Strategic human resource management Information 2022

Please develop a table of at least 25 articles Citation Research objectives Methodology Findings Conclusion/Future research Find answers to these questions 1- what are the important infrastructure needed in a company and a country to make e-commerce work 2- success factors for e-commerce adoption 3- e-commerce in airlines 4- code sharing 5- competiteve advantage 6- the personalization through e- commerce all those related chapter 2

Strategic human resource management, human
capital and competitive advantage: is the field
going in circles?
John E. Delery and Dorothea Roumpi, Department of Management, Sam M. Walton
College of Business, University of Arkansas
Human Resource Management Journal, Vol 27, no 1, 2017, pages 1–21
The resource-based view (RBV) ofthe firm has been consistently used as a backdrop in strategic hum
resource management (SHRM) research and has the potential to bridge the ‘micro–macro’ divi
between the SHRM and the strategic human capital literature, however, signifies that RBV has
potential.In this paper,we begin with a briefreview ofthe conceptuallogic linking human resource
management (HRM) practices and firm outcomes that aim at highlighting the different treatme
the SHRM and strategic human capital literatures. We then propose a conceptual model that s
HRM practices are not simple levers that enable firms to create sustainable competitive advan
of the strategic human capitalresearch postulates.On the contrary,we argue thatHRM practices can
contribute to a firm’s sustainable competitive advantage not only by enhancing employees’ ab
motivation and opportunities, but also by shaping supply-side and demand-side mobility const
Contact:John E. Delery,Departmentof Management,Sam M. Walton College ofBusiness,
University of Arkansas, Fayetteville, AR 72701, USA. Email: [e-mail]
Keywords: strategicHRM; human resourcestrategy;human capitaltheory;organisational
performance; resource-based view
INTRODUCTION
The resource-based view (RBV)(Penrose,1959;Wernerfelt,1984;Barney,1991)
arguably constitutesone of the most popular theoreticalframeworksin the
management literature.RBV, suggesting that sustainable competitive advantage can
be achieved through valuable,rare,imperfectly imitable and non-substitutable resources
(Barney,1991),is especially appealing forboth human resourcemanagement(HRM),
particularly strategic human resource management(SHRM) and strategy scholars.Thus,
RBV has the potentialto narrow the micro–macro divide (e.g.Wright et al.,2001;Nyberg
and Wright,2015).The extent to which RBV has managed to bridge this gap is,however,
questionable.
On the one hand, SHRM scholars argue that HRM practices can be a source of sustainab
competitive advantage (e.g.Pfeffer,1994;Beckerand Gerhart,1996;Boxall,1996).HRM
practices, when viewed as systems of ‘interrelated and internally consistent’ practices (Ma
1995: 198), can be unique, causally ambiguous, synergistic and difficult to imitate (Lado a
Wilson, 1994).In line with these conceptualargumentsand despite some substantive
(Kaufman,2010)and methodologicalconcerns (Cappelliand Neumark,2001),the SHRM
research has provided compelling evidence for the relationship between HRM practices an
various firm-leveloutcomes (e.g.Arthur, 1994;Huselid,1995;MacDuffie,1995;Delery and
Doty, 1996; Ichniowski et al., 1997; Delery, 1998; Boselie et al., 2001; Combs et al., 2006)
HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 27, NO 1, 2017 1
© 2017 John Wiley & Sons Ltd
Please cite this article in press as: Delery, J.E. and Roumpi, D. (2017) ‘Strategic human resource management, human capital and competitive advantage
is the field going in circles?’. Human Resource Management Journal27: 1, 1–21
doi: 10.1111/1748-8583.12137
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On the other hand, advocates of the ‘human capital advantage’ (Boxall, 1998) postulate th
‘it is virtually impossible for HR practices to be rare, inimitable and non-substitutable’ (Wrigh
et al., 1994: 318). Others contend that the evidence for the impact of HRM practice on workf
behaviours and skills is inadequate.For instance,Wright et al.argue that even though RBV
constitutes an appealing underlying rationale for the SHRM literature,‘as yet no study has
demonstrated anything close to a full causal model through which HR practices are purporte
to impact firm performance’ (2001: 709). Thus, HRM practices are treated in most of the hum
capital literature, at best, as simple ‘levers’ in the relationship between human capital resou
and sustainable competitive advantage.
With the tension between the SHRM and human capital camps in mind,the purpose of
this paper is twofold.We begin with a brief review of the conceptuallogic linking HRM
practices and firm outcomes. The intent is not to present a comprehensive review but rather
to emphasise some of the major perspectives over the past three decades regarding what ha
been termed as the HRM practices-firm outcomes ‘black box’(Becker and Gerhart,1996;
Guest,1997;Wright and Gardner,2003;Wall and Wood,2005).The ultimate goalof this
journey through the SHRM conceptual logic is to highlight the debate between SHRM and
strategichuman capitalresearch regarding the treatmentof RBV. Acknowledging the
strategic human capital literature has made important steps forward in theory development
by explicating the differences between basic concepts (e.g. human capital and human capita
resources)and offering complex modelsof human capitalresources(e.g.Ployhart and
Moliterno,2011;Brymer et al.,2014;Ployhart et al.,2014),we emphasise that the inability
to test these complex human capitalmodels,the broadermeasurementissues and the
imperfectionsof the labour market (e.g.Campbell et al., 2012b)constituteimportant
drawbacksin this research stream.We further argue that,given the criticality ofthe
management of human capital resources in creating and capturing value (e.g.Wright et al.,
1994; Sirmon et al., 2007; Wright and McMahan, 2011; Nyberg et al., 2014), the human capit
stream ofresearch brings us back to the importance ofHRM practices and systems in
generating and sustaining competitive advantage.
