, we are brought to the ‘realm of the

black box’, and encounter the ‘murky chain of links between HR goals and performance

outcomes’ (Boxall et al., 2011: 1508). Using qualitative data from interviews with 56

knowledge workers employed in the information and communications technology (ICT)

sector in Ireland and the UK, we explore employee-level reactions to two different types

of HR systems: commitment-based and productivity-based (Lepak and Snell, 2002), thus

encompassing both ‘high’ and ‘low’ road approaches to the management of human resources

(Osterman, 1995; Orlitzky and Frenkel, 2005). Our choice of qualitative research enabled us

to address ‘“how” questions – rather than “how many”’ – and proved invaluable in

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doi: 10.1111/j.1748-8583.2012.00207.x

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 23 NO 4, 2013 379

© 2012 John Wiley & Sons Ltd.

Please cite this article in press as: Monks, K., Kelly, G., Conway, E., Flood, P., Truss,K. and Hannon, E. (2013) ‘Understanding how HR systems work:

the role of HR philosophy and HR processes’. Human Resource Management Journal 23: 4, 379–395.

‘understanding the world from the perspective of those studied (i.e. informants); and for

examining and articulating processes’ (Pratt, 2009: 856).

The article begins by unpacking the components of HR systems before describing the

research methodology and the findings. We discuss our findings in the light of the insights we

obtain into how HR systems work before considering the implications for practice.

THE COMPONENTS OF HR SYSTEMS

There are difficulties in finding an agreed definition of the concept of HR systems with research

studies indicating variations in both their composition as well as with the internal relationships

among their components (Chadwick, 2010; Jiang et al., 2012). There is general acceptance that

HR systems comprise a number of different levels (Becker and Gerhart, 1996; Boxall and Macky,

2009; Jiang et al., 2012); that, at a minimum, they consist of HR policies, practices and processes

(Schuler, 1992; Monks and McMackin, 2001; Kepes and Delery, 2007); and that they can be

linked to outcomes at employee and organisational levels (Nishii et al., 2008; Boxall et al., 2011).

Theoretical work on the ‘strength’ of the HR system (Bowen and Ostroff, 2004) suggests that

this ‘strength’ is a ‘linking mechanism that builds shared, collective perceptions, attitudes and

behaviours among employees’ (Bowen and Ostroff, 2004: 206). There are, though, suggestions

that the definition of the construct of HR systems is incomplete (Boselie et al., 2005; Chadwick,

2010), and we therefore consider, in particular, features that have been identified as neglected

to date, notably HR philosophy and HR processes (Becker and Gerhart, 1996; Lepak and Snell,

2002; Lepak et al., 2007; Boxall and Macky, 2009).

HR philosophy

HRM system philosophies have been described as ‘the guiding principles that identify and

characterise the value and treatment of employees covered within a particular HRM system’

(Kepes and Delery, 2007: 390). This notion of ‘guiding principles’ echoes Becker and Gerhart

(1996: 786), who point out that it is at this level within the HR system that effects are

‘generalizable or universal’. Schuler (1992: 21) is more emphatic in his definition, suggesting

that an HR philosophy is ‘a statement of how the organisation regards its human resources,

what role the resources play in the overall success of the business and how they are to be

treated and managed’. The impact of HR philosophy is confirmed by Godard and Delaney

(2000) who found that the value placed on human capital by those in decision-making

positions within organisations will affect the types of HR systems that are chosen and how

they are used. Boxall and Macky (2009: 7) take the importance of the role of HR philosophy

in HR system design a stage further by suggesting that ‘we get closer to describing HR

systems in meaningful terms when we identify the principal themes that underpin them: in

other words, when we describe the major philosophies that management is trying to pursue’.

Lepak et al. (2007: 241), from their research in 402 establishments in the US, revealed the

importance of HR philosophy in determining how high investment human resource (HIHR)

systems were fashioned for both core and support employees. However, they also point out

that HR philosophy has not ‘occupied a dominant focus within previous HRM studies’ and

suggest that there is a need for more research that examines its role as a ‘contextual variable

that might influence the HIHR performance relationship’ (p. 241). Similarly, Lepak and Snell

(2002), from a firm-level study in the US, suggest a need for research to examine the role of

firm-level HR philosophy to better understand how workers in different employment modes

are managed.

HR systems

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© 2012 John Wiley & Sons Ltd.