human resource bundles

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HUMAN RESOURCES BUNDLESThe Definition of Human Resources Management and Bundles

Human resource nowadays has been considered as an asset toward any organisation and

become a factor for the firms achieve the competitive advantage. There are many works from

numerous authors indicate the human resource management as the key successful indicator for

organisation performance enhancement. Dessler (2012) stated that the human resource

management is the process of acquiring, training, appraising and compensating employees;

moreover, it is also attending to the labor relations, health and safety and fairness concerns.

Dessler (2012) also mentioned that the managers could do everything but still fail since they

could not hire the right people or could not motivate the subordinates. Most of the authors in

their literatures have agreed that there are two meta-categorised types of theories that are

universalistic perspective and contingency perspective (Chang & Huang, 2005) (Dyer & Reeves,

1995)(Huselid, 1995). The universalistic perspective authors have considered that there is a close

relationship between the human resource management and the organisation performance and

concerned with the concept of “best practices” (Huselid, 1995). They believed that “best

practices” can be achieveable and the organisational success is best measured in terms of

financial performance (Gooderham, et al., 2008). The contingency perspective scholars, in

contrast, have made the arguments that the human resource strategy would be more effective

when it can be applied appropriately with specific organisational and environmental context

(Chang & Huang, 2005). Regarding to Gooderham, Parry, & Ringdai (2008), there is a third

perspective of human resource management so-called configurational perspective which means

in order to make the improvement in managing the people efficiently and enhance the

organisation performance, the authors have tried to combine human resource practices together –

bundling (MacDuffie, 1995). Especially in the time which globalisation has grown rapidly, the

diversity and job rotation of employees have occurred more frequently, the organisations have to

continually improve the performance through the ways of reducing cost, innovating products,

productivity, quality and speed to market acquirement (Becker & Gerhart, 1996). Bundling of

human resource practices is the development and implementation of numerous of human

resource practices so that they can be interrelated, complement and reinforce each other

(Armstrong, 2009). Dyer and Reeves (1995) made a clearer statement about the logic behind the

bundle when they said that employee performance is an occupation of ability and inspiration and

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hence, there should be practices aimed at enhancing both. Therefore, the organisations can

generate better results when they can have several ways for the employees to acquire the

required skills (for instance, through the careful recruitment and selection, training and

development, cross-departmental training, and so on) and multiple approaches to incentives so as

to enhance the employees motivation (monetary awards, employees recognition programs, 360-

degree feedback); as a result, the main logic of bundling is building the mutually reinforcing and

synergistic human resource practices (Dyer & Reeves, 1995). The real meaning of human

resource practices is defined in a work by Prowse & Prowse (2010) is that the mixing among the

firms activities focusing on the recruitment and selection, management, training and

development of the employees. The human resource practices can include the concentration of

performance management, creating the teamwork cohesion, improving communications,

empowerment, payment regarding to the agreed-upon performance, and employees security.

Literature Review & Critical AnalysisThe bundling of human resource management practices, at first, looks alike that it can

bring the huge impact toward the organisation performance. However, the issues still remain

uncertainty are whether there is a universalistic combination of “best practices” that can be used

in all companies, in any of organisation context and have the associated linear relationship with

the organisation performance and whether the bundles must be adjusted and applied

appropriately with the strategy and dependent on the environment that they are endorsed.

In order to answer the questions about the relationship between the bundles and the

organisations performance, there are various works from authors proved the effectiveness of the

human resource practices bundles. MacDuffie (1995) through the research of 62 automotive

assembly plants and discovered that the innovative human resource practices have an impact

regarding to the performance not individually but as interrelated elements as in an internally

consistent human resource “bundle”; moreover, the human resource bundles also contribute

much in the productivity and quality when they are get aligned with the manufacturing policies.

The author also recognised that the employees or workers will put more extra effort if they can

make the awareness that their self-interests would get along with the benefits of the organistion.