The second objective of this paper is to add to this ongoing debate between SHRM and
human capitalscholars by arguing thatHRM practices are notsimple levers thatenable
firms to generate sustainable competitive advantage.Drawing on Campbellet al. (2012b)
framework and the ability–motivation–opportunity (AMO) model(Appelbaum et al.,2000;
Purcelland Hutchinson,2007),we offer a conceptualmodel that sheds light on how high-
performance work practices(HPWPs) not only enhanceemployees’knowledge,skills,
abilitiesand other characteristics(KSAOs), and offer motivation and opportunitiesto
leverage these resources,but also contribute in shaping the supply-side and demand-side
mobility constraints thoughtto enable firms to generate competitive advantage through
these resources.Thus,we propose that firms can gain competitive advantage only through
the interplay between human capitalresources and HRM practices – each shaping and
bringing about the other.
REVIEW OF THE CONCEPTUAL LOGIC
This review of the conceptuallogic linking HRM practices and firm outcomes focuses on
identifying the major perspectives, namely, early SHRM, behavioural perspective, AMO and
RBV that have dominated the relevant literature. Even though we discuss these four rational
as distinct from one another and in a specific order,in reality,the evolution of the SHRM
SHRM and HC: is the field going in circles?
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conceptual logic is more complex: their boundaries are not always clear, their developmen
more simultaneous rather than sequential and they are complementary rather than conflic
Early strategic human resource management
During the late 1970s and early 1980s, the conceptual foundations of SHRM emerged.Dyer
(1984), Fombrun et al. (1984), Kochan et al. (1986) and Walker (1980) were among the pi
scholars who linked HRM and business strategy. For instance, Dyer (1984) presented a res
agenda thatexplicitly acknowledged the role ofbusiness strategy and HRM systems in
influencing firm outcomes. This early work triggered seminal empirical studies (e.g. Arthur
1992,1994;Huselid,1995;MacDuffie,1995;Delery and Doty,1996) that provided evidence
for the HRM–firm performance relationship. This work, however, led to questions regarding
the underlying logic of this relationship, shifting the attention to the mediating mechanism
of the HRM-performance ‘black box’ (Boxall and Purcell,2008).This ‘black box’ constitutes
the underlying driving force for the theoretical and empirical research that followed.
Behavioural perspective
One of the first efforts to describe the ‘black box’ of the HRM–performance relationship wa
behavioural perspective (e.g. Schuler and Jackson, 1987; Jackson et al., 1989). The behavi
perspective, grounded in contingency theory (Fisher, 1989), suggests employee behaviou
the mediating mechanism between the HRM practices and performance. HRM practices ar
viewed as a firm’s most direct means of eliciting and sustaining desired employee behavio
such as task-related behaviourand organisationalcitizenship behaviours(Coff and
Kryscynski, 2011).
The work of Schuler and Jackson (1987) pushed research beyond the universalistic appr
which suggests there are ‘best practices’that yield superior organisational outcomes across
situations (Delery and Doty, 1996). This research stream (e.g. Lengnick-Hall and Lengnick
1988; Gomez-Mejia and Balkin, 1992), on the contrary, adopts a contingency approach (De
and Doty,1996).This approach focuses on ‘external’ or ‘vertical’ fit (Baird and Meshoulam,
1988; Wright and McMahan, 1992) highlighting the importance of alignment between HRM
practices and the broader identity and characteristics of the firm, including its strategy (Bo
1992).As an attempt to explain how specific HRM activities can elicit strategically desired
employee behaviours, the AMO framework emerged.
Ability–motivation–opportunity model
Extending the behavioural approach and building on expectancy theory (Vroom, 1964; Law
1971), the AMO model (Appelbaum et al., 2000; Purcell and Hutchinson, 2007) evolved as
effort to better explicate how HRM practices elicit desired outcomes. This model proposes
the relationship between HRM practices and employee-leveland firm-leveloutcomes is
mediated by the direct effectthese practices have on employees’abilities,motivation and
opportunities.
An important contribution of the AMO model is that it emphasises the need to look beyo
vertical fit. The systems approach that emerged suggests that it is the appropriate combin
of different HRM practices rather than individual practices that can ensure the enhanceme
all three components of the AMO model and ultimately lead to high employee or workforce
performance. At the core of this rationale lies the concept of ‘internal’ or ‘horizontal’ fit (B
and Meshoulam,1988;Wright and McMahan,1992) highlighting the significance of fit and
interplay among HRM practices (Wright and McMahan, 1992; Delery, 1998; Boxall and Pur
John E. Delery and Dorothea Roumpi
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2000).This line of research does not necessarily disregard the importance of vertical fit but
usually adopts a configurational approach that emphasises the need for both horizontal and
vertical fit (Delery and Doty, 1996).
Along these lines, MacDuffie (1995)proposed the notion of ‘HRM bundles’ and
demonstrated empirically that systems of HRM practices can interact in complex ways to lea
to superior performance.Extending this concept, Becker et al. emphasised that firms should
avoid ‘deadly combinations’ [HRM practices that in isolation lead to beneficial firm outcomes
but when taken as a group are a ‘recipe for disaster’(1997:43)]and aim for ‘powerful
connections’ (HRM practices with synergies or complementarities). Ichniowski et al. (1997), i
a sample of steel finishing lines,used clusteranalysisto group HRM practices and
demonstrated thatplants using an ‘innovative’HRM system (including practices such as
flexible job assignments and incentive pay) were leading in terms of productivity and produc
quality. More recently, Delery and Gupta (2016) conducted a more direct examination of the
systems perspective.The authors,on the basis oftheory and comparing the results from
differentmethodologicalapproaches,found that ability-enhancing,motivation-enhancing
and opportunity-enhancing HRM practicesinteractin an intricate mannerto influence
organisational effectiveness. Thus, there seems to be strong support that AMO helps explain
establishment effectiveness. Given, however, that the ultimate goal of the SHRM literature is
to link HRM practices with firm-leveloutcomes,SHRM researchersturned to strategy
literature for conceptualrationales that would legitimise the macro-levelnature of SHRM.
RBV emerged as a conceptual approach that has the potential to support SHRM in its attemp
to bridge the micro–macro divide.
