HRM P

64
A STUDY OF HRM PRACTICES AND ORGANIZATIONAL

CULTURE IN SELECTED PRIVATE SECTOR
ORGANIZATIONS IN INDIA
Anil Kumar Singh*
1. Executive summary
The new economic environment is primarily marked by the freeing of shackles for
entrepreneurship
and economic growth. The license system has been replaced, to a great
extent, by a market system. The challenge of Human Resource Management (HRM)
practices would be to create an environment of resilience, which can accommodate
and assimilate successfully changes in systems, structures, technologies, methods,
etc. People would have to ascribe the right meaning to the change process. India is
well-equipped to succeed on global markets. It has a pool of highly educated people,
a well-developed judicial system, democratic governance, an established banking
industry, and fairly sophisticated and inter-linked fi nancial markets. Knowledge
industries will be at the vanguard of economic opportunity, and India will be poised to
take advantage of this trend with its corpus of highly skilled people.
The changes on the market scene have necessitated the Indian industry to look
inward for the development of human resources (HR). People develop themselves
in a globalized scenario with new directions along with new problems and issues
arising to develop new competencies to meet the changing requirements, aspirations,
and problems. There are, however, some universal goods towards which all
human resource management efforts should be aimed at. The emergence of Japanese
human resource management has led to the concept of culture in a big way. At the
organizational level, the goal of HRM is normally to have competent and motivated
employees to ensure managerial effectiveness and growth of the organization.
Organizations
normally direct their HRM efforts towards the development of competencies
and organizational culture. Organizations use mechanisms to achieve HRM goals
with competent and committed employees. Organizations can achieve very little even
if they have excellent technological and other resources at their command. Such an
assertion gains better credibility in the context of developing countries like India, that
is, typically in early growth stages in terms of economic development, and growing
more rapidly than the traditional developed economies of Japan, North America and
* University of Delhi, Sri Aurobindo College (dranil.singh@gmail.com).
This paper was presented at the Tenth International Conference on the topic of UN Millennium Development Goals:
Challenges and Perspectives held in Gdll, Hungary, on 23-26 June, 2009.
65
AOP 18(4), 2010, ISSN 0572-3043
Europe. The countries with higher rates of growth are mostly in South East Asia, South
Asia and some Latin American countries.
Research evidence shows that HR practices along with culture do affect effi ciency
in the organization. There are hardly any or very few studies which show a link between
HRM practices and organizational culture in India. The review of literature has
identifi ed that the major chunk of research in India emanates from descriptive data and
experience sharing, which does not serve certain practice-oriented concerns. There is
very little systematic, empirical research in the scientifi c paradigm that has been
carried
out in the Indian HR lexicon. HR research is inspired by western models, and lacks an
indigenous perspective. The review of literature on HRM practices has revealed that
the most of the work done is in relation to organizational strategy.
The methodology employed a sample of 95 respondents from two private sector
organizations. The questionnaire consists of 90 items, of which (1) 69 items concern
HRM practices of the organization, and (2) 21 items concern organization culture.
The correlation analysis has been used to infer the relationship between variables
of HRM practices and organizational culture. A healthy culture is required for utilizing
and enhancing employee competencies and to develop people. This study focuses on
the
positive signifi cant relationship between HRM practices and organizational culture in
private sector organizations. There is a positive signifi cant relationship between HRM
practices and variables of organizational culture operationalised in terms of selfrealization,
status enhancement, inventive values and socio economic support.
The pressures are most likely to be felt by those who have led and managed the
change process in such a volatile economic environment. HRM would have the ability
to attract and retain people and this would be the key to manage this macro changein
terms of both pace and rate. Change leaders would be confronted with the need to
reorient
culture, thinking and paradigms. HRM as a function and as a prime mover would need to
focus on this changing and emerging role with the help of organizational culture.
2. Introduction
The global turmoil has witnessed the growing importance of Human Resources
Management (HRM) in both business and public life. The turbulent business climate
brought in the wake of liberalization, globalization, changing technologies, growth in
knowledge and advances in information technology is offering managers a complex
and challenging situation (Davis, 1995).
Indian organizations are tending to become competitive to meet globally relevant
standards. The growing emphasis on privatization has warranted a new focus in terms
of result orientation, long-term strategies, consumer focus, initiative and different
mindsets for internal and external communication.
The Indian business scenario is characterized by the historical rigidities arising
largely out of centralized planning. Our decision-making is infl uenced, among other
factors, by posing more a constraint rather than a facilitator. The practice of protecting
Indian industries through protective tariffs and quotas for over four decades has led to
a lack of global competitiveness in terms of quality of products, services and prices.
66
ACTA OECONOMICA PRAGENSIA 4/2010
Indians are more accustomed to thinking in terms of narrow identities like our
own selves, caste, and community, regional and linguistic groups. A failing and
defi cient infrastructure and frustrating bureaucracy at operating levels, and the cultural
and indigenous barriers added fuel to fi re. Hamel and Prahalad (1991) contend that
a competitive advantage is obtained if a fi rm can obtain and develop human resources,
which enable it to learn faster and apply its learning more effectively than its rivals.
The HRM has emerged and evolved as one of the most important areas of organizational
science and practice. It has not been developed in isolation, but rather in the
context of industrial change and economic development. The uniqueness of the Human
Resources (HR) approach requires a totally different type of attention from managers.
The HR has characteristics that provide the greatest challenge as well as opportunity.
A companys HR is fragile with delicate relationships, along with unpredictable
contributions,
and permanency is uncertain (Guest, 1991).
Wright, Smart, and McMahan, (1995) mention that the crucial inputs, among others,
to an organization are its human resources. People bring to their jobs diversity of skills,
needs, goals, and expectations. They are socialized into the organization through their
hiring to begin with, and their continuous functioning in the organization. According to
Bulla and Scott (1994), we need to ensure that the human resource requirements of an
organization are identifi ed and plans are made for satisfying those requirements.
Guest, Conway, Briner and Dickman (1996) are of the opinion that the interface
between the individual and the organization is critical to full utilization of human
resources. The individual and the organization establish a psychological contract.
Individual members expect to make contributions to the organization and receive
certain rewards in return. The organization provides certain rewards and expects in
return certain contributions from the individual. It is at this interface between the
individual and the organization that issues such as HR planning, work analysis, career
development, leadership, job motivation, the appraisal-reward process, and the
organizational
culture become important.
The patterns of work relationships at work refl ect the HRM philosophy. The practices
and philosophy of HRM are perpetuated by managers who are encouraged to follow the
role model of their seniors. In the process of organization socialization they internalize
the values and attitudes of their leaders. The entire process is thus institutionalized
(Snell,
Youndt, and Wright, 1996). In general, HRM has been described as: broad and strategic;
involving all managerial personnel; regarding employees as the single most important
organizational asset; being proactive in its responsibilities; and having the objective of
enhancing organizational performance and meeting employee needs (Poole, 1990).
3. Organizational culture
The idea that organizations have culture has been acknowledged since Lewin, Lippitt
and Whites (1939) research on creating social climate. Culture and climate are integral
parts of an organization. Organizational culture refers to a system of shared meanings
held by members that distinguishes one organization from other organizations (Schien,
1985). Organizational culture provides employees with a clear understanding of the way
67
AOP 18(4), 2010, ISSN 0572-3043
things are done in that organization. Organizational culture is the perceived, subjective
infl uence of the formal system, the informal style of managers and other signifi cant
environmental factors on the attitudes, beliefs, values and motivation of the people in
a particular organization (Litwin and Stringer, 1968).
The concept of culture is seen as a kind of bridge between the individual and the
organization. Culture performs a number of functions within an organization. It creates
a distinction between one organization and another, it conveys a sense of identity for
role incumbents, it facilitates the generation of commitment, and it enhances social
system stability. Finally, culture sells as a sense-making and control mechanism that
guides and shapes the attitudes and behaviour of employees.
Hofstede (1980) felt that cultures which are high on the long-term orientation
focus on the future and hold values in the present that will not necessarily provide
an immediate benefi t (e.g., Japan, China), while cultures with short-term orientation
(e.g., USA, Russia) are oriented toward the past and present and promote respect for
tradition and for fulfi lling social obligations.
The fi ve dimensions discussed by Hofstede (1980), help us understand the potential
problems of managing employees from different cultures. One interesting fi nding of
his research was the impact of culture on a countrys economic health. He found that
countries with individualistic cultures were wealthier. Collectivistic cultures with high
power distance were all poor. Cultures seem to affect a countrys economy through
their promotion of individual work ethics and incentives for individuals to increase
their human capital.
Research into the link between organizational culture and effectiveness is also
limited by lack of agreement about the appropriate measures of effectiveness. The
current literature has its roots in the early 1980s. Deal and Kennedy (1982) and Peters
and Waterman (1982) focused their attention on the strategic importance of

organizational
culture and stimulated interest in the topic. Kotter and Heskett (1992) expanded
on this by exploring the importance of adaptability and the fi t between an organization
and its environment.
Peters and Waterman (1982) argued that companies with strong culture are highly
successful. They argued that superior fi rm performance is achieved if a company
moves
away from a purely technical, rationalistic approach towards a more adaptive and
humanistic approach.
Carroll (1983), Reynolds (1986), and Hitt and Ireland (1987) questioned the
approach taken by Peters and Waterman. Owing to such results, the causal link between
strong culture and performance was seriously questioned by the end of the 1980s.
Most of the studies lack a clear theoretical conception of the nature of the
cultureperformance
link. Siehl and Martin (1990) elaborate on this view and also suggest that
culture may serve as a fi lter for factors that infl uence the effectiveness of the
organization.
These factors may differ between organizations. A more thorough understanding
of the mechanisms at play is essential for research on the culture-performance link.
Wilderom and Van den Berg (1998) found no direct signifi cant zero-order relationship
between culture and performance.
68
Taking the perceived performance and managerial leadership along with HRM
practices into account, Wilderom and Van den Berg (1998) did discover that a signifi
cant relationship exists between culture and performance. This fi nding illustrates
the importance of the development of more elaborative theories on the direction and
contingencies in the relation between culture and performance. Without such theories,
we may draw overly simple or even misleading conclusions. In light of the above
fi ndings, it is necessary to understand the relationship between HRM practices and
organizational culture.
The presumption is that more effective systems of HRM practices, which simultaneously
exploit the potential for complementariness or synergies with organizational
culture, lead to better performance and enhanced effectiveness. Indian organizations
are embedded in Indian culture, which infl uences and is infl uenced by the economic,
political and social factors, and is also subjected to global business infl uences. Sinha
and Sinha (1994), found self-realization and inventive values as the highest form
of work values in Indian culture. Organizations appreciate corporate core values of
self-realization and inventive values as they encourage and recognize innovation,
creativity and achievement.
4. Review of literature
Schuler (1992) suggests that Strategic Human Resource Management (SHRM) has
many different components, including policies, culture, values and practices. Strategic
business needs of an organization are infl uenced by its internal (which mainly consist
of factors such as organizational culture and nature of business) and external
characteristics
(consisting of the nature and state of economy in which the organization is
existing and critical success factors, i. e., opportunities and threats provided by the
industry), which are infl uenced by HR activities.
Thornhill, Lewis, Millmore, and Saunders (2000) found a potential role for
HR-centred strategies to be used to change or realign the culture of an organization.
An organization can change its culture through its recruitment strategy of replacing
managers with those from outside, restructuring the organization, downsizing the
workforce, training programmes, new reward strategies and performance management
to alter employee behaviours or reinforce emergent ones. After the economic
liberalization,
Indian organizations were under pressure to change from low-cost, indigenous,
less effi cient and outdated technology to high-cost modern technology and prepare
people to use it. This was done to develop and maintain their competitive edge in the
larger business environment (Khan, 1999).
The potential value of the employees is to be increased by collectively enhancing
and linking their skills and capabilities in tune with the contemporary requirements
of the market, and to be faster than the competitors. The success of the HRM will be
determined by its ability to harness the intelligence and spirit of people by creating
a learning climate.
Indian organizations normally direct their HRM efforts towards the development
of competencies, culture and effectiveness among employees individually or in groups
69
AOP 18(4), 2010, ISSN 0572-3043
(Singh, 2003). Organizations may use many mechanisms to achieve their HRM goals
as without competent and committed employees, an organization can achieve very
little even it has excellent technological and other resources at its command. Such an
assertion gains better credibility in the context of developing countries like India, that
is, typically in early growth stages in terms of economic development and growing
more rapidly than the traditional developed economies of Japan, North America
and Europe. This also includes most South East Asian, South Asian and some Latin
American countries.
Selection in organizations is based on non-job related criteria like attractiveness,
goal orientation, and interpersonal skills: a general lack of concern for value congruence
(Prakash, 1994). The dominant emphasis has been on the universal practice of
identifying
and improving on existing performance strategies. This practice would require
a complete reversal where congruencies of values should fi nd a place in selection and
training. Only then would it possible to achieve linkages with the values of the wider
socio-cultural context in India. In order to make an organization effective, the values of
the society and the cultural milieu should be synthesised with those of the organization
and its functioning.
Fombrun, Tichy, and Devanna (1984) expanded these premises and developed the
model of SHRM, which emphasises a tight fi t between the organizational strategy,
organizational structure and HR system. Political, economic and cultural forces are
responsible for an organizations mission and strategy. This explains these causal
relations, which form the tight fi t between strategy, organization structure and HR
polices and practices. On the basis of mission and strategy, the shape of organization is
structured, i.e., people are organized to carry out different tasks to achieve the
organizations
mission.
Hendry and Pettigrew (1992) propose that a number of internal factors such as
the organizational culture, structure (positioning of HR), leadership, level of technology
employed and business output directly contribute to forming the contents of HRM.
HRM could be seen as a menu of strategic choices to be made by human resource
executives in order to promote the most effective role behaviours that are consistent
with the organizations strategy and aligned with each other (Sparrow and Hilltrop,
1994).
The present study
The present study is to examine the relationship between HRM practices and
organizational
culture. To this end, HRM practices are viewed in terms of planning, recruitment,
selection, training and development, performance evaluation, career management and
rewards.
Organizational culture is viewed in terms of self-realization, status enhancement,
inventive values and socio-economic support. Self-realization consists of values such
as achievement, ability utilization, advancement, aesthetics, personal development,
and peace of mind. Status enhancement, one of the variables of organizational culture,
consists of values of altruism, authority, physical activity, and prestige. Inventive
values,
another variable of organizational culture, consists of values of autonomy, creativity,
70
lifestyles, risk-taking, and variety. Socio-economic support consists of work values of

