Tuesday, December 2, 2014

Will the Real HRM Please Stand Up, or the Problem with Hard Unitarism

Think of what would make for a lousy job. Low wages, long hours, little autonomy, autocratic managers. Scholars call this a low-road or hard human resource management (HRM) approach. But is low-road HRM really HRM? In a practical sense, yes it is--it’s certainly one way for managing human resources, so in a definitional way, it's a form of HRM. But intellectually, I think it’s better to reject low-road HRM as HRM so that we can better appreciate the differing assumptions and implications of varied approaches to managing people. For practice-oriented readers, think of this as an opportunity to think about what HRM really means. For scholarly readers, this allows us to see the hard unitarism frame of reference as the oxymoron that I assert it is.

The British industrial sociologist Alan Fox is widely-credited with first identifying the unitarist and pluralist frames of reference in industrial relations, and then adding a third, radical frame. In my own work, I’ve added a fourth: an individualistic, egoist frame that focuses on individual self-interest. In the forthcoming Finding a Voice at Work? New Perspectives on Employment Relations (Oxford University Press), edited by two UK employment relations scholars, Stewart Johnstone and Peter Ackers, I was pleased to see Bruce Kaufman use my four frames of reference. But two chapters continue to use Fox’s three-dimensional framework.

I think this is problematic because both low-road and high-road HRM strategies are forced into the unitarist frame of reference. This is done by distinguishing between hard and soft unitarism. In the words of Johnstone and Ackers (p. 2),

Old fashioned ‘hard’ unitarists assume that...the best approach is for management to command and control the organization. Work rules and strong management are believed to be needed to ensure workers perform as required.

To me, this contradicts the central premise of unitarism that the employment relationship is largely characterized by a unity of shared interests among employers and employees. That is, if workers need to be aggressively controlled and commanded, then there isn't a set of shared of interests. Unilateralism is not unitarism. Admittedly, unitarism can have an element of unilateralism because human resource management is often determined with little employee input. But unitarist human resources practices are designed with the objective of benefitting employees and their organization through high-commitment policies that create win-win interest alignment. A low-road employer that unilaterally slashes wages or benefits simply because it can is exercising a very different kind of unilateralism—a kind that I don’t think warrants the label “unitarism.” Indeed, a command-and-control management strategy is probably better seen as emerging from a radical frame of reference in that this employment relationship is highly conflictual and rooted in hierarchical power differentials.

A second description of hard unitarism in Finding a Voice at Work? is seemingly more congruent with my requirement that unitarism involve shared interests:

There is a ‘hard unitarism’, which typically is grounded in economics and which is most fully developed in the ‘the new economics of personnel’. In this formulation it is the capacity of managers to offer financial incentives on both an immediate and a deferred basis that produces the congruence of interests between workers and employers” (Ed Heery, pp. 21-22).

But this, too, is problematic because financial incentives do not really produce a congruence of interests. Rather, incentives are designed to provide the worker with a self-interest to act in the interest of the employer. Indeed, the need for incentives in the first place comes from a belief that workers and organizations are each selfish and will act in their own self-interest. 

Admittedly, this is a subtle distinction, but ultimately this is a different way of thinking about the employment relationship than what underlies the high-road HRM model. So I think it is better replace Heery's version of hard unitarism with an individualistic frame of reference. I call this an egoist frame of reference in which the egoist employment relationship is rooted in the pursuit of individual self-interest by rational agents in economic markets. Employers and employees engage in voluntary, mutually-beneficial transactions to buy and sell units of productive labor based on the what the market will bear. If the organization’s HRM policies are not in the worker’s self-interest, she will quit.

The need for this frame of reference is reinforced by the confusion that can come from mistakenly equating unitarism to neoliberalism. Neoliberalism embraces laissez-faire economic policies and the operation of so-called free markets. So forms of human resource management that emphasize adherence to markets, such as imposing wage cuts when unemployment is high, are consistent with neoliberalism. But they are not rooted in unitarism. So maybe there should be hard egoism (emphasizing markets) and soft egoism (emphasizing incentives), but not not hard unitarism.

This might seem like an esoteric academic debate, but I think it gets to the heart of how we want to define HRM. We can certainly define it as any strategy for managing people. But I think it’s better to distinguish among the key principles that underlie these strategies. In this way, hard unitarism is a problematic oxymoron and low-road HRM is self-interested unilaterism, not true HRM that seeks alignment of shared interests (which has its own problems, but that's a story for another day).

50 comments:

  1. Being a retired member of the US Navy, I have seen the changes in HR techniques over the past twenty years. The Navy's "product" is unique in that we did not have a solid hand's on product, but a national security sense. The institute's management technique are much more flexible in that there was not product to realize, but a well rounded "sailor". I'm curious on what an analysis would be like on the US Navy of today in respects to this article.
    -Randall

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  2. Very interesting blog.Never thought about HRM in this way. Would really like to know more about this Egoist employment relationship.With so many start ups coming up these days, it would be interesting to see the application of this HRM approach.