Resource-based view
Resource-based view (Penrose,1959;Wernerfelt,1984;Barney,1991) has been consistently
used, explicitly or implicitly, as a backdrop in SHRM and strategy research. However, RBV is
treated differently by HRM and strategy researchers (e.g.Nyberg and Wright,2015).Thus,
despite its potentialto narrow the gap between the micro and macro research,RBV has
triggered an ongoing debate:Are the HRM practices or the human capitalresources,the
resources that have the potential to generate sustainable competitive advantage?
According to the first line of RBV research, HRM activities, when appropriately designed an
implemented, have the potential to generate and maintain competitive advantage (Lado and
Wilson, 1994;Pfeffer,1994;Becker and Gerhart,1996).MacDuffie and Kochan (1995),for
instance,found thathigher investments in training were associated with higher levels of
productivity.Snell and Dean (1992)showed that firms investing in selectivestaffing,
performance appraisals for developmental purposes and intensive training are more likely to
successfully implement sophisticated new technological systems.Overall,it can be inferred
from the relevantliterature (e.g.Lado and Wilson,1994;Becker and Gerhart,1996)that
competitive advantage may emerge when HRM activities focus on developing firm-specific
skills (less transferable than generic skills), the HRM function invests in team building (team
outcomes are less imitable and transferable due to causal ambiguity and social complexity),
and HRM activities are combined in highly integrated and coherent bundles (harder to imitat
Drawing on Osterman’s (1987) differentiation of the workforce rationale,several authors
(e.g. Delery and Shaw, 2001; Becker et al., 2009) argued that firms should treat different gro
of their workforce with different sets of HRM practices. Lepak and Snell (1999) suggested tha
jobs can be differentiated on the basis of value and uniqueness and each of the emergent job
families should be treated with the corresponding employmentmode.It has also been
SHRM and HC: is the field going in circles?
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suggested that firms should pay particular attention to employees possessing core compe
or strategic capabilities, which are conceptualised as the resources leveraged to achieve s
objectives (Becker and Huselid, 2006), because the better management of the core workfo
more likely to have the greatest impact on the firm’s value creation (Delery and Shaw, 20
The second RBV-based stream ofliterature advocatesthat human capitalresources
constitute the main source of sustainable competitive advantage. Based on the argument
HRM practices can be replicated over time by competitors (Wright et al., 1994; Chadwick a
Dabu,2009),human capital resources,via their unique combinations (Ployhart et al.,2014),
have the potentialto generate sustainable competitive advantage (Nyberg et al.,2014).The
underlying assumption is that firm-specificity constrains the mobility of the valued human
capital (Williamson,1988;Hatch and Dyer,2004).Some scholars (Barney and Wright,1998;
Campbell et al., 2012b), however, have highlighted some concerns regarding this assump
In line with these concerns, Campbell et al. (2012b) attempted a more in-depth analysis
workings of the labour marketand the conditions under which human capitalleads to
competitive advantage. On the demand-side, the authors, in arguments consistent with Ba
and Wright (1998), suggest that generic human capital, under specific market conditions,
also generate competitive advantage. Given that employees usually possess both firm-spe
and general human capital (Lazear, 2009), viewing firm specificity as an effective demand
mobility constraint is a myopic approach because competitors might perceive as valuable
the focalfirm considers as generic (Campbellet al.,2012b).In addition,the labour market
information imperfections (Chiang and Chiang, 1990) might lead to undervaluing general o
overvaluing firm-specific human capital. On the supply-side, Campbell et al. (2012b) indica
two important imperfections. First, mobility costs go above and beyond search, bargaining
switching costs;idiosyncratic preferences (e.g.geographic preferences and non-pecuniary
rewards)and legalrestrictions are also included in the costs employees encounter when
switching employers. Second, employees, due to information asymmetries, are not always
to appropriately estimate their employability (value in the external labour market).
Another importantconcern aboutmuch of the human capitalliterature is the implicit
assumption that individualKSAOs are automatically translated into positive firm outcomes
(Barnes et al., 2016). Human capital only has the potential to generate sustainable compe
advantage – it has to be leveraged appropriately to do so (Wright and McMahan, 2011; Ny
et al., 2014). HRM practices can create and leverage human capital resources. As Wright e
noted, ‘sustained competitive advantage is achieved only by the interaction between the
capital pool and the HR practices’ (1994: 320). The human capital approach, consequently
us back to square one – the relationship between HRM practices and performance.
Following the calls for a more refined approach to the HRM-firm performance relationshi
in the next section, we explore a model that builds upon the AMO model and the framewo
Campbell et al. (2012b). The objective of this model is not to offer new ideas in exploring t
HRM practices–firm outcomes relationship,but rather to bridge the SHRM literature and
strategic human capitalresearch by emphasising the criticality ofHPWPs not only in
developing KSAOs,motivation and opportunities butalso in building supply-side and
demand-side mobility constraints for human capital resources.
HIGH-PERFORMANCE WORK PRACTICES, HUMAN CAPITAL AND SUSTAINABLE
COMPETIVE ADVANTAGE
As the journey through the conceptual logic of SHRM revealed, current research is divided
two streams: the ‘organisational processes advantage’ (stemming from superior organisat
John E. Delery and Dorothea Roumpi
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processes)and the ‘human capitaladvantage’(stemming from superiorhuman capital
resources)(Boxall,1998).Compelling arguments and evidence existfor both approaches.
Proponents of the ‘organisational processes advantage’ have provided evidence that HPWPs
may, when aligned with the overall strategy and targeted towards the core workforce, gener
the KSAOs, motivation and opportunity required for achieving superior firm outcomes (e.g.
Arthur, 1994; Huselid, 1995; MacDuffie, 1995; Delery and Doty, 1996). An important deficit o
this research, however, is the lack of consensus regarding which practices should be conside
as HPWPs (Combs et al., 2006; Kepes and Delery, 2007).