social relationship and interaction, comforts, dependency, good working condition and
economic gains. The self-realization and inventive values give inner satisfaction to
a person while performing a job in an organization. The variables of status enhancement
and socio-economic support are extrinsic values, which are required in the Indian
environment. Indian society and developing societies are ridden with insecurities and
lack of resources and people generally have a history of failures. Fear of failure leads
to giving importance to socio-economic support and lack of resources lends too much
importance to status enhancement (Sinha, 1990).
The idea that individuals are capable of development rests on the conviction that
people are important and their involvement is necessary for an organization to be
effective. This conviction is translated into practice through a variety of programs that
facilitate individual development and lead to better adjustment with the environment.
In a growing economy, the emergence of the new organization and shift in the
HRM paradigm have necessitated a review of the skills, roles and competencies of
the new HR managers (Ulrich, 1997); in this new era, HRM has evolved in the
context of the globalized economic environment. As such, it represents a response
to the dramatic and continuous change that globalization has had on society and the
world of work. Those who will man the HRM will undergo a change in roles. It will
be necessary to inculcate in employees the required new skills, competencies and
motivation (Dyer jr., 1999).
The understanding of HRM practices would require a comparative study of
practices in the organizations. The relationship between HRM practices and
organizational
culture among private sector organizations is studied. This paper also studies
similarities and differences in HRM practices and organizational culture between two
different organizations in the private sector.
5. Objectives of the study
1. To investigate the various HRM practices, i.e., planning, recruitment,

selection, performance evaluation, training and development, career
management and rewards at the managerial levels in private sector
organizations.
2. To study and examine the relationships between various aspects of HRM
practices and organizational culture.
3. To fi nd whether there is any difference in the organizational cultures of the
two organizations under study.
6. Hypothesis of the study
Hypothesis 1
HRM practices will be positively signifi cantly related to organizational culture.
This hypothesis is further broken down into sub-hypotheses.

71
AOP 18(4), 2010, ISSN 0572-3043
Hypothesis 1a:
Planning (one of the dimensions of HRM practices) is positively signifi cantly
related to the dimensions of organizational culture, namely self-realization, status
enhancement, inventive values and socio-economic support.
Hypothesis 1b:
Recruitment (one of the dimensions of HRM practices) is positively signifi cantly
Hypothesis 1c:
Selection (one of the dimensions of HRM practices) is positively signifi cantly
Hypothesis 1d:
Training and development (one of the dimensions of HRM practices) is
positively signifi cantly related to the dimensions of organizational culture, namely
self-realization, status enhancement, inventive values and socio-economic support.
Hypothesis 1e:
Performance evaluation (one of the dimensions of HRM practices) is positively
signifi cantly related to the dimensions of organizational culture, namely
Hypothesis 1f:
Career management (one of the dimensions of HRM practices) is positively
signifi cantly related to the dimensions of organizational culture, namely
Hypothesis 1g:
Rewards (one of the dimensions of HRM practices) are positively signifi cantly
7. Method
This study is based on a sample of managers from two different private organizations.
At the time of selection of companies, both were profi t-making organizations. The data
was collected personally by the researcher and also by mail using convenience
sampling
with an assurance that information obtained would be kept confi dential. The sample
was obtained from all the management levels, but most of the respondents were from
middle-level management, with an assumption that they would possess an accurate and
comprehensive perception of HRM practices being employed. The sample included all
departments such as production, marketing, fi nance, HRM, etc. The sole purpose of this
sampling was to get an honest picture of HRM practices of the organization; out of 150
questionnaires distributed, 95 computed questionnaires were used for the fi nal
analysis.
72
A birds-eye view of the sample distribution is as shown below:

Organization A: (N-41)
Organization B: (N-54)
8. Description of the questionnaire
The fi rst part of the questionnaire consists of the information about the personal profi le
of the respondent.
The second part of questionnaire consist of 90 items, which are divided into two parts:
(1) 69 items concern HRM practices of the organization, and
(2) 21 items concern organizational culture.

For the purpose of measuring Human Resource Management practices, the
questionnaire
developed by Judith R. Gorden (1986) was used. This questionnaire was
standardized and the split-half reliability was calculated to be 0.81. The HRM practices
questionnaire consisted of 69 items.
The questionnaire used for measuring organizational culture was developed by
Super and Nevill (1986) and new variables were added as per the Indian requirement
by (Sinha 1982a and 1990). The items in the questionnaire belonged to four superordinate
factors. Super and Nevill (1986) considered it as a component of work salience.
The values were defi ned as the objectives that one seeks to attain to satisfy a need
(Super, 1970). However, the difference in the conceptualization of the role of value
expectations did not deter the author from taking advantage of the groundwork done by
the Work Importance Study (WIS) group. The group thoroughly reviewed the literature
on values in about a dozen countries, discussed its representative nature, and drafted
a list of twenty-one values. Of the twenty-one values, the fi rst eighteen were
considered
usable by all WIS group members. The last three were optional, and the members were
encouraged to replace them with culture-specifi c values. Sinha (1982a) identifi ed the
following three as typical values in the Indian culture (with the sample statements in
parentheses):
19. Peace of mind (Work at a place where I can have peace of mind).
20. Comforts of life (Have a comfortable life).
21. Dependency (Work at a place where I can seek help from others in personal
matters).
9. Organizations under study
Organization A
Organization A is Indias largest private sector enterprise in the area of electrical

engineering. The company has approximately 10,000 highly skilled dedicated
technicians,
engineers and managers. This organization has been producing fans, household
appliances and lighting systems for the last 50 years.
In its endeavour to achieve excellence in the quality of its products and services,
the focus on the customers remains unwavering. The TQM voyage that the company
73
AOP 18(4), 2010, ISSN 0572-3043
has embarked on continues to improve performance and competitiveness at all levels.

The KAIZEN philosophy is being practiced throughout the company to reduce cycle
time, improve productivity and quality, and eliminate waste. More than 90% of the
employees have been exposed to TQM awareness programs. In the near future, the
organizations efforts will be focused on taking up HRM pursuits to improve functional
skills and strengthen emotional ties between the organization and its employees.
Organization B
Organization B has a Personnel Department and there is no change in nomenclature.

The managerial staff and workers are provided with housing, education, free electricity,
and water. Organization B has progressive welfare practices for employees and their
families. Trust and confi dence between employee and employer are built on
personalized
relationships. Organization B provides a way of life to the human resources
it has acquired and developed to achieve the personal and organizational goals. The
way of life in the organization has created a culture, which leads to effective utilization
of human resources. Company B has one formal HR Manager. The functions
of performance evaluation, rewards, planning, recruitment, and selection and training

are performed by its Personnel Department. There is no formal career management
scheme.
10. Results and discussion
As a result of this study, it was found that a positive correlation between HRM practices
and organizational culture exists. HRM practices (namely planning, recruitment,
selection, training and development, performance evaluation, career management, and
rewards) and organizational culture (self-realization, status enhancement, inventive
values and socio-economic support) were signifi cantly positive. The study of culture
indicated that individual values play an important role in determining how well an
individual fi ts into the organizational context (Rousseau, 1990). Besides, many
researchers
have conceptualized and measured values at the individual level (Katzu, 1986;
Prakash, 1982; Rokeach, 1973; Sinha, 1990) in their attempts to understand
organizational
culture.
This study was conducted at a time when Indian organizations were facing a very
different competitive scenario compared to the past. They were facing competition from
MNCs in the new liberal and global economy on the domestic markets. The competition
was in terms of reduced cost, improved quality of products and better services.
These environmental constraints placed more pressure on managers. More often than
not, these concerns were looming large on the horizons of Indian organizations. The
fi ndings have bearing in this context.
74
Table 1
Correlations between HRM practices and the dimensions of organizational culture
Variables Selfrealization
Status
enhancement
Inventive
values
Socio-economic
support
Planning .40** .23 .44** .17
Recruitment .45** .38** .54** .20
Selection .56** .57** .44** .44**
Performance evaluation .52** .30* .47** .26*
Training and development .50** .33** .52** .31*
Career management .62** .48** .51** .45**
Rewards .62** .57** .63** .26*
Number of cases: 95; 1-tailed signifi cance *-- .01 **--- .001
Managers across organizations in the private sector strongly endorsed self-realization

