Ch. 5: Mutual gains?

Chapter 5 asks the central question: is what employers want equal to what employees want? Mainstream HRM often assumes 'mutual gains': HR practices that are good for the organization are also good for employees. Critical HR studies question this. The chapter discusses the underlying assumptions of HRM, consensus- versus dissensus-oriented research, a typology of HRM research, and the contributions of Organizational Behaviour, Industrial/Organizational psychology and Organizational Health Psychology, including the Job Strain Model and the Job Demands-Resources model. It ends with the balance between agility (what employers want) and vitality (what employees want).

1. What employers want and what employees want

The slides illustrate what employers want with images of a genius (smart, innovative employees), runners (fast, high-performing employees) and a chameleon (employees who adapt easily): in short, intelligence, performance and adaptability. What employees want is:

Fun at work
Social support from superiors
An acceptable work-life balance
Employee development opportunities
A nice group atmosphere
Employment security

Central question

What employers want = what employees want? The mutual gains perspective says yes (or at least: both can gain at the same time). The critical perspective says: not necessarily, there can be conflicting interests.

2. Critical Human Resource Studies: HRM's underlying assumptions

Critical HR studies ('Guess who's coming to dinner?') make the hidden assumptions of mainstream HRM explicit. Mainstream HRM tends to assume that:

There is a general and common trust between employer and employee;
Employer and employee share the same interests ('what is good for the employer is also good for the employee and vice versa');
The relationship between employer and employee is harmonious;
The present is little or not affected by the past;
The employee acknowledges the organizational hierarchy and the employer's power position;
Science is neutral;
The researcher is neutral, anonymous and out of time and space.

The question 'true or false?' invites a critical look: in reality, trust is not always present, interests can conflict, relations can be conflictual, history (earlier reorganizations, broken promises) matters, power is unequally distributed, and neither science nor researchers are completely neutral (e.g., research funded by management, or research questions that only take the employer's perspective).

3. Consensus-oriented versus dissensus-oriented HR studies

Keegan and Boselie (2006, Journal of Management Studies) found that the main strategic HRM themes adopt a consensus orientation:

HRM and performance;
HRM and sustained competitive advantage, mostly using the resource-based view as theoretical framework;
HRM, strategy and fit (strategic fit between HRM and strategy).

Dissensus-oriented (critical) HR studies look at the other side. Examples:

The struggle of line managers to make sense of changes urged by HRM discourse of commitment, flexibility and rapid response to market conditions (Ezzamel, Simon, Wilkinson and Willmott, 1996);
The mainstream (often implicit) assumption that labour market deregulation and trade union abolition are required for organizational success (Black and McCabe, 1996);
The continued marginalization of women in organizational life, in particular regarding promotion, career development and positions of managerial power (Edwards, Robinson, Welchman and Woodall, 1999);
The economic exploitation of workers, while at the same time proposing social partnerships, stimulating (false) employee involvement in decision making and promoting teamwork (Ackers and Payne, 1998);
The political repression of weaker groups (mainly shop floor workers) by more powerful groups such as top management (Yun, 1999);
The lack of ethical debates in HRM related to flexibility, high commitment, empowerment and employability (Winstanley and Woodall, 2000);
The exclusion, marginalization and repression of older workers (Taylor and Walker, 1998).

The critical HR studies highlight the other side of organizational innovations and HR renewal, for example work intensification, job stress, perceived employee insecurity and discrimination (e.g., based on age, gender, race and religion).

Illustrations used in the lecture: a car manufacturer that took measures to protect its ageing workforce (ergonomic adjustments of the production line designed with older workers), and reverse mentoring, where younger employees mentor older employees (e.g., on digital skills), which challenges age stereotypes and values the contribution of both groups.

4. A typology of HRM research

Boxall, Purcell and Wright (2007) distinguish:

Micro HRM: mainstream OB research at the individual employee level with a focus on single HR practices;
Strategic HRM: mainstream HR research at the organization level with a focus on multiple HR practices.

Wright and Boswell (2002) combine two dimensions: the level of analysis (individual versus organization) and the number of HR practices (single versus multiple):

Level of analysis	Multiple HR practices	Single HR practice
Organization	Strategic HRM; Industrial Relations; High-performance work systems	Isolated function
Individual	Psychological contract; Employment relationship	Traditional/functional HRM; Industrial/Organizational Psychology

5. HR outcomes in OB research

OB research raises questions that are relevant for mutual gains:

Is a happy worker also a productive worker?
Can an unhappy worker be productive?
What's in it for the individual worker if he or she shows organizational citizenship behaviour (OCB)?