The human capital perspective, resting on the assertion that HPWPs can be replicated by
competitors over time (Wright et al., 1994; Chadwick and Dabu, 2009), suggests that the ker
of sustainable competitive advantage is the human capital resources. Human capital is not o
considered asthe source of sustainablecompetitiveadvantagesimply becauseof its
competencies but also because of its capacity to provide solutions to managerial dilemmas,
such as the recruitment of high-quality applicants (Coff and Kryscynski, 2011). In support of
the human capital advantage perspective, the meta-analysis of Crook et al. (2011) indicates
there is a positive relationship between human capitaland firm performance (the human
capital-global firm performance path coefficient was 0.10), which is stronger for firm-specific
human capital.
The weak positive relationship between human capital and firm performance along with th
concerns regarding the effectiveness of the human capitalisolating mechanisms (Campbell
et al., 2012b) make it questionable whether the human capital perspective is more informati
in explaining and predicting superior firm performance than the HPWPs perspective.In
addition, some of the arguments that human capital scholars have used seem to be inherent
flawed. For instance, if HPWPs were that easy to imitate and given the accumulating evidenc
regarding the relationship between specific HRM practices and firm performance, one would
expect that by now such practices would have been adopted by allfirms.However,HRM
practices are likely not as easily imitable as suggested. The complexity and the causal linkag
when looking at HRM practices as a system rather than isolated deployments make it harder
for competitors to successfully replicate them (Becker and Gerhart,1996;Lado and Wilson,
1994).Moreover,the argument that human capital resources are inimitable and less mobile
can also be questioned. Human capital is not an organisational ‘property’ (Coff, 1997; Castan
and Helfat, 2001; Ganco et al., 2015). Employees can leave their employers at any time takin
with them their valued human capital.Even when considering human capital resources as
the outcome of social complexity, they can still be transferred. There are numerous example
of firms poaching entire teams from their competitors (Bordwin,1999;Agarwal et al.,2016).
More importantly, the simple possession of high-quality human capital resources would not
necessarily yield superior outcomes. Human capital resources without the HRM practices tha
generate the appropriate levels of motivation and opportunities would be unable to lead to th
desired outcomes.
In concert with arguments suggesting that added value rests on the interaction between
individuals and their environment (Felin and Hesterly, 2007), we agree that a firm’s competit
advantage is contingenton the combination between HRM practices and human capital
resources. However, even though the complex human capital models that have been propos
(e.g. Ployhart et al., 2014) offer a compelling story, when giving applicable advice to manage
on how to create competitive advantage, assuming that firm leadership has free will to adop
different strategic and practices, it comes down to what is under their control: what can firm
leaders do in order to create sustainable competitive advantage? And the answer to this
SHRM and HC: is the field going in circles?
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question may be found in the adoption systems ofHRM practices appropriate for their
particular competitiveenvironment:it is the HRM practices that can influence the
characteristics of a firm’s human capital resources and determine the extent to which thes
resources will be effectively combined with other resources and ultimately used to achieve
the strategic goals of the firm. The role of HRM systems, however, does not end there. HR
systems are also key in turning competitive advantage into sustainable competitive advan
by influencing the workings of labour markets.
In the remainder of the paper, we briefly summarise the extant research regarding the e
of one such systems of HRM practices, HPWPs, on human capital characteristics (Figure 1)
then focus more extensively on the often neglected ability of firms to influence, to some e
the supply-side and demand-side mobility constraints forhuman capitalthrough HRM
practices(Figure 2). We employ Pfeffer’s(1998)parsimoniouslist of seven HPWPs
(employmentsecurity,selectivehiring, self-managed teamsor teamworking,high pay
contingent on performance, extensive training, reduction of status differences and informa
sharing) for illustrative purposes.
High-performance work practices and human capital characteristics
Despite the lack of consensus regarding the HRM practices that are or should be included
under the umbrella term HPWPs (Boselie et al.,2005;Kepes and Delery,2007),there is a
common thread across the different proposed sets of practices:they address the aspects of
the AMO model (Kehoe and Wright, 2013). In other words, HRM practices that combine as
HPWPs can be viewed as ability-enhancing or skill-enhancing,motivation-enhancing and
opportunity-enhancing orempowerment-enhancing (Huselid,1995;Combs et al., 2006;
Subramony, 2009).
First, HPWPs, such as extensive training, compensation, selective hiring and teamwork,
have an impact on the workforce’s ability (Subramony, 2009), which is conceptualised as t
employees’KSAOs (Delery and Shaw, 2001).By employing extensiveand thorough
recruitment and selection processes, firms are able to select highly valued human capital
through training firm-specific,and generic human capitalcan be enhanced (Arthur etal.,
2003; Takeuchi et al., 2007; Subramony, 2009). Less obvious but not less important are th
of pay and teamwork on the ability ofhuman capital.In terms of pay, a pay-for-skill
compensation system motivates employees to engage in activities that enhance their KSA
(Gomez-Mejia and Balkin, 1992; Youndt et al., 1996). Additionally, consistent with the sort
effectof pay (e.g.Cadsby etal., 2007),job candidates who believe they do notmeetthe
KSAOs-requirements are likely to self-select out of the process, enhancing the quality of th
applicant pool.Finally,when working in teams,employees develop social connections that
enable the exchange of ideas and perspectives and the correction of errors,which can be
considered as learning processes (Argyris and Schön,1978;Edmondson,1999) that enhance
employees’ability and the firm’s knowledge creation capability (Nahapietand Ghoshal,
1998; Smith et al., 2005).
