Modern human resource management emerged from the husk of traditional personnel management in the 1980s. Whereas personnel management had been concerned with the efficient administration of people-related issues in organisations, modern human resource management goes much further in embracing the management of change, job design, socialisation and appraisal as the key levers to achieve organisational success. Guest (1987) set the agenda for what modern human resource management is trying to achieve - integration with the business strategy of the organisation, employee commitment, flexibility and quality. These are still very much the aims of human resource management. Identifying commitment as a major element of human resource management Storey (1995, p. 5) devised what is still regarded as one of the best original definitions of human resource management:
Human resource management is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce using an array of cultural, structural and personnel techniques.
The central theme in research in human resource management since the mid 1990s has been the relationship of modern human resource management to organisational performance (Batt, 2006). In the mid 1990s the ground breaking work of Huselid and his colleagues showed that human resource management practices could be clearly linked to the financial and productivity performance of firms (Huselid, 1995; Huselid, Jackson and Schuler, 1997; Becker and Huselid, 1998). Huselid's work seemed to demonstrate that faith in good human resource management practices, which until this point had been driven by a vague belief that treating people well at work would improve the bottom line performance of organisations (Pfeffer, 1994), was well placed and that a direct quantitative relationship existed between the implementation of advanced human resource management practices and the hard financial measures of organisational performance preferred by senior managers and Boards of Directors.
In more recent years, the work on the links between human resource management and organisational performance has been supplemented by research showing that human resource management is also positively linked to the motivation and well-being of workers in organisations. Guest has shown that workers approve of the practices implied by the term human resource management and that the use of human resource management has led to the development of positive psychological contracts between workers and managers in organisations (Guest, 1999, 2002). This work seems to show that far from exploiting workers, as some critics have argued, the use of human resource management creates high levels of job satisfaction and motivation amongst workers, helping to explain the mechanism for the positive relationship between human resource management and organisational performance documented by Huselid and others.1 This work has not gone uncontested, however. Critics of the research on human resource management and firm performance have argued persuasively that the definitions of human resource management that have been used vary widely between different studies and that the research methodologies often exhibit significant flaws (Boselie, Dietz and Boon, 2005; Marchington and ...