(one of the variables of culture), which was signifi cantly correlated to almost all
HRM practices. These are planning, recruitment, selection, performance evaluation,
training and development, career management, and rewards. While organizations fi nd
themselves in worldwide competition, most of the individuals are striving for
achievement,
ability utilization, advancement, aesthetics, personal development, and peace
of mind. Realization or anticipation of realization of the values has resulted in better
performance. Self-realization encourages people to satisfy their achievement needs in
the work situation (Super and Nevill, 1986; Sinha, 1990). Self-realization in India came
quite close to self-actualization in Spain.
Status enhancement was strongly related to HR practices in private sector
organizations. The values loaded on this factor are authority, altruism, prestige and
physical activities. The desire for authority, altruism, prestige and physical activity has
a positive impact on the performance of managers. Managers developed a positive
attitude towards their work and contributed signifi cantly to self-realization and status
enhancement, which were the most valued factors in India.
Recruitment, selection, and performance evaluation, training and development,
career management, and rewards turned out to be strongly correlated to status
enhancement
in the private sector. Selection based on planning along with proper recruitment
leads to status enhancement. Rewards (fi nancial and non-fi nancial) were strongly
related to status enhancement. Performance evaluation (one of the HRM practices) was
strong related to status enhancement. Performance evaluation served as a key input
for administering formal organizational rewards, career growth and a tool of punishment
(Cummings, 1973). Managers working in the organizations were in an excellent
position to analyze newcomers skills and abilities and to provide feedback (House,
1995). As a purveyor of organizational expectations, performance evaluation was
critical. Through the evaluation process, those working in the organization were aware
of how well they were meeting their task and role demands (Asford and Cummings,
1983; Nelson, 1990). Clear rewards are the hallmark of an organization that effectively
socializes newcomers. In addition to their readily apparent value, the rewards provide
75
AOP 18(4), 2010, ISSN 0572-3043
challenging assignments, promotions and salary increases, etc., which give

encouragement
that provide status enhancement for managers (Chatman, 1991).
Rewards were also found to be strongly related to inventive values in private
sector organizations. Those working in the organizations with desired values of
risk-taking, variety, autonomy, lifestyle and creativity were rewarded. Rewards
encourage people to be more creative, have variety and autonomy in their work life
along with risk-taking and help to chalk out ones own lifestyle in the organization.
Similarly, training and development in private sector organizations were strongly
correlated to inventive values. So, rewards and training and development in the
private sector affect both individual esteem and lifestyle signifi cantly. Managers
have developed to take on a variety of tasks in order to perform at an optimum level.
Managers in the organization have developed to be autonomous and chalk out their
own lifestyles to be more effective in the job. This also means employees will expect
organizations to offer them opportunities to develop a portfolio of skills that enhances
their marketability. Thus, organizations will have to provide work assignments and
learning opportunities that allow for challenge and growth and self-development
(Maurer and Tarulli, 1994).
Socio-economic support consists of social relationships and interaction, comforts,
dependency, good working conditions and economic gains. Managers were indifferent
and did not care much for social interactions and relationships, whereas Indian
managers
held signifi cant value expectations concerning economic gains, good working
conditions
and comforts.
HR practices were signifi cantly related to socio-economic support in the private
sector. Through planning, recruitment and selection practices, newcomers with
stronger systems of support report fewer adverse psychological outcomes related to
job performance than do those with less support. Quality relationships with
organizational
insiders can even help newcomers to overcome the negative effects of unmet
expectations (Major, Kozlowski, Chao, and Gardner, 1995). Interacting with enthusiastic
newcomers may be good for insiders attitude and morale. The study also found
a relationship between career management and socio-economic support. People
working in the organizations look for career management that will give them the
breadth of experience that seems to be needed now, and start looking down on the
in-depth expertise of the command-centred manager.
So, a shift in culture happens, not because people have changed, but because their
beliefs about what they have to do to get ahead have changed (Gunz, Hung, 2000).
Rewards were strongly related to socio-economic support in private sector
organizations.
Litwin, Bray and Brooke (1996) felt that the nature of rewards is the key determinant
of how effective they are. Managers who emphasized recognition and encouragement
were more effective in shaping the culture of the organization or targeted
results. The reason could be that managers working in the private organizations are
experiencing a tremendous amount of change around them, thereby realizing that
socioeconomic
well-being will provide them with stability in a fast changing environment.
Furthermore, evidence from literature found the contention that similar work
experiences
result in uniformity of culture characteristics (Schein, 1987).
76
Rewards (one of the HRM practices) were strongly related to all the variables
of culture in private sector organizations. There is hardly any difference between the
two organizations when it comes to practicing rewards and training and development.
People within the organizations are either rewarded or trained for acting in accordance
with the dominant values of the organizations in India. Although this sample is not
large enough to generalize the results, still rewards send clear and consistent signals
about desired values and norms expected from people working in the organizations
(Sethia and Van Galinow, 1985).
The perception of the respondents from both private sector organizations were
compared and it was found that there was a statistically signifi cant difference in the
variable of socio-economic support between the two organizations, as shown in the
table. This means employees in organization A perceived it in a better manner in
comparison to their counterparts in organization B. Prakash (1994) felt that Indian
organizations are congruent with their cultural surroundings (which is marked by
diversities
and paradoxes). There is a need to use multiple perspectives at different levels of
analysis such as society, organization, management and the individual. It is important
that organizations continue to grow and evolve newer perspectives in terms of their
values and redefi ne their linkages with the society.
Such fi ndings provide support that market economies have the inevitable
consequences
of rendering organizations competitive. Newman (1972) predicted that the
Western work relationships are likely to appear to a great extent in Indian organizations
as well. That is, employees in the organizations are likely to become achievementoriented. There is a struggle for survival, where no one can afford to ignore an
opportunity to get optimum results. As one moves higher on the hierarchical ladder
of an organization, the individualistic orientation becomes stronger. The correlation
analysis between dimensions of HRM practices and dimensions of culture shows that
HRM practices do affect the culture of the organization. Ulrich and Lafasto (1995)
felt that HRM practices provide information and shape behaviour and experiences of
employees.
Thus hypotheses H1a, H1b, H1c, H1 d, H1 e, H1 f and H1 g are validated.
11. Conclusions
This paper has shown a signifi cant, positive and meaningful relationship between
HRM practices and organizational culture. HRM practices become the means whereby
organizational culture is created and sustained. Designing new culture requires that
HRM professionals are ahead of the cultural change curve with innovative and exciting
HRM practices. HRM has been proposed by others to be a potentially powerful lever
for shaping and changing the culture of an organization to make the organization more
effective (Schien, 1983; Ulrich, 1997).
This is a study of HRM practices in two large private sector organizations in India.
HRM practices differ between the private sector organizations. This variation provides
support to the fact that the adoption of HRM practices is contingent on the specifi c
requirements of each organization (Schuler and Jackson, 1981). There is a signifi cant
77
AOP 18(4), 2010, ISSN 0572-3043
difference between the socio-economic support variable in organizations A and B. One

fi nds no signifi cant difference in the other three variables of organizational culture in
private sector organizations, i.e., self-realization, status enhancement and inventive
values.
The results developed through inferential analysis to measure differences among
the variables of HRM practices and organizational culture in private sector organizations
are as follows:
1. The two private sector organizations showed that the perceived mean
of organization A was higher for all HRM practices.
2. The comparison of the dimension of organizational culture in the two private
sector organizations showed that employees of organization A perceived the
socio-economic support more than those in organization B.
3. It is evident that organization A showed relatively better perception of
planning, recruitment processes, selection, performance evaluation and career
management aspects of HRM practices in comparison to organization B.
4. There is no signifi cant difference between organization A and organization B in
training and development and rewards as per the response of the respondents.
5. Planning, recruitment, selection, training and development, performance
evaluation, career management and rewards are signifi cantly correlated with
all the dimensions of organizational culture.
References
ASHFORD, S. J.; CUMMINGS, L. L. 1983. Feedback as an individual resource: Personal strategies
of creating information. Organizational Behavior and Human Relations. 32.
BULLA, D. N.; SCOTT. 1994. Manpower requirements forecasting: a case example, in Human.
CARROLL, D. T. 1983. A disappointing search for excellence. Harvard Business Review. 1983, vol. 61,
no. 6, s. 7888.
CHATMAN, J. A. 1991. Matching people and organizations: Selection and socialization in public
accounting fi rms. Administrative Science Quarterly. 1991, vol. 36, s. 459484.
CUMMINGS, L. L. 1973. A fi eld experimental study of the effects of two performance appraisal systems.
Personnel Psychology. 1973, vol. 26, s. 489502.
GUEST, D.; CONWAY, N.; BRINER, R.; DICKMAN, M. 1996. The state of psychological contract in employment:
Issues in people management. London : Institute of Personnel and Development, 1996.
DAVIS, P. 1995. About time: Einsteins unfi nished revolution. New York : Simon; Schuster, 1995.
FOMBRUN, C. J.; TICHY, N. M.; DEVANNA, M. A. 1984. Strategic human resource management. New
York : Wiley, 1984.
GIBB DYER Jr., W. 1999. Training human resource champions for the twenty-fi rst century. Human
Resource Management. 1999, vol. 38, no. 2.
GORDEN, J. R. 1996. Human Resource management. Boston: Allyn and Bacon, 1996.
GUEST, D. E. 1991. Personnel Management: The end of Orthodoxy? British Journal of Industrial Relations.
1991, vol. 3, s. 137156.
HAMEL, G.; PRAHALAD, C. K. 1991. Strategic intent. Harvard Business Review. 1991, May-June,
s. 6376.
HENDRY, C.; PETTIGREW, A. M. 1992. Patterns of strategic change in the development of human
resource management. British Journal of Management. 1992, vol. 3, s. 137156.
HITT, M. A.; IRELAND, R. D. 1987. Peters and waterman revisited: the unended quest for excellence.
78
Academy of management executive. 1987, vol. 1, no. 2, s. 9198.