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  3. I agree with the WIIFM/individualist, egoist frame for employer and ee...I've applied similar frame in HRM pending on situation and has helped drive a variety of hr strategies.

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  4. Very interesting blog.Never thought about HRM in this way. Would really like to know more about this Egoist employment relationship.With so many start ups coming up these days, it would be interesting to see the application of HRM approach.

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  5. First of all, I introduce myself. I am from Congo Kinshasa GOMA city. The blog is very crucial to learners and RH Managers.

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  6. Low road HRM wants to disguise itself as ‘Unitarist approach’ calling it ‘hard unitarism’! Assuming organization knows more about what's good for individual worker than the worker himself itself is problematic. I wish people assuming managerial positions in newly developed organizations had better knowledge about HRM, especially in start-ups. Thanks for the frame of references.

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    1. You rephrased that in an amazing simple way!

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  7. It's a helpfully blog that demonstrates HR Management is very important. I learned about strategies to factors, external or organizational, that influence HR Management.

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  8. I thought Brazilian HR policies were updated but I think this view of High Road HRM is something that I've been practising for many years building relation based in confidence, turning the HR Dept in a connection between people's convictions and organization beliefs. When we are able to connect people's dreams with the core values of organization you can build a great HR. That's what has worked for me. Show to the people that thy can build their dreams of they create long term relations of their employees so that they can grow together.

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    1. I agree with the idea that people tend to grow and develop together when they work collectively towards a goal for some time. Not only do they get on the same page, but they begin to resonate with each other as well as their goals as an organization.
      -Emily

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  9. I think private organizations and as well as non profit organizations will always have a tendency to act on their own interest to satisfy their goals and objectives, putting aside benefits to employees or the mare fact of providing a livable income to them. However, local, state, and federal laws provide guidelines to push for a middle ground pertaining attempting to unify the interests of employees and employers, plus unions which seek to influence organizations as well in favor of employees. This has been, is, and will be a constant battle ground.

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  10. This comment has been removed by the author.

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  11. I think private organizations and as well as non profit organizations will always have a tendency to act on their own interest to satisfy their goals and objectives, putting aside benefits to employees or the mare fact of providing a livable income to them. However, local, state, and federal laws provide guidelines to push for a middle ground pertaining attempting to unify the interests of employees and employers, plus unions which seek to influence organizations as well in favor of employees. This has been, is, and will be a constant battle.

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  12. Thank you Professor J. Budd for this very thought provoking educative piece. Now I understand how unitarist HRM perspective of the High road HR strategy can be put into practice - through the identical egoist employment relationship approach of offering incentives to workers to earn their commitment. I understand that incentives do not actually bring about congruence of interests but rather self interest of the worker to act in the organisation's interest. But now, how do you achieve this actual congruence of interest? I would really appreciate knowing how.

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  13. Thank you Prof. Budd for your insightful portrayal of theory and specific circumstances. As we know, each organization is so very unique, however, you have given me the tools of perspective and looking at each situation through an entirely different lens, even if it does create some inner conflict.

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  14. Thank you Prof. Budd for your insightful portrayal of theory and specific circumstances. As we know, each organization is so very unique, however, you have given me the tools of perspective and looking at each situation through an entirely different lens, even if it does create some inner conflict.

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  15. My name is Sopheak Ke. Thank you Professor John Budd, your videos and instructions are very good and impressive that I lack but now I have been refilled by your course. I hope the lessons on week#2, 3 and 4 will be more impressive and can be help for me fit my workplace in the future as HR manager. Thank again.

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  16. Really good discussion. Unitarism and Pluralism concepts as applied in this HR sense come out quite clearly.

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  17. Thank you Professor I really enjoy learning

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  18. Thank you Professor. I'm well informed.

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  19. It is a contribution from Prof. Budd to add a fourth radical frame to the Unitarianism and pluralist frames of reference in industrial relations: an individualistic, egoist frame that focuses on individual self-interest.
    In fact I'am thinking about adding a fifth radical frame: A Collectivism:
    Collectivism (Team Player) -- The idea that the individual’s life belongs not to him but to the group or society of which he is merely a part, that he has no rights, and that he must sacrifice his values and goals for the group’s “greater good”. According to collectivism, the group or society is the basic unit of moral concern, and the individual is of value only insofar as he serves the group.

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  20. Great discussion. Unitarianism and Pluralism concepts as applied in this HR article come out quite clear. I really appreciate how you explained each concept. I have been introduced to these concepts before.

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  21. This help to gain knowlege and understand the structure!

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  22. Wonderful course...I am really impressed with my experience

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  23. Wonderful course...I am really impressed with my experience

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  24. Great and Easy to understand i appreciate your work Prof.
    IT'LL help Me alot in future. Thanks Again

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  25. these are hard facts and need to be acted upon.

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  26. I've seen low road and high road approaches in person but this is the first time I've tried to categorize and generalize them. Great blog - basically we need a frame of reference to learn but it's hardly perfect.

    "...hard unitarism is a problematic oxymoron and low-road HRM is self-interested unilaterism, not true HRM that seeks alignment of shared interests..."