In general, OB research (micro HRM) focuses mainly on employee attitudes, or what an employee desires. Organizational Health Psychology and I/O psychology focus much more on employee well-being, or what an employee can handle (cope with), for example with regard to stress.

6. Industrial/Organizational (I/O) psychology

Main themes in I/O psychology:

Methodology and psychometric issues;
Predictors of performance;
Work motivation and attitudes;
Performance measurement and work outcomes;
Leader influences;
Human factors and applied experimental psychology.

There is a call to narrow the divide between research and practice, to combat the underutilization of research findings in organizations. The current trend to use big data and AI in I/O psychology and HRM helps to further integrate micro HRM and SHRM issues, so that hopefully mutual gains, pluralist and critical perspectives become omnipresent in the future.

7. Organizational Health Psychology

Research in Organizational Health Psychology is much more focused on the potential negative effects of jobs and managerial practices on employees (e.g., employee (dis)satisfaction, job stress, fatigue and burnout) than the HRM, OB and I/O psychology disciplines.

Karasek's Job Strain Model (1979)

Two dimensions: (1) job demands (low versus high): stress sources (stressors), such as increased workloads, that require sustained physical and/or psychological effort or skills; (2) job decision latitude (low versus high), which consists of skill use + decision authority: job control or discretion, the employee's leeway or room to manoeuvre in the job.

	Low decision latitude	High decision latitude
Low job demands	Passive jobs	Low strain jobs
High job demands	High strain jobs	Active jobs

Passive jobs (low demands, low latitude): e.g., a routine job with little challenge and no say; induce a decline in activity and learned helplessness.
Low strain jobs (low demands, high latitude): e.g., a craftsman with ample control and moderate workload.
High strain jobs (high demands, low latitude): e.g., an assembly line worker or call centre agent under time pressure; the highest risk of stress and health problems.
Active jobs (high demands, high latitude): e.g., a manager or professional with challenging tasks and much autonomy; lead to learning and 'the development of new behaviour patterns both on and off the job' (Karasek, 1979, p. 288).

Predictions: following diagonal A (from low strain to high strain), strain increases as job demands increase, relative to decreasing job decision latitude. Following the other diagonal (diagonal B, from passive to active), activity level and learning increase. The HR implication: stress is not caused by high demands alone but by high demands combined with low control; giving employees more control (autonomy, skill use) can buffer the negative effects of high demands.

Job Demands-Resources (JD-R) model (Demerouti and Bakker)

A broader model that divides job characteristics into job demands (aspects of the job that require sustained effort and have physical or psychological costs, e.g., workload, time pressure, emotional demands) and job resources (aspects that help achieve goals, reduce demands or stimulate growth, e.g., autonomy, social support, feedback, development opportunities). Two processes: the health impairment process (high demands lead to exhaustion and burnout and to health problems) and the motivational process (resources lead to work engagement and better performance). Resources can buffer the impact of demands. Compared to Karasek, the JD-R model is more flexible because any demand and any resource can be included, not only workload and control.

8. HR discipline characteristics

Three features make the HR discipline special:

Ambiguities in the role of HR professionals: they serve management and are also expected to look after employees (see Chapter 13);
Potential conflicting interests between employers and employees;
Dualities in goals: economic value versus moral values.

9. Balanced approaches in HRM: agility and vitality

Agility (organization)

The concept that perhaps best captures what employers want is agility: the organizational capability to adapt easily to changes in its external environment (Dyer and Shafer, 1999).

Vitality (employee)

The concept of vitality captures what employees want: elements of employee satisfaction, job demands, employee trust in the organization and its managers, job stress, and the physical health of an individual employee.

The balanced approach is presented as a scale with agility on one side and vitality on the other. HRM should not maximize one at the cost of the other. An organization that demands extreme agility (constant change, flexible contracts, high workload) will exhaust its employees (low vitality), which in the end reduces its capacity to change. Employees who are healthy, trusting and not over-stressed (high vitality) are better able to cope with change, which supports agility. Mutual gains are therefore possible, but not automatic: they require conscious balancing.

Key take-aways

Mainstream HRM assumes mutual gains, trust, shared interests and harmony; critical HR studies question these assumptions.
Consensus-oriented themes: HRM and performance, RBV and competitive advantage, strategy and fit. Dissensus-oriented themes: work intensification, stress, insecurity, discrimination, exploitation, power.
Wright and Boswell's typology: level of analysis x number of HR practices.
OB focuses on what employees desire; I/O and health psychology on what employees can handle.
Karasek: four job types; high strain = high demands + low decision latitude. JD-R: demands (health impairment) and resources (motivation).
Balance agility (employer) and vitality (employee).

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