HOFSTEDE, G. 1980a. Motivation, leadership, and organization: Do American theories apply abroad?
Organization Dynamics. 1980, vol. 9, no. 1, s. 4258.
HUGH, G. 2000. Organizational cultures and careers. In ASKANASY, N. M.; WILDEROM, C. P. M.;
PETERSON, M. F. (eds.). Handbook of culture and climate. California : Sage publications, 2000.
HUNT, J. G. 1991. Leadership: A new synthesis. Newbury Park, CA : Sage, 1991.
KANTER, R. M. 1984. The change masters: Corporate entrepreneurs at work. London : George
Allen & Unwin, 1984.
KATZU, P. 1986. Certain factors related to member integration in a multinational organization.
[Unpublished Doctoral Dissertation]. University of Allahabad, India.
KHAN, S. A. 1999. Building organizational learning capability. Indian Journal of Industrial relations.
1999, vol. 35, no. 2, July.
LEWIN, K.; LIPPITT, R.; White, R. K. 1939. Patterns of aggressive behavior in experimentally created
social climates. Journal of social psychology. 1939, vol. 10, s. 270299.
LITWIN, G. H.; STRINGER, R. A. 1968. Motivation and organizational climate. Boston : Harvard Business
School press, 1968.
LITWIN, G. H.; BRAY, J.; BROOKE, K. L. 1996. Mobilizing the organization: Bringing strategy to life.
Englewood Cliffs, NJ : Prentice hall, 1996.
MAJOR, D. A.; KOZLOWSKI, S. W. J.; CHAO, G. T.; GARDNER, P. D. 1995. A longitudinal investigation
of newcomer expectations, early socialization outcomes, and the moderating effects of role development
factors. Journal of Applied Psychology. 1995, vol. 80, s. 418431.
MAURER, T. J.; TARULLI, B. A. 1994. Investigation of perceived environment, perceived outcome,
and person variables in relationship to voluntary development activity by employees. Journal of
Applied Psychology. 1994, vol. 79, s. 314.
NEWMAN, W. 1972. Cultural assumptions underlying U.S. Management concepts. In MASSIE, J. L.;
LUYTZES, J. (eds.). Management in International context, New York : Harper & Row, 1972.
PETERS, T. J.; WATERMAN, R. H. 1982. In search of excellence: Lessons from Americas best-run companies.
New York : Harper & Row, 1982.
POOLE, M. 1990. Editorial: HRM in an international perspective. International Journal of Human Resource
Management. 1990, vol. 1, no. 1, s. 115.
PRAKASH, A. 1982. A study of organisational socialisation of industrial worker. [Unpublished Doctoral
Thesis]. University of Allahabad, India.
PRAKASH, A. 1994. Organizational functioning and values in the Indian context. In HENERY, S. R.;
SINHA, D.; HONG, N. S. (eds.). Effective organizations and social values. New Delhi : Sage, 1994.
REYNOLDS, P. D. 1986. Organizational culture as related to industry, position and performance: A preliminary
report. Journal of Management Studies. 1986, vol. 23, s. 333345.
ROKEACH, M. 1973. The nature of human values. New York : Free Press, 1973.
ROUSSEAU, D. M. 1990. Quantitative assessment of organizational culture: The case of multiple measures.
In SCHNEIDER, B. (ed.) Organizational climate and culture. San Francisco : Jossey-Bass, 1990.
SCHEIN, E. H. 1983. The role of the founder in creating organizational culture. Organizational Dynamics.
1983, vol. 12, no. 1, s. 1328.
SCHEIN, E. H. 1985. Organizational culture and leadership: A dynamic view. San Francisco : JosseyBass, 1985.
SCHEIN, E. H. 1987. The clinical perspective in fi eldwork. Newbury Park, CA : Sage, 1987.
SETHIA, N. A.; Van GLINOW, M. A. 1985. Arriving at four cultures by managing the reward system.
In KILMANN, R. H.; SAXTON, M. J.; SERPA, R; Associates (eds.). Gaining control of the corporate
culture. San Francisco : Jassey-Bass, 1985.
SIEHL, C.; MARTIN, J. 1990. Organizational culture: A key to fi nancial performance? In SCHNEIDER, B.
(ed.). Organizational climate and culture. San Francisco : Jossey-Bass, 1990.
SINGH, K. 2003. Strategic HR orientation and fi rm performance in India. International. Journal of Human
Resource Management. 2003, vol. 14, no. 7, s. 530554.
79
AOP 18(4), 2010, ISSN 0572-3043
SINHA, J. B. P.; SINHA, D. 1994. Role of social values in Indian organizations In KAO, H. S. R.; SINHA, D.;
NG SEK-HONG (eds.). Effective organizations and social values. New Delhi : Sage, 1994.
SINHA, J. B. P. 1982a. The Hindu (Indian) identity. Dynamic Psychiatry. 1982, vol.15, s. 148160.
SINHA, J. B. P. 1982b. Power structure, perceptual fame and behavioural studies in dyadic relationship.
In RATH, R. N.; ASTHANA, H. S.; SINHA, D.; SINHA, J. B. P. (eds.). Diversity and Unity in Crosscultural
Psychology. Lisse (The Netherlands) : Swets & Zetlinger, s. 308315.
SINHA, J. B. P. 1990. Work culture in the Indian context. New Delhi : Sage, 1990.
SINHA, J. B. P. 1987. The clinical perspective in the fi eld work. Newbury Park, CA : Sage, 1987.
SPARROW, P. R.; HILTROP, J-M. 1994. European Human Resource Management in Transition.
London : Prentice Hall, 1994.
SUPER, D. E. 1970. Work Values inventory. Chicago : Riverside, 1970.
SUPER, D. E.; NEVILL, D. D. 1986. The Salience Inventory: Theory, Applications and Research. Palo
Alto, CA : Consulting psychologists press, 1986.
THORNHILL, A.; LEWIS, P.; MILLMORE, M.; SAUNDERS, M. 2000. A Human Resource Strategy
Approach: Managing Change. Harlow : Pearson Education, 2000.
ULRICH, D.; LAFASTO, F. 1995. Organizational culture and human resource management. In FARRIS,
G. R.; ROSEN, S. D.; BARNUM, D. T. (eds.). Handbook of human resource management.

Oxford : Blackwell Publishers, 1995.
ULRICH, D. 1997. Human Resource champions. Boston : Howard Business School Press, 1997.
WARD, D.; BECHET, T. P.; TRIPP, R. 1994. (eds.). Human Resource Forecasting and Modeling. New
York : Human Resource Planning Society, 1994.
WILDEROM, C. P. M.; Van den BERG, P. T. 1998. A test of leadership culture performance model within
a large Dutch fi nancial organization. Paper presented in the annual meeting of the Academy of
Management, San Diego, CA.
WRIGHT, P. M.; SMART, D. L.; McMAHAN, G. C. 1995. Matches between human resources and strategy
among NCAA basketball teams. Academy of Management Journal. 1995, vol. 38, s. 10521074.
A STUDY OF HRM PRACTICES AND ORGANIZATIONAL CULTURE

IN SELECTED PRIVATE SECTOR ORGANIZATIONS IN INDIA
Abstract: This paper examined the relationship between HRM practices and organizational
culture in private sector organizations operating in India. Organizational culture has
developed in the Indian environment along with global work values. This study is based on
a survey of 95 respondents working in two private sector organizations. Although the HRM
practices in these organizations differ a lot, there is a signifi cant relationship between HRM
practices and organizational culture.
Keywords: Human Resource Management; Organizational culture
JEL Classifi cation: Z1
80
ANNEX I
Table 1
Comparison of two private sector organizations based on the dimensions of HRM
practices
AB
Variables Total Mean S.D. Mean S.D. t-value
Planning 50 31.46 6.96 28.44 3.65 2.73*
Recruitment 45 27.68 5.23 24.56 3.85 3.36**
Selection 30 20.39 2.90 18.13 3.37 3.44**
Performance evaluation 65 42.59 5.32 37.98 5.01 4.32**
Training & development 45 30.05 3.62 29.30 4.69 0.85
Career management 50 25.07 5.41 21.72 4.34 3.35**
Rewards 60 34.83 6.78 34.17 6.14 0.50
**p< .01
ANNEX II
Table 2
Comparisons of two private sector organizations based on the dimensions of vulture
AB
Variables Mean S.D. Mean S.D. t-value
Self-realization 22.29 3.30 22.41 4.25 -0.14
Status enhancement 12.66 1.65 11.87 3.20 1.44
Inventive values 14.20 1.95 14.63 2.72 -0.87
Socio-economic support 21.10 3.02 18.83 3.70 3.20**
**p< .01
THE IMPACT OF HR
M PRACTICES ON ORGANIZATIONAL PERFORMANCE: A GENERAL MODEL AND A
TEST FOR URUGUAY
INTRODUCTIO
N
Independently of the strategy followed to define the relevant HRM indicators, the empirical literature
to date has generally
provided with supportive evidence on the existence of positive relationships between at least one
specific dimension of
firms economic performance and certain Human Resources Management (HRM) practices
(Brewster and Mayrhofer, 2012
provide a comprehensive updated review). However, only few multivariate analyses have been
performed considering at the
same time the configuration of these practices, the contingency variables of the organization,
together with the institutional
context in which these practices are implemented and their impact on organizational performance.
This paper introduces a
testable general theoretical model and summarizes the results of a series of empirical analyses,
using data for Uruguay.
Recent institutional changes that have taken place in Ur
uguay starting in 2005 provide a unique opportunity to analyze
HRM under different contexts of industrial relations, collective bargaining and increasing
unionization. The general model
introduced links the probability of attaining a certain level of firm performance to Human Resource
Management (HRM)
practices, while controlling for diverse characteristics related to unionization as well as for other
contingency variables.
Particular emphasis is also set on
the existence of complementarities among practices. Within empirical studies, this issue
involves including HRM practices interacting individually or by subsets, usually in
bundles/configurations previously
identified by different statistical methods.
T
he Uruguayan evidence is modeled along these lines, based on a sample of 274 companies with
more than 50 employees,
most of them SMEs according to international standards but nonetheless the largest firms in the
country.
The next section is devoted to review the literature on these two topics that in turn justifies the
specification of the empirical
model and its application to Uruguay. A description of the information set and the definition of the
variables that are
included in Section 3. In Section 4 the outcome of the estimated model is discussed while the most
relevant conclusions are
summarized in the final section.
2. LITERATURE REVIEW
2.1. HRM and Organizational Performance
The reported evidence for the US (see Gerhart, 2005) suggests that labor productivity and/or
organizational performance are
positively related to diverse features of HR management systems such as recruitment and selection
(Koch y McGrath,
1
1996); training programs (Bartel, 1994); performance evaluation (McDonald and Smith, 1995);
compensation and benefits
(Gerhart and Trevor, 1996; Gmez-Meja, 1992); and innovative practices (Delaney and Huselid,
1996; Huselid, 1995).
Similarly, some research has shown that firms characterized by the use of the above practices
outperform those that display
inflexible HR strategies within the same economic sector (Barton, 2004; Black and Lynch, 2001;
2004; Ichniowski
et al.
,
1997; among others), even in the case of small and medium-size units (Way, 2002). Becker and
Gerhart (1996), Boxall and
Purcell (2003), and Gerhart (2005; 2007a,b) have made comprehensive reviews of the seminal work
on the relationship
between HRM practices and firm performance as done by Arthur (1994), MacDuffie (1995), and
Ichniowski
et al.
(1997) in
manufacturing and by Batt (2002) in the service sector. Huselid (1995), in turn, conducted an early
and influential study that
introduced the concept of complementarities as applied to HRM practices (Milgrom and Roberts
1990). The existence of
positive linkages between at least one specific dimension of firms economic performance and
certain HRM practices has
also been found in small and medium size units (Way, 2002).
From a theoretical point of view, d
ue to its strong emphasis on a subset of these practices that would operate as best
practices, supposedly superior to more traditional ones (and with a theoretical rationale behind it),
much of this literature
has been equated with a universalistic perspective. The logic posed assumes that the relationship
found can be generalized
to any context, developing a set of High Performance Human Resources Practices (HPP) with a
progressive impact on
organizational performance (e.g. Delaney and Huselid, 1996). Universalists such as Pfeffer (1995)
and Osterman (1994)
argue that greater use of high performance practices such as participation and empowerment,
incentive pay, employment
security, promotion from within the firm, and training and skill development result in higher
productivity and profits across
organizations.
The contingency and configurational approaches, instead, argue that firm performance is dependent
on the effective
combination of some HRM practices and how these practices are bundled together in
organizations that have distinct
characteristics. The literature has examined the impact of different bundles on different levels and
dimensions of outcomes
(Arthur, 1994; MacDuffie, 1995; Ichinowski
et al.
, 1997; Stavrou and Brewster, 2005), in which selected or specific HRM
practices have a consistent configuration that reinforces their impact. These bundles are at times
used to define diverse
work systems (Guthrie, 2001; Guest
et al.
, 2003). In some of this literature, though, there is still a normative tone on
what should be the best HR practices (Delery and Doty, 1996; Doty
et al.
1993; Martn-Alczar
et al.
, 2005), as in the preexisting management profiles approach that proposes ideal types. In this case, the focus had been
set on the
characterization of management profiles according to the presence/absence of specific practices
within the mentioned
categories and on the assumption that they have a differential impact on performance (Druker and
White, 1995; Edwards,
2
1979; Gowler and Legge, 1986; Labadie, 2005; Monks, 1992; Rodrguez
et al.
, 2003). Delery and Doty (1996) compare
practices within two configurational systems, namely the internal and the market systems. Huselid,
Jackson, and Schuler
(1997) cite activities such as compensation systems, team-based job designs, flexible workforces,
quality improvement
practices, employee empowerment, and planned development of the talent required to implement
competitive strategy and
achieve operational goals.
Ichniowski
et al.
(1997) explain that when HRM practices are combined in different forms, the effects on
organizational
performance are much greater than when practices are explored individually. In fact, MacDuffie
(1995) argues that the
appropriate unit of analysis for studying the strategic link between different HRM practices to
performance does not involve
individual activities as much as interrelated and internally consistent practices, called bundles. He
explains that a
bundle creates the multiple, reinforcing conditions that support employee motivation. Along the
same lines of
argumentation, Perry-Smith and Blum (2000) suggest that HR bundles capture broader and higherlevel effects than those
captured by focusing on individual policies and are particularly appropriate for investigating firm-level
effects.
A
strand of this literature has argued that the relevant configurations of practices vary across
organizations depending on
several dimensions, the focus being mostly set on divergences in management and distinct
competitive advantages, that are
in turn mirrored in different organizational strategies (a brief recent discussion on the topic can be
found in Brewster, 2007).
Schuler and Jackson (1987) distinguish among organizational strategies founded on either cost
reduction, quality
improvement or innovation activities. The authors argue that employees are required to play different
roles depending on
the type of strategy and thus the best HR practices would be those that are most suitable to serve
the purpose.
1
HR managerial strategies displayed by firms seeking to improve