The second aspect of the AMO model, namely, motivation, reflects the direction of the e
that the workforce exerts (Subramony,2009).On the basis of social exchange theory (Blau,
1964),when employees perceive that their contributions are valued,they are more likely to
reciprocate by engaging in valued behaviours.As such,high-compensation contingent on
performance, employment security and the adoption of self-managed teams can be argue
comprise the motivation-enhancing HPWPs. The obvious link among motivation and pay fo
performance is well established by a plethora of conceptual and empirical studies (e.g. Ba
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and Locke, 2000; Stajkovic and Luthans, 2003; Rynes et al., 2005; Peterson and Luthans, 200
Employment security,when valued by employees,can also increase employees’motivation
(Pfeffer, 1998; Gong and Chang, 2008). Finally, inherent in the nature of self-managed teams
are the concepts of effective peer control and enhanced sense of responsibility (Pfeffer, 1998
FIGURE 1 The complex relations between high-performance work practices (HPWPs)and the ability–
motivation–opportunity framework
FIGURE 2 The complex relations between high-performance work practices (HPWPs) and the supp
and demand-side mobility constraints
SHRM and HC: is the field going in circles?
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This contextof constantpeer evaluation and accountability can be argued to enhance
employees’ motivation.
Opportunity or empowerment,the lastaspectof AMO, refers to the extentto which
employees have at their disposal all the necessary resources for completing job-relevant t
as well as the discretion to decide how to perform tasks (Delery and Shaw, 2001). Opportu
of course,does not stem only from HRM practices.Organisationalstructures and control
mechanisms also influence opportunity. For the purposes of this paper, we focus only on t
opportunity-enhancing HPWPs, such as sharing of information, reduction of status differen
and self-managed teams.Sharing information with employeesand minimising status
differences enhance communication among employees (Pfeffer,1998),while self-managed
teams offer autonomy to employees in terms of determining how their outcome-related ta
will be performed (Pfeffer,1998;Mathieu et al.,2006).Thus, these three HPWPs create an
organisational climate and describe an organisational structure that not only welcomes bu
also expectsemployees’involvementand participation in influencing work processes
and decisions,which have been shown to be associated with superiorwork outcomes
(Subramony, 2009).
As briefly discussed earlier,the relationship between specificHRM practices and
organisational outcomes via the enhancement of ability,motivation and opportunity is well
established,particularly atthe individualemployee level.What has not been sufficiently
addressed yet is how,within the context of a labour market,firms can retain their valued,
motivated and empowered human capital resources. In the following section, we take this
by conceptually exploring the potential of HRM practices to shape supply-side and demand
side mobility constraints.
High-performance work practices and human capital mobility constraints
The HPWPs approach and the human capital perspective, despite their differences, have a
important deficit in common: they either ignore the workings of the labour market or they
on the efficiency of questionable isolating mechanisms (i.e.firm specificity).It is important,
therefore,to acknowledge,as we did previously,that human capital,unlike other resources
cannot be ‘owned’(Coff,1997;Brymer et al.,2014).In order for an employer to utilise the
KSAOs of its workforce,a mutually agreed upon employmentrelationship is required
(Roth and Sotomayor,1992).This temporally bounded employmentrelationship along
with the mobility of employees constitutes important barriers towards creating and sustain
competitive advantage.Firms,however,are not defenceless against the forces of the labour
market.In order to understand how firms can guard their human capitalresources,it is
importantto connectand explicitly indicate how HRM practices help firms in shaping
supply-side and demand-side mobility constraints (Campbellet al., 2012b).The question
then becomes: Which HPWPs can increase the retention of the valued human capital by in
mobility barriers?
Supply-side mobility constraintsAs previously discussed,there are two main supply-side
mobility constraints (Campbell et al., 2012b): information asymmetries in the labour mark
which limit employees’ ability to accurately evaluate their external labour market value, a
mobility costs (i.e. search, bargaining, and switching costs, costs associated with idiosyncr
preferences and non-pecuniary rewards and legal restrictions). Consequently, firms can re
their valued human capital through HPWPs that minimise employees’ willingness to specif
their market value and shape mobility costs in such a way that switching employers will b
cost-ineffective. Before discussing which HPWPs constrain the supply-side employee mobi
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it is important to clarify two basic underlying assumptions.First,our focus is on voluntary
turnover or the quit rate.Second,as Coff and Raffiee (2015) underscored,in terms of the
workings of the labour market,employees’perceptions and perceptions the market holds
regarding a firm’s human capital are more important than reality.
We expectthat HPWPs can influence supply-side mobility constraints via two routes:
employer attractiveness and job-embeddedness.Employer attractiveness has been described
as the extent to which individuals perceive a firm as a great place to work (Chapman et al.,
2005),and it is linked with Person-Organisation (P-O)fit perceptions (Uggerslev etal.,
2012),as well as the inducements and investments thatthe firm offers (Tsuiet al.,1997).
Job-embeddedness,conceptualisedas a constellationof financial and non-financial
(psychological and social) factors (Mitchell et al., 2001; Holtom et al., 2008), has been argued
to result in lower quit rates (Crossley et al., 2007; Lee et al., 2014).Specifically,
job-embeddedness shapes a ‘web’ in which the employee can be ‘stuck’. This ‘web’ is shape
via three mechanisms:links (formal and informal connectionswith people inside and
outside of the firm), fit (perception regarding the value and demands-needs congruence with
the focal firm) and sacrifice (psychological, social and/or material cost associated with leavin
the firm).
Undoubtedly, there are a number of constructs that we could use to explain the potential
impact of HPWPs on supply-side mobility constraints.For instance,organisational
commitmentand job satisfaction are two ofthe most oft-cited predictorsof employee
turnover intentions and actualturnover (Mathieu and Zajac,1990;Eisenberger et al.,1997;
Meyer and Allen, 1997; Kwon et al., 2010). However, job-embeddedness,unlike
organisationalcommitmentand job satisfaction,encapsulates notonly on-the-job butalso
off-the-job aspects(Mitchell et al., 2001).In a similar manner,even though employer
attractiveness can be argued to partially overlap with the concept of job-embeddedness,it
adds a unique feature:it reflects an individual’s perceptions before he or she enters the
employment relationship.