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  27. Employers use incentives to promote a particular behavior or performance that they believe is necessary for the organization’s success. For example, a software company provides employee lunches on Fridays to promote teamwork across departments and functional areas.

    The lunches are also an excellent opportunity to brief employees on company progress outside of their assigned areas.

    They also use the lunches to provide necessary information to employees or for employees to present to their coworkers on hobbies and interests—all of which contribute to staff members knowing each other better.

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  28. This course is great, every time I understand more about my organization and why its actions in the management of human talent.

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  29. Thanks for the insight. I have better understanding of what HRM is suppose to be.

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  30. It seems to me that it will also depend on whether goods and services or products are produced, since globalization and the extreme fixation of cost reduction go a long way in the strategy of Human Resources, I think the article is very illustrative

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  31. Human resource has good characteristic that make it unique but if believe human being are the difficult set of people to lead,some are really ready to obey instruction and work towards a particular objective while other restricted to same instruction although the low and high HR play a good key role in managing HR.
    Thank you.

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  32. Thank you professor. I now have a better understanding of HR with this article

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  33. Managerial and human resource are key role in company baseline.both play different role in business development but has to deal with leading and skill empowerment of employees according to human resource management styles
    The lecture of prof. Budd as impact fresh designed of business world and open how organizational objective can be achieved through the power of HRM.

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  34. Thank you Professor. I now have better understanding of HR with this article

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  35. I believe that it is important for HR people to discuss or to take thought of HRM like this blog. However, we may think too much about HRM. Because the company goal is to get financial profit, to make good products, to provide excellent services and to make the employees happy.

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  36. Thank you so much Pro. Now I have got some understanding about HR role. Your article very useful for me.

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  37. This further emphasises the complexity of HRM practices and the very different schools of thought that drive them...Ideas really do matter. So insightful, thank you Prof. Budd.

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  38. Very insightful. HRM holds the hard task of having to make everyone happy. Today, organizations and HR understand there is a tricky balance between workplace happiness and the bottom line. An organization, from a business standpoint must earn profits through the work of their employees. However, it's proven, quality employees will seek employment elsewhere if High Road HR isn't implemented. What gets even trickier is HR is often determined by market. So, if the market declines, should we then treat employees badly, in line with the market? Or do organizations still maintain their moral and social standards to the community? Is everything always a 'bottom line business'? I prefer to work for and manage by a High Road HR strategy at all times. The market will always fluctuate. Morals should never change!

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  39. Wanting to be an HR practitioner and even managing some employees,one can not do away with this blog. I am now getting why organizations do things the way they does.

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  40. Exceedingly insightful ,blog, I totally agree with the evolution of hard unitarism or low road HRM He which is now most obsolete to the soft unitarism or high road HRM which yields more result

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  41. Excellent and insightful. I would like to grasp the fourth frame "egoist" better. From what I understand - egoist appears to drill down to the nuts and bolts of the middle ground between employer and employee. It resembles an agreed quid pro quo, where each party will benefit. This is also determined on the trade offs. In todays market egoist frame exists. It is an upfront negotiation vs. unitarism with a question mark.

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  42. This was excellent and super insightful. Being apart of the same company over the last 4 years, but having the opportunity to grow and see how different departments and separate HR units within the same large company has been interesting. This reading really highlights this and dives deeper into the fact that there is no one perfect HR strategy, but rather the importance of continuous education and studies into the ever changing world and how HR plays a role throughout each individual business org.
    -Alberto

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  43. This is really good and understandable! I am a geologist, but I found myself working as a Human Resources Officer. To be honest, I have really learnt a lot! Good to know more about the HR strategy and the managerial style. Good work Professor John Budd!

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  44. I definitely emphasize with this soft egoism style, especially when it seeing the employment relationship as mutually beneficial and incentivized to both employer and employee, and not just from a monetary perspective. A factor that doesn't get discussed enough, unfortunately, is when employers do not pass on more of the fruits of employee labors to the individual laborers. Not only does this relate to economical concerns (stockholders making more off speculation than employees off of labor, disproportionately high CEO salaries/bonuses, etc.), but also to social and personal issues (acknowledging laborers as well as CEOs in media and training, getting management and laborers involved in community outreach, etc.). A lot of this, in my opinion, seems to derive from budgeting. A limited budget is important to all organizations, but how a company divides that budget needs to be integrated with HRM in order for both employees and employers to feel the true benefits of soft egoism (if I'm getting my terms right).

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  45. Being new to all of this and currently stuck somewhere between working with my employer and for my employer the statement that stuck with me the most was:

    "The need for incentives in the first place comes from a belief that workers and organizations are each selfish and will act in their own self-interest."


    This sentence is profound to me. Firstly because I have never really looked at incentives in this way, and secondly because I believe the statement to be true. My question is though, does it matter? Very thought provoking. I know that's not the takeaway but it's where I got stuck. I will reread this again and again as I advance through my course to make sure that eventually I can take every bit of meaning from it. Thank you Professor Budd.

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  46. Very interesting piece, Employees and HR are supposed to come to an agreement where by each of them are fulfilled.

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