organizational performance have been classified in two
broad types depending on their intrinsic character being oriented towards the increase of human
resources skill-levels or
else of the degree of involvement of workers in the organizational strategy and the performance of
the firm. These two
categories are discussed in the literature under different denominations, such as control and
commitment-oriented
practices (Walton, 1985); efficiency and strategy related HRM activities (Fombrun
et al
., 1984); or calculative and
collaborative HR practices (Gooderham
et al
., 1999). The subsets of practices with the highest weight in a particular
bundle built by Factor Analysis are generally of either one type or the other and thus the
corresponding bundle is classified
in accordance. However, it is at times the case that the bundle has a mixed and/or ambiguous
character due to the fact that
1
For example, non-professional recruitment and selection methods may be optimal for firms with competitive
advantages stemming from
an efficient management of costs, even at the expense of the quality of the goods and services supplied. In
contrast, skilled workers that
are highly committed to the firm would fit a strategy rooted on continuous improvement and innovation activities
and may hence require
the use of professionalized and strategically-oriented hiring practices.
3
efficiency and strategically oriented HRM activities are both key components of the resulting
construct. Gooderham
et al.
(2008) propose to denote these configurations as intermediary bundles.
Bundles that are
usually found to be relevant are: selective recruitment, training and incentive pay, both of a
calculative and
collaborative nature (e.g., Black
et al.
, 2003;
Galia, 2006;
Gooderham
et al
., 2008; Huselid, 1995;
Ichinowski
et al
.,1997;
Katou, 2008; Stavrou and Brewster, 2005). Evaluation systems, both aimed at rewarding
performance and or training
monitoring, are also frequently found to be relevant (e.g., Galia, 2006; Gooderham
et al
., 2008; Huselid, 1995; MacDuffie,
1995; Stavrou and Brewster, 2005); team-working (e.g., Galia, 2006; MacDuffie, 1995); as well as
management-workforce
cooperation, shared values, communication and other features that should improve commitment of
workers to the
organization (e.g., Huselid, 1995; Katou, 2008; MacDuffie, 1995).
International evidence supports the existence of positive linkages
between most of these HRM bundles and organizational
performance (Brewster and Mayrhofer, 2012). Research also suggests that improvements in
performance are associated to
the use of several of the single practices within these bundles, such as those related to skill and
cognitive recruitment,
training or incentive pay (e.g., Beer
et al.,
1985; Black and Lynch, 2001; Delaney and Huselid, 1996; Fombrun
et al.,
1984;
Guest
et al
.
, 2003; Guthrie, 2001; Jackson and Schuler, 2000; Walton, 1985).
2
High-commitment HR practices identified as

drivers of performance include selection and training activities that emphasize values and human
relations; behaviour-based
promotion and rewarding; contingent pay systems; wages set above their market-level; among
others (Lengnick-Hall
et
al
.,
2009).
However,
much of the existing empirical evidence on the actual adoption levels of HRM, as Godard (2004, pp.
6)
convincingly argues, shows that many workplaces in effect combine a number of traditional
personnel practices coupled
with intermediate levels of adoption of HPPs and none of these studies can fully account as to why
most employers would
settle on the partial adoption of some of these high-level HPPs. It is recognizing that the significant
gains they yield could
be partially offset by their associated costs, that are rarely reflected in the performance measures
used by researchers
(Cappelli and Neumark 2001: 743) that some light can be shed. These costs, in turn, are strongly
dependant on certain firm
characteristics and its environment as argued in Godard (2004, pp. 20) and in particular in the role
played by unions.
The degree of influence
of unions at the firm has indeed been analyzed as an additional contingent dimension (e.g., by
Brewster, 1995), that has at times been considered jointly with the organizational strategy (e.g., in
Gooderham
et al
., 2008).
The topic is usually examined in the industrial relations literature in terms of either the union
substitution effect or the
2
An extensive review of this literature can be found in Boselie, Paauwe and Jansen (2001).
4
mutual gains hypotheses, with some consensus within the literature that High Performance HRM
practices would operate
as a substitute to unions (Kochan, 1980). Under that frame, powerful or militant unions with a poor
relationship with
management are likely to have a negative impact on the adoption of High Performance HR
Practices (HPP), at the extent
that organizations characterized by large union militancy might exhibit a significantly lower likelihood
of undertaking any
HPP (Wells, 1993). However, the assumption has little empirical support except in the case of
activities related to pay and
communication methods that give direct voice to workers (Godard, 2009; Machin and Wood, 2005),
or the use of word of
mouth as a recruitment source that has become a prominent practice in unionized frameworks, as is
the case of India
(Budhwar & Khatri, 2002). Some authors have argued that the implementation of some HR practices
may in contrast
generate a mutual gain with unions playing a more partnership-oriented role instead of their
traditional adversarial
positioning (see the review in Gill, 2009).
The contingent character of management has been also associated to other organizational
characteristics, such as the firms
economic activity (e.g., in Bloom and Van Reenen, 2007); sales market (e.g., in Osterman, 1994);
societal form (e.g., in
Rajan and Wulf, 2006); size (e.g., in Jackson and Schuler, 1995); and ownership (with respect to its
family/non-family
nature, as in Bertrand and Schoar, 2006, or its national/multinational character, as in Bloom
et al
., 2009). Further, firm size,
industry, the presence of unions, labor-management conflicts, and bureaucratic hiring and
termination procedures all appear
to have some relationship with external labor arrangements (Masters and Miles, 2002).
Small organizations and family businesses are more likely to operate in an informal and flexible
manner than larger firms,
replicating these patterns in HRM practices (Bacon
et al
., 1996; Koch and McGrath, 1996). The national/multinational
character of firms is also considered as a differential feature (Kostova and Roth, 2002; Gmez and
Snchez, 2005).
Given the above, t
he universalist view on the role of HR management and the optimality of specific practices in terms
of
firm performance seems to be strongly questioned as a suitable explanation of actual trends in the
US, Canada, England and
some European countries. However, no generalization whatsoever can be made for Latin American
countries, for which the
lack of knowledge and quantitative studies is critical, even at the basic descriptive level. Very limited
valid empirical
research has been published, with the exception of Elvira and Davila (2005) and Davila and Elvira
(2009), who compile
cases and narratives of HRM practices in the region, but no quantitative empirical test.
Given the scant knowledge
on Latin America, a general multivariate model is herein introduced, that stylizes the
relationships among these constructs, depicted in Figure 1. As a general specification, it allows to
provide valid tests and
answers to research questions such
as:
1)
What is the impact of unions on organizational performance when controlling for HRM practices ?
2)
Are there complementarities among HRM practices?
3)
Are there complementarities among different bundles of HRM practices?
4)
Are there complementarities or substitution effects among HRM and Unions?
5)
Do these effects differ depending on the type of HRM practice (calculative or collaborative)?
6)
Do these effects differ depending on the levels of Union influence?
7)
How do they change when union influence changes?
8)
Do they differ by type of performance indicator?
9)
Do they differ by levels of institutionalization of collective agreements?
Figure
1. GENERAL MODEL OF HRM PRACTICES AND ORGANIZATIONAL PERFORMANCE
As part of a
research agenda, this model can be tested with evidence from Uruguay. The new labor relations
setting and
higher union influence at the societal level described in the next section, not only provides an
interesting Latin American
case but it also constitutes a unique statistical experiment to test some of the traditional
hypotheses that link HRM and
unions. These relationships have been traditionally tested for more developed countries- in a
particular context of
unionization or at best comparing patterns between countries with different degrees of union
influence. Instead, the case of
Uruguay allows a test for the same set of firms in two distinct scenarios of unionization and collective
bargaining
6
mechanisms -a period of declining union density with firm-level negotiations and a period of
increasing union power with
mandatory sector level collective bargaining.
Preliminary answers to the above research questions have been provided by
using multivariate models have been already
presented elsewhere, indicating the relevance of complementarities, the importance of distinguishing
between calculative
and cooperative bundles to model the relationship to union behavior and organizational strategy, but
the estimation of the
full model poses some methodological limitations imposed by the Uruguayan sample size, briefly
referred in the next
section.
2.2 The Uruguayan Case
2.2.1. HRM practices
Although the empirical research on HRM in Uruguay is still very scant, it has nonetheless brought
forth the existence of
several regularities. A first worthy finding refers to the apparent progressive professionalization of
HRM practices among
medium and large firms that took place along the last two decades, the drivers of such trend not
being yet clearly identified
(Font, 2010; Labadie, 2005).
The heterogeneity of HRM practices reported in Font (2010) for 2007 is in sharp contrast to
the simple management profile that prevailed in the 1990s, even among the largest companies,
characterized by employeremployees relations aimed at short-run goals; infrequently observed formal systems of performanceevaluation; and
administrative/bureaucratic HR departments (Labadie, 2005; Rodrguez-Gust
et al.
, 2003).
According to these studies, the most widespread practices, both currently and in the past, are
related to recruitment and
training, as opposed to the use of monetary premia based on individual/team performance or
sophisticated performance
evaluation systems. However, the patterns differ among firms depending on several features, such
as family, national or
corporate ownership; size; sales market; and economic sector; while it also depends on the firm
having or not a HR
department. A higher degree of formality and professionalism of HRM is found among large
corporations, non-familyowned firms that have a formal HR division, operating in the service sector and/or oriented to the
international market
(Rodriguez-Gust
et al.
2003; Font, 2010).
The relationship between economic/organizational performance and HRM has been explored by
Font (2010)
and by the
authors of this paper
(references available)
using two distinct methodologies. Measured as the self-ranking relative to its
competitors in terms of profitability; labor productivity; and quality of the products/services, firm
performance is examined
in relation to individual HRM practices (recruitment; training; performance evaluation; and monetary
payments). Font
further considers several additional features that are grouped using factor analysis to build indicators
of best practices and
7
despite the general conclusion points at professional HRM being matched to an improved firm
economic/organizational
performance, the four configurations obtained cannot be unambiguously ordered in terms of best
practices, except for
firms in the cluster denoted as low-profile.
Previously,
Labadie (2005) had hypothesized that the linkages between HRM practices and performance are
influenced by
the overall institutional framework of labor relations and particularly by the role played by HR
departments in relation to
trade unions. The additional insights provided in Font (2010) also point in that direction while they
further suggest that the
structure of bargaining and its continuity in time have also a major incidence.
2.2.2. HRM and Industrial relations in Uruguay
Major institutional changes have characterized the industrial relations system in Uruguay.
Starting in 1985 Uruguay s
unique system of Wage Councils was re-instituted after almost 15 years along which collective
bargaining was absent given
that the 1973 military coup had banned unions. The traditional system operated mainly through a
system of trilateral
negotiations unions, employers representatives and government - within wage councils by
industry. Minimum wages by
job category were set through collective agreements and endorsed by the government to all firms
within the sector. The
system implied that for most SMEs the level and timing of wage setting were located outside the
boundaries of firm
decision-making, by the negotiators of the larger companies that were represented in the employers
associations (see
further details in Cassoni
et al
., 2004). Along these lines, the HR department was only strategically relevant for those large
firms with powerful unions that frequently operated in concentrated sectors (Labadie, 2005). Unions,
in turn, were almost
exclusively interested in setting wage levels, in accordance with the intermediate degree of
centralization of the system and
the highly inflationary entourage. This was particularly the case of the manufacturing sector, which in
1985 employed
almost half the labor force in the private sector, of which one third were union members (Cassoni
et al.
, 2004).
In 1991 there was a significant change. The government stopped participating in bargaining and
hence collective
agreements bound only those firms and unions that were actually represented in the negotiation. As
a result, union density
within the private sector dropped sharply and many agreements started to be bargained at the firm
level (for details on these
changes and their effects on the labor market regarding employment, mobility, wages, as well as on
firm economic
performance, investment and profitability, see Cassoni
et al.
, 1996; 2000; 2004; 2005).
In 2005, with the advent of a newly elected government, the traditional tripartite industry-level
negotiation system was reinstituted, while compulsory bargaining was also extended to all services, commerce, rural workers
and activities with a
traditionally high informality degree. As a result, the number of firms that set wages internally
decreased sharply. Union
8
membership increased about 40% between 1997 and 2007 further fueled by the prevailing context of
sustained economic
growth, employment formalization and wage increases after the 2002-economic crisis, one of the
most significant in the
history of Uruguay (Bianchi
et al.
, 2011).
The joint analysis of the hypotheses summarized in Figure 1 and the answers to the research
questions posed in the previous
section has been attempted in previous studies (