Firms can influence the likelihood of turnover even before the employment relationship
begins through selective hiring processes. For instance, Huselid (1995) showed a link betwee
turnover and selective staffing practices (as part of a system of practices). By ensuring a hig
value congruence between the employee and the firm, as well as a fit between the requirem
and the offerings of the firm and the abilities and needs of the employees (Kristof,1996),
employees are less likely to leave their ‘ideal’employer (Kristof-Brown et al.,2005).These
enhanced fitperceptions are also associated with employees’perceptions regarding the
complementarities between their own abilities and other firm characteristics (e.g.values,
structures and other resources). Such perceptions further enhance job-embeddedness via th
belief that employees can reach their full potential only within the specific context.
Despite the mixed empiricalfindings regarding the relationship between training and
voluntary turnover(Gardneret al., 2011),training has the potentialof increasing the
supply-side mobility barriers for human capital.As Tharenou et al.(2007) conclude in their
review of the relevant literature,training can reduce voluntary turnover when it is ‘framed
as a positive organisational contribution to employees’ human capital development’ (262). F
investments in training trigger a series of employees’ perceptions regarding their employer a
their employability. Training signals to employees that the firm cares about them, values the
contributions and is interested in their development and continued employment (Pfeffer, 199
enhancing employees’ perceptions of employer attractiveness (Tsui et al., 1997). Participatio
employer-sponsoredtraining and developmentalactivitiesalso enhancesemployees’
perceptions that they are investing time and effort in developing firm-specific human capital
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Employees are expected, therefore, to be more embedded with their current employer an
willing to search for alternative employment fearing that the time and effort they have inv
in developing firm-specific KSAOs will be in vain and not appreciated by the external labou
market.
High-compensation contingenton performance is another ofPfeffer’s (1998)proposed
HPWPs that influences perceived employer attractiveness and job-embeddedness. Concep
and empirical papers (e.g. Osterman, 1987; Shaw et al., 1998; Conroy et al., 2014) have li
satisfactionand turnover. Pay-for-performance,when appropriately designed and
implemented,rewards high performers who willbe more satisfied and less likely to leave
(McEvoy and Cascio, 1987; Nyberg, 2010). In addition, when pay-for-performance is prope
communicated,then the pay dispersion among high-performing and low-performing
employees has a negative relationship with the turnover of high performers (Shaw and Gu
2007).Thus, firms offering pay-for-performance willbe perceived as attractive by those
employees that firms wish to retain: high performers. The willingness of high performers t
terminate their employment relationship will be further reduced when employees perceive
their high performance and their subsequent high compensation are embedded in the spe
firm (e.g. complementarities with other firm-specific resources).
Perceived employer attractiveness and job-embeddedness are also expected to be enha
by employment security. Job security, according to existing research (e.g. Arnold and Feld
1982; Luna-Arocas and Camps, 2007), is negatively related to turnover intentions and actu
turnover via various mediating mechanisms,such as affective commitment.As Shaw et al.
(1998) emphasised,when a firm does not offer job stability,the perceived attachment with
the firm is diminished.Inherentin the conceptof job security is also the notion ofthe
continuance ofone’s income and employmentin the future. Employees who decide to
explore alternative employment opportunities face the risk of losing this sense of stability
(Pfeffer, 1998).
Finally, sharing of information,teamwork (self-managed teams)and reduced status
differences are expected to increase the supply-side mobility constraints via perceptions o
embeddedness.First, sharing of information can be viewed asa signal by employees
regarding the extentto which the firm trusts them (Pfeffer,1998),and trust,in turn, can
create a link between employees and the firm that enhances perceived job-embeddednes
(Mitchell et al., 2001). Similarly, firms emphasising teamwork and reduced status differenc
are likely to create an organisationalenvironmentthat nurturesthe developmentof
social ties among employeesand, ultimately,increaseembeddednessperceptionsand
decrease voluntary turnover (Gardner et al., 2011). These HPWPs boost the sense of comm
fate which furthercultivates employees’attachmentwith their coworkers and the firm
(Pfeffer,1998).
Proposition 1:HPWPs createsupply-sidemobility constraintsthrough increasing employer
attractiveness and/or job-embeddedness perceptions.
Demand-sidemobility constraints Demand-sidemobility constraintsare arguably less
explored,but no less important than supply-side mobility constraints.On the demand-side,
competitors ‘show their teeth’:they engage in tactics,such as aggressive recruitmentand
extending ‘unsolicited offers’to their rivals’employees (Rynes and Barber,1990;Lee et al.,
2008), in order to deplete their rivals from their valued human capital (Finlay and Coverdil
2002;Rao and Drazin,2002).Gardner (2005),for instance,showed that,in a sample of 661
companies in the software industry, 135 attribute the loss of human capital resources to th
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competitors’ purposeful depletion tactics. The need to establish effective demand-side mobil
constraints is further highlighted by the fact that firms have sometimes engaged in illegal an
poaching pacts (e.g. the case of Adobe, Apple, Google and Intel). It is highly critical, therefor
for firms to employ legal strategies not only for ensuring that their human capital stays with
them but also for safeguarding, to the extent that it is feasible, their valued human capital fr
being ‘stolen’ by rival firms. HPWPs have the potential to assist firms in building demand-side
mobility constraints.
As noted in the case of the supply-side mobility barriers, the workings of the demand-side
the labour market is highly contingent on perceptions (Coff and Raffiee,2015).Thus,even
though firms have importantlimitationsin directly influencing demand-sidemobility
constraints, we argue they can do so by shaping the external market’s perceptions regarding
their human capital’s firm specificity, as well as the complementarities between their human
capital and other firm-specific resources. Firm specificity signifies that the particular human
capital is not readily deployable in other firms (Coff and Kryscynski,2011), thus decreasing
the exchange value in the externallabour market(Klein etal., 1978).As Campbellet al.
(2012b) emphasised, however, the labour market does not always hold accurate perceptions
about the nature of the human capital. From a demand-side perspective, we are not interest
in the actual firm specificity of the human capital but the perceptions that competitors hold.