The most important point of MacDuffie was that the author stated that the human resource

practices had the most impact toward the organisation performance when they were able to

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combined as “bundles” and these “bundles” combination must be aligned with the organisational

logic or strategy. Syed & Yan (2012) made a research on a basis of 320 employees of 7

telecommunications companies in Pakistan. The authors realised that the employees

empowerment and jobs enrichment as well as enlargement were positively related toward the

employees satisfaction and enhance their attitudes toward the daily working routine. Once the

employees could show the good attitude and willing to put extra effort, the organisations

performance would be boosted. In this research, the authors also mentioned about the efficiency

of applying the merit-based promotions and performance-based pay in the employees

satisfaction. Another persuasive research of Huselid, Jackson, & Schuler (1997) on the public

available financial data of 293 publicly held firms in United States discovered that the

relationship between human resource management practices effectiveness and the employee

productivity, cash flow and market value are consistent with the instituational theory and the

resource-based view of the firm. These authors also emphasized about developing the

appropriate human resource strategic capabilities can help increase the activities of the strategic

human resource management. Tadic & Pivac (2011) made the research through all of companies

listed on Croatia Exchange Stock and the authors emphasize that the greatest contribution has

been noticed through creation of interrelated and integrated HR elements, popularly called

bundles - The results from the literature also confirmed the positive and statistically significant

correlation and interrelation between HR bundles. The research done by Beh & Loo (2013)

which included of top management and executive levels of insurance companies in Malaysia has

made the statement that the bundles of best practices would likely assist the insurance

organisations improve their performance. The combination of bundles that they mentioned were

performance appraisal, internal communication, career planning, trainingand development,

recruitment and selection, and SHRM alignment. Huselid & Becker (1997) developed the idea

“high performance work systems” which is defined as “using of high-involvement work

practices and found that utilizing these can enhance organizational competitiveness”

(Gooderham, et al., 2008). The authors found the positive impact of the high performance work

system (HPWS) and the effectiveness implementation of the organisation toward the

performance.

However, although there are some empirical experience abouth the relationship between

the universalistic approach of human resource practices bundles. However, it still has some

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critics. Through the work and research regarding to companies listed in Fortune 500, the authors

include of Martell, Gupta & Carroll (1996) made the evaluation toward the impacts of sixteen

HRM practices. The authors discovered that a half among sixteen practices could be completely

considered to have the positive relationship with the performance; however, there were still five

practices do not have any relationship. Moreover, the difficulty issue in real life for finding the

real combination of bundle and set of best practices, regarding to Guest, Conway, & Dewe

(2004), would require a lenience of uncertainty and a generosity in applying a wide range of

practices that may be many managers would sometime feel unenthusiastic in order to make the

support. There are also other reasons for doubting the “best practices”. A question has to be

asked is whether the employers have the foresight or long-term concept about the human

resource development or just look at the improvement in the financial performance (Yu, 2013).

Moreover, when the set of practices is formed, how can it be applied in the whole organisations

appropriately, especially in the time of globalisation and diversity. In order to make the proper

implementation of the bundling of human resource practices, the organisations would need to

have programs to develop the transformational leaders (Gandolf, 2012). Because

transformational leaders would have the skills in making the tremendous effect toward the

employees or followers to transcend their own self-interest and make the extra effort in order to

achieve the common objectives and the direction of organisation (Hargis, et al., 2011) (Gandolf,

2012). Therefore, it is also important to select the appropriate practices and make the

combination to adapt with the corporate strategy and policy.

ConclusionIn conclusion, the bundling of human resource practices would generate more benefits for

improving the organisations performance. The universalistic human resource bundles through the

works of the author show that they are not only effective in manufacturing industry but also in

non-manufacturing industry. Although almost all of companies and firms try to build up the

“best practices” or the “High Performance Work System”, those organisations need to think

about developing the leadership programs first to have leaders prove their motivational

inspiration skills.

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