reference withdrawn to secure blind review
) given the advantages of these
institutional changes in Uruguay. However, the estimation can only be robust if performed using a
large-sized sample so
that the degrees of freedom are still sufficient to validate the statistical inference. Further, the high
collinearity that is
introduced among regressors also generates increases in the variance of estimates that may
prevent the identification of
actual effects. The use of bundled practices poses additional methodological challenges linked to the
introduction of
endogeneity biases, forcing the use of full-information estimation methods that further reduce the
degrees of freedom.
Therefore, the full analysis of all the hypothesized effects has to be undertaken sequentially.
I
n this paper we thus focus on the identification of significant bundles of practices and on the
quantification of their impact
on firm performance, as measured by labor productivity. We also include individual practices seeking
to contribute to the
discussion on their merit relative to that of configurations as productivity drivers. In doing so, and
following the proposed
model, we control for diverse firm characteristics, the main strategy that is the source of the firms
competitive advantage;
and the degree of union influence and its evolution with respect to 2004.
3. DATA,
DEFINITION OF VARIABLES AND BUNDLES
The information used stems from the Survey on Labor Relations and HRM Practices (SLR),
performed in 2007 to a
sample of 274 medium and large enterprises, representative of the universe of 1172 firms with 50
and more workers that
belong to Industry; Construction; Commerce; and Services.
3
The sample was selected through a stratified (economic sector

and size) sampling model. The data relate to a wide range of HRM practices, many of which are also
referred to 1999-2001,
and other operational characteristics of the firm, its main sales market and the current and past
institutional setting of labor
relations.
3
Encuesta de Relaciones Laborales y Prcticas de Recursos Humanos a nivel de Empresa, Universidad ORT
Uruguay
- Equipos
Mori, 2007.
9
Data were collected using the CRANET questionnaire through personal interviews.
4
The answers provided by the

respondents allow for defining binary indicators that state if a HRM practice is used or not by the firm
or else categorical
variables that differentiate between the intensity with which a practice is used within a 5-value likert
scale (where 1
corresponds to the absence of the HRM activity and 5 to its permanent use). Given the subjective
nature of the survey, it
was decided not to differentiate between degrees of intensity that correspond to the two top/bottom
strata (that may
introduce distortions into the analysis as shown by Fowler, 2009 and by Kanouze and Elliot, 2010).
Hence, the original
variables become categorical with 3 possible values instead of 5.
The resulting indicators reflect the degree of usage of 130 individual HRM practices. In many cases,
however, the same
HRM activity gives rise to four different individual practices, one for each type of employee
managers; technicians and
professionals; administrative staff; and blue-collar workers. Practices are classified in 7 subsets that
match particular
dimensions of management hiring (recruitment sources, selection profile sought, selection
methods); training (with
different goals); performance evaluation (aimed at distinct objectives); pay (wage setting
mechanisms, regular benefits
linked to diverse aspects and contingent extraordinary premia); communication flows and channels
(collective and/or
individual, involving employees in different occupations and referred to distinct topics);
formalization/organizational
culture (the existence of unwritten/written statements on eight organizational aspects); and
organizational characteristics of
HRM (the existence and type of HR department; the qualification and roles of HR managers; and the
degree of outsourcing
of practices). Practices are further re-defined by jointly considering those with a shared character
(e.g., recruitment through
advertisements in newspapers or web pages, public pools or among unsolicited workers give rise to
a unique HRM activity)
and also by ignoring differences by type of worker. The definite set involves 71 HRM practices (Table
1).
Factor Analysis is performed over different sets of practices
controlling for sample design effects to avoid the introduction
of biases (Fazio
et al.
, 2008). Significant factors (that are therefore kept) are those with an associated eigenvalue that is
not
below 1. These factors are afterwards transformed into orthogonal constructs using the Varimax
method.
5
The use of the redefined set of HRM activities together with those single practices for which the previously estimated
loadings differ
4
The CRANET questionnaire has been developed by an international team of scholars doing research on
human resource management
over the past 15 years (see Brewster, Mayrhofer and Morley, 2004 for details on the questionnaire and its
methodology). The
questionnaire is structured with eighty composite closed-ended questions, each of which presents a number of
options/items, attempting
to cover all facets of HR management. The unit of analysis of the questionnaire is the organization and the
respondent is the highestranking corporate officer in charge of human resource management. Besides the regular CRANET
questionnaire validated in Spanish, an
additional module added questions on HRM and union practices in 1999-2001.
5
These analyses are reported in working papers whose citation is withdrawn to secure the blind review process.
They are available upon
request and available on the web. The analysis is first performed over all original practices (130) and 29
significant factors are identified
that account for 84% of the total variance. Most of them (26) are just a grouping of the same practice referred
to each of the four
occupational types considered. We therefore perform a robustness check by factor analyzing practices within
each of the 7 above-listed
HRM dimensions and obtain fully consistent constructs. In both cases, the total number of identified bundles is
too large if they are to be
included in a multivariate model for firm performance.
10
substantially, leads to the identification of 15 significant constructs that account for 84% of the total
variance and that are
generally consistent with those obtained using the original set of practices, although with an
enlarged prevalence of bundles
that involve HRM activities of both an efficiency and strategic nature (the estimation outcome is
reported in the Appendix).
Table 1. HRM practices in Uruguay
Dimension
HRM practices
Hiring
Recruitment
sources
Specialized agents (educational institutes and specialized agencies, any
occupation); qualified word of mouth information (any occupation; blue-collars;
managers); internal to the firm (any occupation; blue-collars; managers); others
(adverts, public pools, unsolicited applications, any occupation)
Selection profile
Identification w/firm values; team-work; current skills; proven experience;
future
performance; long-lasting work relation
Selection method
Scientific methods (
specialized panel; scientific tests); personal interview;
personal references
Training
Goal sought
Improve technical skills; improve team-work abilities; access to monetary premia;
enhance the identification with firm values and the comprehension of the business;
develop a career within the firm through the acquisition of technical/attituderelated abilities
Evaluation
Goal sought
Improve efficiency; task accomplishment; career development; communication;
wages setting
Pay and
Monetary
Incentives
Wage setting
mechanisms
Firm-level; collective bargaining (any occupation; blue-collars &
white collar);
s
e
ctor & firm-level collective agreements.
Benefits
Future-oriented; large
share of pay; linked to seniority; linked to performance;

linked to organizational goals
Premia
Firm shares (managers; other occupations);
contingent monetary bonuses
Communication
w/workers
Channels
C
onsultative board; employees representative body; to teams; to individuals;
unwritten/written
Subjects
Organizational strategy; financial results; work organization (managers, other
workers)
Formali
zation/
Organizational
Culture
Statements
Corporate mission; strategy; HR strategy; values; ethics;
social responsibility;
diversity; communication
Formalization
Written (all; at least one; at least on corporate mission, strategy & values);
unwritten (at least one)
Organi
zational
Characteristics
of HRM
HRM carried out
Through a formal HR department; fully and/or partially outsourced
HR dept.profile
Professional (updated); bureaucratic (administrative
)
Profile of HR
manager
Qualification-level; involvement in policy design; participation in decision-making
(member of Board of Directors)
Source: Survey on
Labor Relations and HRM Practices.
Factor analysis performed over the new set of HRM activities leads to the identification of 15
significant constructs that
account for 84% of the total variance and that are generally consistent with those obtained using the
original set of practices,
although with an enlarged prevalence of bundles that involve HRM activities of both an efficiency
and strategic nature
Purely calculative bundles (2) refer to qualified word of mouth and internal to the firm recruitment
sources involving any
type of worker, blue-collars and managers. Collaborative factors (6) refer in turn to
formalization/organizational culture (2);
communication flows (2); and contingent pay (2). The largest complementarities found among
organizational culture
11
aspects relate to its degree of formalization and to the existence of statements on corporate mission,
strategy and values.
Practices related to communication flows on organizational strategy, work organization and financial
results complement
each other to a different extent depending on whether they involve managers or workers in other
occupations. Regular
benefits as an important share of wages regardless of them being linked to seniority or to
performance (both current and in
the long-term) are bundled together while contingent annual premia materialized in both monetary
bonuses and firm shares
(differentiating managers from workers in other occupations) give rise to another construct.
T
wo additional bundles are identified and refer to pay practices, but their theoretical categorization as
strategic or
efficiency-oriented is unclear (they may even be thought of as intermediary). One configuration
suggests that collective
bargaining effects are reinforced when undertaken at the sector level and when negotiations involve
blue-collars and
administrative employees while the other construct reflects the gains that stem from collective
negotiations at the level of
the firm besides centralized bargaining. Under the assumption that wages set at the firm are used as
a means to promote
increases in productivity (as claimed by the Efficiency Wages theory), even if done through collective
negotiations, the
bundles may be classified as efficiency oriented (and would be expected to have a negative impact
on productivity).
Nevertheless, the configurations may also be assigned a strategic character whenever wages set at
the firm (and hence above
the negotiated level) are used as a means to promote workers commitment to the company.
The remaining five significant constructs are intermediary in nature. The reinforcement of evaluation
and training aimed at
improving efficiency and commitment levels and the preference for applicants with a diversified
profile suggests that both
HR policies and practices complement each other all. A larger weight assigned to a high degree of
alignment of new
workers with the organizational strategy/goals and the likelihood of establishing a long-lasting
relation point, however, at
an enhanced relevance of strategic over efficiency oriented profiles in recruitment.
The last two factors involve practices linked to more than one HRM dimension. A first bundle gathers
organizational
characteristics of HRM (such as the existence of a HR department and the participation of HR
managers in policy design),
together with scientific selection methods and the use of written communication channels,
particularly on work organization
with non-managers. The bundle is thus suggested to be mostly aimed at improving efficiency levels.
The second bundle
includes the existence of communication flows (written and/or unwritten), the use of non-professional
recruitment sources
(adverts, public pools and unsolicited applications) and selection methods (based on personal
references). Its character is
thus linked to the use of less professionalized hiring practices combined with a strategically-oriented
communication policy.
12
The
estimated configurations are generally consistent with those reported in the international literature
(see, e.g.,
Gooderham
at al
., 2008). However, in the case of Uruguay efficiency-oriented HRM activities would complement each
other to a negligible extent compared to the reinforcing impact that stems from their interaction with
commitment-related
activities and also to the gains associated to the combined use of collaborative practices.
4
.
THE IMPACT OF HRM PRACTICES ON ORGANIZATIONAL PERFORMANCE
F
or the purposes of this paper economic performance of firms was measured by means of their
relative ranking in terms of
their level of labor productivity with respect to the sectors average (Model 1 shows alternative
measures). The indicator is
defined as equal to (-1) whenever the firms productivity is below the average; it is equal to 0 if
similar to the sectors
average level; and it is equal to 1 whenever the firm outperforms its competitors. Firms that are selfranked below the
sectors average are only 6% of the sample, implying that most small enterprises, excluded from the
sample, have a
significantly lower productivity level than medium and large firms. HRM activities are proxied by the
15 bundles estimated
in the previous section and also by 11 individual practices that are not included in any bundle with a
sufficiently significant
associated loading.
6
The model includes a set of binary variables that account for differences across firms in terms of
economic sector (industry
and construction, commerce and services); size (medium and large), national and family ownership
(full-national or not;
family-owned or not); corporate character; and main sales market (local or international). Firms in
commerce are a
comparatively smaller share of the sample, in line with the sectors size-composition (biased towards
micro and small units)
while the prevalence of national versus foreign companies is a most expected regularity. In contrast,
the distribution of firms
according to all other characteristics is quite balanced
7
.
The degree of union influence at the firm (low or high) and its evolution with respect to 2004 are two
further controls
included in the model. Even though powerful unions are present in only 12% of firms, one third of
respondents perceive that
their influence has indeed increased. Lastly, we also acknowledge for differences that stem from
firms strategy as a source
of competitive advantage, distinguishing between six different strategies: marketing (advertising and
services provided to
clients); innovation (new products and/or brands; novel merchandising and marketing practices);
costs and prices
management; HR efficiency levels (qualified managers and skilled workforce); HR commitment to
the company (shared
knowledge of organizational mission, values, etc. and high involvement with organizational goals);
and overall
organizational performance (as reflected on factors such as strategic cooperation; systematic
improvement; operational
6
An in-depth description of these variables can be found in a working paper available upon request and not cited
to secure the blind
review process.
7
The composition of the sample by diverse characteristics is available upon request.
13
efficiency; and explicit individual, team and overall goals). The composition of the sample according
to this aspect shows
that around 60% of firms have competitive advanatges that originate in a high HR efficiency or
commitment to the
organization, while at the other end only 10% of companies root their success on innovation
activities.
Given the definiti
on of the dependent variable, an ordered logit regression model is specified and estimated by FullInformation Maximum Likelihood controlling for sample design effects.
8
No differences in productivity are found across

