A Model of Human Resources Management Effectiveness

Organizations in the industrialized nations are going through one of the toughest periods in memory. Economic recession, a decline in employment opportunities, and an increasing demand from all stakeholders to do more with less have placed severe strains upon resources. From every quarter the watchword is effectiveness, and it is argued that an organization that is not striving to be effective faces demise. In this paper we argue that human resources management (HRM) plays an important role in such effectiveness, if it is designed to do so. After a review of the literature on HRM and organization effectiveness, we present a model of HRM effectiveness, propose some methods for measuring the concept, and suggest a number of implications for HRM and the organization. In the final section of the paper, we recommend actions for the HRM practitioner that follow from the model. The Nature of Organizational Effectiveness Despite the attention afforded it, organizational effectiveness is not easily defined. Indeed, as Cameron and Whetton (1983) suggest, it may be necessary to have multiple models of organizational effectiveness, because the conception of effectiveness depends on how the organization is viewed. For example, organizations may be seen as rational goal-seeking bodies, or they may be viewed as political battlegrounds of competing interest groups. In the first instance, effectiveness is judged in terms of rational objectives achieved; in the second, effectiveness may well be viewed in terms of the achievement of one group's political objectives at the expense of another's. Given this complexity, it may be more worthwhile to develop frameworks for assessing effectiveness than unidimensional theories of effectiveness. For example, Steers (1977) suggests three different perspectives to guide research on organizational effectiveness: Goal optimization, in which success is essentially how well the organization achieves what it sets out to achieve; the systems perspective, in which success is defined in terms of how the organization adapts to its environment; and a behavioural perspective, in which the emphasis is on the role of employee behaviour in long-term organizational effectiveness. Using three perspectives, it could be argued that an effective organization is one in which the behaviour of employees contributes towards the attainment of organizational goals and enables the long-term adaptation of that organization to its environment. Steers (1977) goes on to argue that an analysis of organizational effectiveness will likely focus on four domains of effectiveness, irrespective of whether the perspective is on goal optimization, the organization system, or employee behaviour. These domains are: organizational characteristics, environmental characteristics, employee characteristics, and managerial policies and practices. Given our interest in the role of human resources management, our particular concern will be with the employee and managerial components of effectiveness-what Snell (1992) refers to as the behavioural perspective within strategic human resources management. HRM and Organizational Effectiveness The arguments above indicate that the behaviour of employees and managers is an essential part of organizational effectiveness. This is reinforced by the research of Bartlett and Ghoshal (1990) on the organizational adoption of multi-dimensional structures. They concluded that successful companies were those that focused less on the quest for an ideal structure and more on developing the abilities, behaviour, and performance of individual managers. If people and their management are so important to organizational effectiveness, it should follow that the management function specifically intended to manage people in the organization, i.e., the human resources management function, should play a central role in achieving such effectiveness. Despite what is now recognized to be a close link between HRM effectiveness and organizational effectiveness, in the past there almost appeared to be "two solitudes" between the literature on organization effectiveness and strategy and the literature on HRM and its effectiveness. …