Given the importance of complementarities (Teece,1986;Prahalad and Hamel,1990;Dess
and Shaw, 2001; Campbell et al., 2012a), we argue that the synergies between human capit
and other firm assets (e.g.organisationalculture and structure,and other human capital)
and, in particular, the market’s perceptions about these complementarities (Coff and Raffiee
2015) raise demand-side mobility barriers. We propose three HPWPs that have the potential
to influence the demand-side of the labour market via the market’s perceptions of human
capital’s firm specificity and complementarities:teamwork,investment in extensive training
and selective hiring.
When human capital is embedded in teams not only the ‘output is more than the sum of th
separable outputs of each cooperating resource’ but also ‘it is difficult,if not impossible,to
identify the specific source of competitive advantage’ (Barney and Wright, 1998: 39). Studie
have indicated that when rivals have managed to attract the focal firm’s star performers, the
latters’post-mobility performance declines (Groysberg and Lee,2009),but this decrease in
performance is less pronounced when whole teams are poached (Groysberg etal., 2008;
Campbell et al., 2014). Poaching entire teams, while not impossible, can be particularly costl
Thus,firms having a reputation for emphasising teamwork send the signalto the external
labour market that their superior performance is the outcome of complementarities rather th
a few star employees. These firms’ practices simultaneously decrease their competitors’ abil
to appropriately value the firm-specific and generic human capital that each employee holds
As mentioned previously, the information asymmetry that characterises the labour market
(Campbell et al., 2012b) forces competitors to rely on signals to estimate the nature of the h
capitalof the focalfirm (Coff and Raffiee,2015).Firms,therefore,by signalling that their
employees possess firm-specific human capital can shape the perceptions their competitors
hold and lessen the likelihood that their employeeswill be poached.In intensifying
competitors’perceptions regarding the firm specificity ofthe focalfirm’s human capital,
selective hiring and extensive training can be useful.Firms that engage in highly selective
hiring processes can create the reputation that they hire only employees who either have
firm-specific KSAOs or the ability to develop firm specificity.This reputation can be further
enhanced when the firm invests heavily in training.On the basis ofthe aforementioned
arguments, it is proposed that
SHRM and HC: is the field going in circles?
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Proposition 2: HPWPs create demand-side mobility constraints via the labour market’s percep
regarding the firm specificity of human capital and the complementarities of the human capit
other firm assets.
DISCUSSION
The so-called ‘micro–macro divide’ (e.g. Molloy et al., 2011) is illustrated vividly in the RBV
literature. On the one hand, the SHRM perspective argues and provides some evidence th
HPWPs are responsible for generating and leveraging the appropriate human capital resou
that lead to superior organisationaloutcomes (e.g.Arthur, 1994;Huselid,1995;MacDuffie,
1995;Delery and Doty,1996;Ichniowski et al.,1997).Thus, HRM practices and systems can
be considered the source of sustained competitive advantage (Lado and Wilson, 1994; Pfe
1994;Becker and Gerhart,1996).On the other hand,strategy scholars make compelling
argumentsthat HRM practices are transferable and imitable and,consequently,cannot
generate sustainable competitive advantage (Wright et al., 1994; Chadwick and Dabu, 200
Proponents of this perspective, acknowledging the multilevel nature of human capital with
the firm (e.g. Fulmer and Ployhart, 2014), advocate that human capital and its three isolat
mechanisms, namely, firm specificity, social complexity and causal ambiguity (e.g. William
1975;Lippman and Rumelt,1982;Barney,1991),enable firmsto generate and sustain
competitive advantage.
In this paper, we shift the attention away from the ‘Is it the chicken or the egg?’ questio
We argue that,even though the human capital perspective provides compelling arguments,
there are some inherentflaws in the underlying rationale.For instance,as discussed
previously, empirical evidence and theoretical arguments exist that question the effective
of human capital isolating mechanisms.In addition,models indicating how human capital
resources are builtvia the combinations and complementarities among individualhuman
capital (e.g.Ployhart et al.,2014) are very difficult or impossible to empirically test.Finally,
the argument that HRM practices cannot be the source of competitive advantage due to th
imitable nature (e.g.Wright et al., 1994;Chadwick and Dabu, 2009)is rathertenuous
considering the variability in the HRM practices that different firms adopt and implement.
Even though this variability has been attributed by some scholars (e.g.Kaufman,2012) to
the theoreticaland empiricalflaws of the SHRM literature thathave only an anaemic
convincing power over practitioners,we argue that the aetiologies behind these variations
are different.It is our beliefthat HRM practices,or at leastcoherentsystems ofHRM
practices, meet to some extent the criteria (as summarised by Ployhart, 2012) that contrib
to a resource’s inimitability:socialcomplexity (their interplay with a firm’s human capital
generated value),interconnectedness with other resources (the value of an HRM practice is
highly contingent on the other practices,the structure,the human capital,the culture and
other resources of the firm),causalambiguity (competitors do not necessarily understand
the importance of the specific practices) and path dependency (their development and sp
characteristics have followed a specific trajectory overtime within a specific firm).We
contend,therefore,that in bridging these two approaches it may be more practical to focus
on HRM practices and systems and the resources they create.Specifically,we suggest that
HPWPs not only build firm-specific and/or general KSAOs and provide necessary motivation
and opportunity for employees to utilise their human capital but also aid in shaping supply
side and demand-side labour marker mobility constraints.
Our intent in this paper was to simply highlight and stimulate thinking regarding the iss
that reinforce the divide between SHRM and strategic human capitaland to provide a
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conceptual model that summarises the importance of HPWPs.In doing so,we made a few
assumptions. For instance, we utilised in our model Pfeffer’s (1998) list of seven HPWPs, but
there is no consensus in the relevant literature regarding which practices should be consider
as HPWPs (e.g.Becker and Gerhart,1996;Kepes and Delery,2007).Optimistically,other
researchers will build on this conceptual model and explore the role of other HRM practices.