firms according to the national or family ownership and corporate character of the organization. Even
though no gains or
losses are found associated to one specific major source of competitive advanatge, the most
productive organizations are
those that exhibit advantages, at least to a certain extent, on all dimensions. The suitability of a
diversified organizational
strategy is consistent with the volatile macroeconomic conditions, market imperfections and high
uncertainty degrees that
has historically characterized the Uruguayan economy (Table 3).
Large-sized, local market oriented companies and those that operate in commerce are also found to
outperform medium,
exporting companies in the industry and services sectors. The size composition of the economic
sectors, the existence of
economies of scale and the emphasis on other dimensions of performance needed to compete in
foreign markets are most
likely explanations at the root of these findings. Lastly, productivity levels would be higher among
firms that are not subject
to a high union influence than otherwise while no differences are found related to the temporal
evolution of such influence.
The result may be thought as consistent with an adversarial role of unions.
Table 3. Productivity model Estimated coefficients for control variables
Variables
Coef.
Sector: Manufacturing & Construction industries
-1.9
***
Sector:Services
-2.4
***
Medium-sized (between 50 and 99 workers)

-1.0
***
Family-ownership
-0.2
National-ownership
0.3
Corporate nature
0.4
Local-market oriented
1.0
***
High union influence at firm

-1.1
**
Increased union influence at firm

-0.4
Competitive advantage - all
1.0
***
Note:
*
/
**
/
***
refer to p<0.15; p<0.10; p<0.05, respectively.

The full output is available upon request.
The model is able to identify several linkages between productivity and diverse dimensions of HR
management that involve
both calculative and collaborative practices, either individually or in bundles (Table
4). No calculative bundle is found to
differentiate firms in terms of their productivity level while gains associated to efficiency oriented
individual practices are
only linked to the use of specialized agents that recruit workers for at least one occupational
category (so as to guarantee
8
The authors discuss the topic at length and show that the biases driven by the disregard of sample
design are most
significant in a Working Paper available upon request.
14
that applicants have the necessary skills). The absence of significant effects associated to most
hiring practices is consistent
with the professionalized characterization of firms in the sample with respect to this particular HRM
dimension. Further, the
positive impact associated to the preference of a diversified profile of applicants, where the largest
weights are assigned to
the identification with the organizations ideology and to the likely establishment of a long-lasting
work relation, reveals
that firms that put the emphasis on the strategic profile of new workers would outperform their
competitors.
Table
4. Productivity model Estimated coefficients for HRM practices
Variables
Coef.
Individual practices
Recruitment: s
pecialised agents (educational institutes & specialized agencies)
1.2
***
Training:
aimed at developing a career through the acquisition of technical skills
0.9
*
Training:
aimed at developing a career through the acquisition of attitude-related abilities
-1.0
*
Wage setting at the firm for at least one occupational category

0.5
*
Communication flows: to teams

-1.4
***
Collaborative Bundles
Formalization/organizational culture bundle 1
1/
0.3
*
Formalization/organizational culture bundle 2

2/
0.5
*
Intermediary Bundles
Selection profile: commi
tment & efficiency oriented characteristics
0.5
**
Evaluation: commiment & efficiency oriented goals

0.6
***
Benefits:
future oriented and linked to seniority, current & future performance
0.4
**
Population/Sample/Strata
889/206/9
Significance of model: Prob. > F
0.0016
Notes:
*
/
**
/
***
refer to p<0.15; p<0.10; p<0.05, respectively. Only significant coefficients are reported. The full estimation
output is
available upon request.
1/
The bundle includes the existence of at least one written statement (negative loading if unwritten); written
statements on corporate mission, strategy and values; and written or unwritten statements on these three
aspects and also on HR
strategy and ethics.
2/
Statements: all written; written or unwritten on resposibility, communication policies and diversity.
Training aimed at developing a career within the firm is predicted to exert opposing impacts on
productivity depending on
its being based on the acquisition of technical (positive effect) or attitude related (negative effect)
abilities. The result
suggests that the combined use of
efficiency and strategically oriented HRM practices has a magnified impact on
productivity, a pattern that is also observed with respect to the use of evaluation systems and pay
practices (wage setting at
the firm and contingent benefits).

Further productivity gains are associated to the two bundles that include statements on all the
considered organizational
culture aspects and their degree of formalization (written or not), as opposed to the negative impacts
driven by the use of
communication policies that involve working-teams.
5
.
CONCLUDING REMARKS
15
The
evidence presented supports the existence of complementarities among HRM activities that involve
not only the use of
a particular practice with various purposes and/or for workers in diverse occupations, but also
different dimensions of
management. Bundled HRM activities are able to magnify the impact of single HRM practices on the
economic
performance of Uruguayan firms as measured through their comparative level of productivity.
However, the significant
effects that stem from single HRM practices would in principle be inconsistent with a strict
interpretation of the theoretical
predictions of the configurational approach and definitively suggest that the universalistic approach
of best practices is not
applicable.
Even though the prevailing profile of management in Uruguay is more efficiency than strategy
oriented according to the
existent empirical literature, our results show that their impact on performance is generally
materialized only when
combined with practices that are commitment-related. Strategic HR activities, in contrast, are found
to be of relevance by
themselves, both in bundles or individually.
Future work should include interactions and complementarities w
ith organizational strategy, their respective interactions
with union behavior and their impact on productivity, as well replicating the analyses for other
organizational performance
measures quality and gross profits- as indicated in Figure 1. Preliminary analyses indicate different
effects.
6
.
REFERENCES
Arthur, J. B. (1994). Effects of Human Resource Systems on Manufacturing Performance and
Turnover,
Academy of
Management Journal
37(3): 670-687.
Bacon, N., P. Ackers, J. Storey and D. Coates (1996). It s a Small World: Managing Human
Resources in Small Business,
The International Journal of Human Resource Management
7(1): 82-100.
Bartel, A. P. (1994). Productivity Gains from the Implements of Employee Training Programs,
I
ndustrial
Relations
33(4):
411-425.
Barton, H. and Delbridge, R. (2004). HRM in Support of the Learning Factory: Evidence from the US
and
UK Automotive
Components Industries,
International Journal of Human Resource Management
15(2): 331345.
Batt, R. (2002). Managing Customer Services: Human Resource Practices, Quit Rates, and Sales
Growth,
Academy of
Management Journal
45(3): 587-597.
Becker, B. and B. Gerhart (1996). The Impact of Human Resource Management on Organizational
Performance: Progress
and Prospects,
Academy of Management Journal
39(4): 779-801.
Beer, M. and B. Spector (1985).
Readings in Human Resource Management
, New York: Free Press.
Bertrand, M. and A. Schoar (2006). The Role of Family in Family Firms,
Journal of Economic Perspectives
20(2): 7396.
Bianchi, S., M. Hansz and M. Rubido (2011).
Persistencia del desempleo en Uruguay
, unpublished thesis, Facultad de
Ciencias Econmicas y Administracin, Universidad de la Repblica, Uruguay.
Black, S. E. and L. M. Lynch (2004). What's Driving the New Economy? The Benefits of Workplace
Innovation,
Economic Journal
114(493): 97-116.
Black, S. E., L. Lynch and A. Krivelyova (2003). How Workers Fare When Employers Innovate,
FRBSF Working paper
2003-22.
Black, S.E. and L. Lynch (2001). How to compete: The impact of workplace practices and
information technology on
16
productivity,
Review of Economics and Statistics
83: 434-445.
Bloom, N., C. Genakos, R. Sadun and J. Van Reenen (2009). Management Matters, mimeo,
LSE/Stanford.
Bloom, N. and J. Van Reenen (2007). Measuring and Explaining Management Practices Across
Firms and Countries,
Quarterly Journal of Economics
122(4): 1341-1408.
Boxall, P. and J. Purcell (2003).
Strategy and Human Resource Management
, Basingstoke: Palgrave Macmillan.
Brewster,
C.J. (2007). A European perspective on HRM,
European Journal of International Management
1(3): 239-259.
Brewster,
C.J. (1995). Towards a European Model of Human Resource Management,
Journal of
International Business
Studies
26 (1):
1-21.
Brewster, C. J. and
W. Mayrhofer (eds.) (2012).
Handbook of Research on Comparative Human Resource Management
,
Cheltenham: Edward Elgar Publishing Inc.
Brewster, C. J., W. Mayrhofer and. M. Morley
(eds.) (2004).
Human Resource Management in Europe: Evidence of
Convergence?
, Oxford: Butterworth-Heinemann.
Budhwar
, P.S. and N. Khatri (2002). Comparative human resource management in Britain and India: an
empirical study,
13(5): 800826.
Budhwar
, P.S. and P.R. Sparrow (2002). An integrative framework for understanding cross-national human
resource
management practices,
Human Resource
Management Review
12: 377403.
Cappelli, P. and D. Neumark (2001). Do High-Performance Work Practices Improve EstablishmentLevel Outcomes?,
Industrial and Labor Relations Review
54(4): 737-775.
Cassoni, A., G. J. Labadie
and G. Fachola (2005). The Economic Effects of Unions in Latin America: Their Impact on
Wages and the Economic Performance of Firms in Uruguay. In P. Kuhn and G. Mrquez (eds.):
What Difference do
Unions Make? Their Impact on Productivity and Wages in Latin America
, Washington: BID.
Cassoni, A., S. Allen and G. J. Labadie (2004). Unions and Employment in Uruguay. In J. Heckman
and C. Pags (eds.):
Law and Employment: Lessons from Latin American and the Caribbean
, Chicago: University of Chicago Press.
Cassoni, A., S. Allen and G. J. Labadie (2000). The Effects of Unions on Employment: Evidence
from an Unnatural
Experiment in Uruguay, Working paper 7501, National Bureau of Economic Research, Washington.
Cassoni, A., S. Allen and G. J. Labadie (1996). Wages and Employment after Reunionization in
Uruguay,
Cuadernos de
Economa
99: 239-277.
Davila, A. and M. M. Elvira (2012). Latin American HRM Models. In C. Brewster and W. Mayrhofer
(eds):
Handbook
of Research on Comparative Human Resource Management
, Cheltenham: Edward Elgar Publishing Inc.
Delaney, J. T. and M. A. Huselid (1996). The Impact of Human Resource Management Practices on
Perceptions of
Organizational Performance,
39(4): 949-969.
Delery, J. E and D.H. Doty (1996). Modes of theorizing in strategic human resource management:
Tests of universalistic,
contingency, and configurational performance predictions,
39: 802-835.
Doty, D. H., W. H. Glick and G. P. Huber (1993). Fit, Equifinality, and Organizational Effectiveness: A
Test of Two
Configurational Theories,
36(6): 11961250.
Druker, J. and G. White (1995). Building another Working Structure,
People
Management
1(8): 22-27.
Edwards, R. C. (1979).
Contested Terrain: the Transformation of the Workplace in the Twentieth Century
, London:
Heinemann.
Elvira, M. M. and A. Davila (2005). Emergent Directions for Human Resource Management
Research in Latin America,
16(12): 2265-2282.
Farndale, E. and J. Paauwe (2006). Best Practice versus Best Fit HRM: Within and Across MNC
Comparisons, Working
Papers in Human Resource Management 14, IIRA HRM Study Group.
Fazio, G., H. Lam and F. Ritchie (2008). Sample Bias in Microeconometric Analyses of Official Data,
UK: Office for
National Statistics, Department of Trade and Industry Report
,
No.
URN 06/737.
Fombrun, C. J., N. M., Tichy and M. A. Devanna (1984).
Strategic Human Resource
Management
. New York: JohnWiley
&.
Font, L. (2010).
Gestin de los Recursos Humanos, Relaciones Laborales y Desempeo en las Empresas
Uruguayas
,
17
unpublished thesis, Universidad ORT, Uruguay.
Fowler Jr., F.J. (2009).
Survey Research Methods
, Thousand Oaks:
SAGE Publications, Inc.
Galia, F. (2006). Incentives, Competencies and Knowledge: Evidence from France and Theoretical
Integration, paper
presented at the workshop Motivations and Incentives: creating and sharing knowledge in
organisational context,
March 30-31, Lisbon, Portugal.
Gerhart, B. (2007a). Horizontal and Vertical Fit in Human Resource Systems. In C. Ostroff and T.
Judge (eds.).
Perspectives on Organizational Fit
. New York: Lawrence Erlbaum Associates Publishers.
Gerhart, B. (2007b). Modeling HRM and Performance Linkages. In P. Boxall, J. Purcell, and P.
Wright (eds.),
The
Oxford Handbook of Human Resource Management
. Oxford: Oxford Univ. Press.
Gerhart, B. (2005). Human Resources and Business Performance: Findings, Unanswered
Questions , and an Alternative
Approach,
Management Revue
16 (2): 174-185.
Gerhart, B. and C. O. Trevor (1996). Employment Variability under Different Managerial
Compensations Systems,
39(6): 1692-1712.
Gill, C. (2009). Union Impact on the Effective Adoption of High Performance Work Practices,
Human Resource
Management Review
19(1): 39-50.
Godard, J. (2009). Institutional Environments, Work and Human Resource Practices, and Unions:
Canada versus England,
Industrial & Labor Relations Review
62(2): 173-199.
Godard, J. (2004). A Critical Assessment of the High-Performance Paradigm,
British Journal of
Industrial Relations
42:
349-378.
Gmez, C. and J.I. Snchez (2005). HR's Strategic Role within MNCs: Helping Build Social Capital
in Latin America,
16(12): 2189-2200.
Gmez-Meja, L. R. (1992). Structure and Process of Diversification, Compensation Strategy, and
Firm Performance,
Strategic Management Journal
13(5): 381-397.
Gooderham, P., O. Nordhaug and K. Ringdal (1999). Institutional and Rational Determinants of
Organizational Practices:
Human Resource Management in European Firms,
Administrative Science Quarterly
44(3): 507-531.
Gooderham, P., E. Parry and K. Ringdal (2008). The Impact of Bundles of Strategic Human
Resource Management
Practices on the Performance of European firms,

19(11): 20412056.
Gowler, D. and K. Legge (1986). Images of Employees in Company Reports. Do Company
Chairmen View their Most
Valuable Asset as Valuable?,
Personnel Review
15(5): 9-18.
Guest, D. E., J. Michie, N. Conway and M. Sheenan (2003). Human Resource Management and
Corporate Performance in
the UK,
British Journal of Industrial Relations
41(2): 291-314.
Guthrie, J. P. (2001). High-Involvement Work Practices, Turnover, and Productivity: Evidence from
New Zealand,
44(1): 180-190.
Huselid, M. A. (1995). The Impact of Human Resource Management Practices on Turnover,
Productivity, and Corporate
Financial Performance,
38(3): 635-672.
Huselid, M. A., S. E. Jackson and R. S. Schuler (1997). T
echnical and Strategic Human Resources Management
Effectiveness as Determinants of Firm Performance
,
40(1): 171-188.
Ichniowski, C., K. Shaw and G. Prennushi (1997). The Effects of Human Resource Management
Practices on
Productivity: a Study of Steel Finishing Lines,
American Economic Review
87: 291-313.
Jackson, S. E. and R. S. Schuler (2000).
Managing Human Resources
, Cincinatti: Thomson Learning.
Jackson, S.E. and R.S. Schuler, (1995) .Understanding Human Resource Management in the
Context of Organizations and
their Environments,
Annual Review of Psychology
46: 23764.
Kanouse, D. and M. Elliott (2010). Reporting Results for the C & G Survey: Strategies for Analysis
and Scoring,
Available at:
https://www.cahps.ahrq.gov/Consumer-Reporting/~/media/Files/Newsand/Events/UGM/12thUGM/
CAHPS /Kanouse.pdf.
Katou, A.A. (2008). Measuring the impact of HRM on organisational performance,
Journal of IndustrialEngineering and
18
Management
1(02): 119-142.
Koch, M. J. and R.G. McGrath (1996). Improving Labor Productivity: Human Resource Management
Policies do Matter,
Strategic Management Journal
17(5): 335-354.
Kochan, T.A. (1980).
Collective Bargaining and Industrial Relations
. Homewood, Illinois: Irwin.
Kostova, T. and K. Roth (2002). Adoption of an Organizational Practice by Subsidiaries of
Multinational Corporations:
Institutional and Relational Effects,
45(1): 215-233.
Labadie, G.J. (2005). Human Resource Management in Uruguay, in M.M. Elvira and A. Davila
(eds.):
Managing Human
Resources in Latin America: An Agenda for International Leaders
, London: Routledge.
Lengnick-Hall, M.L., C.A. Lengnick-Hall, L. S. Andrade and B. Drake (2009). Strategic human
resource management: The
evolution of the field,
Human Resource Management Review
19: 6485.
MacDuffie, J. P. (1995). Human Resource Bundles and Manufacturing Performance: Organizational
Logic and Flexible
Production Systems in the World Auto Industry,
Industrial & Labor Relations Review,
48(2): 197-221.
Machin, S. and Wood, S. (2005). Human Resource Management as a Substitute for Trade Unions in
British Workplaces,
Industrial and Labor Relations Review
58(2): 201-218.
Marchington, M. and I. Grugulis (2000). Best practice' human resource management: perfect
opportunity or dangerous
illusion? [Electronic version],
11(6): 1104-1124.
Martn-Alczar, F., P. M. Romero-Fernndez and G. Snchez-Gardey (2005).
Strategic Human Resource Management:
Integrating the Universalistic, Contingent, Configurational and Contextual Perspectives,
International Journal of
Human Resource Management
16(5): 633-659.
Masters, J. and G. Miles (2002). Predicting the Use of External Labor Arrangements: A Test of the
Transaction Costs
Perspective,
45(2): 431442.
McDonald, D. and A. Smith (1995). A Proven Connection: Performance Management and Business
Results,
Compensation & Benefits Review
27(1): 59-64.
Milgrom, P. and J. Roberts (1990). The Economics of Modern Manufacturing: Technology, Strategy,
and Organization,
American Economic Review

80(3): 51128.
Monks, K. (1992). Models of Personnel Management
:
a Means of Understanding the Diversity of Personnel Practices?,
Human Resource
Management Journal
3(2): 29-41.
Osterman, P. (1994). How common is workplace transformation and who adopts it?
Industrial and Labor Relations
Review
47(2): 173-188.
Perry-Smith, J. E. and T. C. Blum (2000). Work-Family Human Resource Bundles and Perceived
Organizational
Performance,
43(6): 1107-1117.
Pfeffer, J. (1995). Producing sustainable competitive advantage through the effective management
of people,
Academy of
Management Executive
9(1): 55-69.
Rajan, R. G. and J. Wulf (2006). The Flattening Firm: Evidence from Panel Data on the Changing
Nature of Corporate
Hierarchies,
Review of Economics and Statistics
88(4): 759-773.
Rodrguez-Gust, A. L., G. J. Labadie, L. Font, R. Prego and G. Cedrola (2003). Prcticas de
Gestin de Recursos
Humanos en Uruguay: un Anlisis Cuantitativo,
Relaciones
Laborales
1: 13-34.
Schuler, R.S. and S.E. Jackson (1987). Linking competitive strategies and human resource
management practices,
Academy of Management Executive
1(3): 207-219.
Stavrou, E. and C.J. Brewster (2005). The Configurational Approach to Linking Strategic Human
Resource Management
Bundles with Business Performance: Myth or Reality? ,
Management Revue
16(2): 186-201.
Walton, R. E. (1985). From Control to Commitment in the Workplace,
Harvard Business Review
63(2): 77-84.
Way, S. (2002). High Performance Work Systems and Intermediate Indicators of Firm Performance
within the US Small
Business Sector,
Journal of Management
28(6): 765-785.
Wells, D. (1993).
Are Strong Unions Compatible with the New Human Resource Management?
,
Relations Industrielles
48: 56-85.
19

HRM P

Încărcat de

Informații document

Titlu original

Drepturi de autor

Formate disponibile

Partajați acest document

Partajați sau inserați document

Opțiuni de partajare

Vi se pare util acest document?

Este necorespunzător acest conținut?

Drepturi de autor:

Formate disponibile

HRM P

Încărcat de

Drepturi de autor:

Formate disponibile

64

A STUDY OF HRM PRACTICES AND ORGANIZATIONAL

and Waterman (1982) focused their attention on the strategic importance of

lifestyles, risk-taking, and variety. Socio-economic support consists of work values of

1. To investigate the various HRM practices, i.e., planning, recruitment,

This hypothesis is further broken down into sub-hypotheses.

A birds-eye view of the sample distribution is as shown below:

(2) 21 items concern organizational culture.

Organization A is Indias largest private sector enterprise in the area of electrical

has embarked on continues to improve performance and competitiveness at all levels.

Organization B has a Personnel Department and there is no change in nomenclature.

of performance evaluation, rewards, planning, recruitment, and selection and training

Managers across organizations in the private sector strongly endorsed self-realization

challenging assignments, promotions and salary increases, etc., which give

difference between the socio-economic support variable in organizations A and B. One

Academy of management executive. 1987, vol. 1, no. 2, s. 9198.

G. R.; ROSEN, S. D.; BARNUM, D. T. (eds.). Handbook of human resource management.

A STUDY OF HRM PRACTICES AND ORGANIZATIONAL CULTURE

HR managerial strategies displayed by firms seeking to improve

High-commitment HR practices identified as

section has been attempted in previous studies (

The sample was selected through a stratified (economic sector

The answers provided by the

share of pay; linked to seniority; linked to performance;

The composition of the sample by diverse characteristics is available upon request.

No differences in productivity are found across

Medium-sized (between 50 and 99 workers)

High union influence at firm

Increased union influence at firm

refer to p<0.15; p<0.10; p<0.05, respectively.

Wage setting at the firm for at least one occupational category

Communication flows: to teams

Formalization/organizational culture bundle 2

Evaluation: commiment & efficiency oriented goals

the firm and contingent benefits).

Practices on the Performance of European firms,

American Economic Review

S-ar putea să vă placă și