Similarly, one could argue there are numerous other constructs, besides employer attractive
job-embeddedness,firm specificity and complementarities that could be considered as the
mediating mechanisms between HPWPs and supply-side and demand-side labour marker
mobility constraints.Finally,multiple arguments can be made in support of or against the
suggested links between specific HPWPs and the mediating constructs. However, the purpos
of our model was not to offer novel or undeniable ideas but rather to demonstrate how the
strategic human capital and SHRM literatures constitute two perspectives that, in tandem, off
a better understanding of the same phenomenon thereby paving the path for future research
It is our conviction that the intersection between strategic human capital and SHRM resear
offers fertile ground for future conceptual and empirical research. One important question th
calls for research involves the identification of the HRM practices that can actually generate
mobility constraints necessary for firms to retain their valued human capitalresources.As
Barney and Wright (1998) and Campbell et al. (2012b) have argued, regardless of the stance
we take, human capital’s potential to generate sustained competitive advantage is contingen
upon labour market dynamics.Firms,however,are not defenceless against the workings of
the labour market. Firms, as we illustrate in our model, have a palette of HRM practices that
can be used to shape, to some extent, human capital resources and mobility barriers. Which
specific HRM practices are more effective in shaping,each is stillan importanttopic for
research. These research questions become more complicated considering that HRM practice
must play multiple roles: enhance ability, motivation and opportunity while, at the same time
influence the employees’willingness to terminate the employmentrelationship and the
perceptions that the rivals hold regarding the value of the focalfirm’s human capital.An
additional untapped research question meriting exploration is whether firms are able to depl
and should deploy differentiated HRM practices for influencing the mobility barriers for
different groups of human capital. Following Lepak and Snell’s (1999) differentiated workforc
arguments,one could argue thatfirms should utilise differentpractices for the different
workforce groups in order to enhance the mobility barriers for the employees that they wish
to retain and relaxing these constraints for those employees who are less important for the
firm’s success. To date, there has been very little research in this area.
Future research should also explore the relative effectiveness of investing in practices with
the intentof enhancing supply-side and demand-side constraints.As we discuss in our
conceptual model, firms may be less able to influence demand-side mobility constraints. One
of the most commonly used arguments associated with the demand-side labour mobility is th
it is the visibility of high-performers that enhances the likelihood of receiving alternative job
offers (e.g. Allen and Griffeth, 2001). It has been proposed, therefore, that firms can minimis
the visibility of high performers by embedding them in work groups.Today,however,the
use of socialnetworks,such as LinkedIn,where individuals keep their networks informed
regarding their roles and responsibilities within their teams and so on, makes it questionable
whetherteamsare an effective mechanism forweakening the perceptionsthat specific
employees drive their performance. Simultaneously, other practices that enhance supply-sid
mobility constraints,such as high compensation and promotions,constitute signals of high
performance to the external labour market (e.g. Waldman, 1990) and, essentially, increase t
visibility of high performers. Consequently, it would be particularly interesting from a researc
SHRM and HC: is the field going in circles?
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and practice standpoint to explore the impact of different HPWPs on both supply-side and
demand-side mobility constraints.
In this paper, we have argued for more attention to HRM practices, and systems, given
provide a more practical approach for firms to gain, create and utilise strategic human cap
resources and, ultimately, contribute to a firm’s competitive advantage. In the end, althou
is difficult to untangle the many factors that might influence competitive advantage, and w
have to acknowledge the critical role of human capital resources. For instance, one can ar
a firm may need strategic human capital resources within the firm to provide the knowled
adopt HPWPs. In other words, a firm must have human capital management expertise to a
appropriate human capital management strategies that will ultimately create strategic hu
capital resources elsewhere within the firm. This causal chain, however, is not a prerequis
for firms to achieve competitive advantage, given that there is at least a small possibility
firm might adopt the appropriate HRM practices by accident or luck. However, the endeav
to provide an answer to the debate of whether it is the HRM practices or the human capita
resources that have the potential of creating sustainable competitive advantage is no diffe
from the vain and unfruitful attempt to resolve the ‘chicken or egg’ dilemma.
Finally, it should be clear from our review of the literature that the field is going in circle
is evolving.Early SHRM researchers emphasised HRM practices and systems as levers to
achieve firm performance. This early research was followed by attempts to explain the ‘bl
box’ between HRM practices and firm performance. What has emerged is the
acknowledgementthat human capitalresources are atleastpartially the mediating link
between HRM practices and firm performance.This, however,is nothing new to SHRM
researchers who voiced this relationship from the very beginning (Barney and Wright, 199
The field is now engaged in an exploration of how such human capital resources could lea
to competitive advantage. We argue that this actually brings the field full circle to the ‘bas
quest of specifying the HRM practices and their combinations that are associated with high
levels of organisationaleffectiveness.Expectantly,this time,researchers willbetter explore
the ideas behind HRM systems proposed in the 1990s. For instance, the often used indices
HRM practices are unlikely to uncoverthe complexity in HRM system–human capital
resources relationships.The idea that ‘more HRM’,as Kaufman and Miller (2011) frame it,
leads to better performance is certainly not what SHRM researchers have advocated, even
it appears to be what they have measured. The idea is that higher firm performance is ach
by having the appropriate system of HRM practices for the firm’s particular strategic conte
Along with other scholars (e.g. Chadwick, 2010; Delery and Gupta, 2016), we hope that fu
research will explore, on the basis of strong theory, the intricate interactions among pract
is this complexity that is important to understand, and something that the SHRM research
date has not explored well. In conclusion, RBV has the potential to generate truly informat
knowledge that will narrow the micro–macro divide. In doing so, however, as Kaufman (20
emphasised SHRM scholars need to broaden the paradigms they use by incorporating othe
approaches, such as economic theory, in order to overcome some major problematic area
the application of RBV in the SHRM literature (e.g. potential employee relations ramificatio
resulting from HR practices that aim at capturing human capital rents.
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