High and Low Road Approaches to the Management of Human Resources: An Examination of the Relationship between Business Strategy, Human Resource Management and High Performance Work Practices

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The Human Capital approach to Human Resource Management proposes that, unlike traditional sources of competitive advantage, a quality, motivated workforce is a source of competitive advantage that is difficult for competitors to replicate (Luthans and Sommer, 2005). Research has indicated that High Commitment Work Practices (HCWP) rather than high control practices are a vehicle for creating such a workforce. High control practices take the "Low Road" to competitive advantage and are designed to produce reliable but not outstanding performance that cannot match the standards of excellence set by world-class competitors. HCWP take the "High Road" to competitive advantage by providing an environment that facilitates worker commitment, resulting in mutually beneficial outcomes for both employees and organisations (Walton, 1985).

Various terms have been used in research on new work methods that are based on commitment rather than control. These include "High Involvement Work Systems", "Progressive Work Practices" and "High Performance Work Systems or Practices". There is no single agreed-upon definition or consensus, although common themes have been identified (Gephardt and Van Buren, 1996; Wright and Snell, 1998). In this research we will use the term High Performance Work Practices (HPWP) which is in most common use. Orlitzky and Frenkel (2005) propose that the wide scope of the HPWP paradigm, that includes widely different model specifications, and the appeal of its underpinning assumptions, has meant that it has persisted despite variable empirical evidence that indicates the need for theoretical and methodological refinement (Dyer and Reeves, 1995; Becker and Gerhart, 1996; Becker and Huselid, 1998; Gerhart et al., 2000; Guest, 2001; Guest et al., 2003).

Despite methodological problems, research to date points to a positive relationship between HPWP and organisational outcomes, however, our understanding of the way in which HRM is linked to organisation performance is limited. Guest (1997) proposes that there is a growing body of evidence supporting an association between HPWP and organisation performance, but not much on why the association exists. Most work on HPWP has examined only the direct relationship between a set of management practices and performance outcomes and whilst the link between HPWP and organisational performance is accepted, the mechanics of the linkages are considered a 'black box' with empirical and theoretical gaps (Luthans & Sommer, 2005).

In addition to this, given the research supporting the link between HPWP and performance, it is not clear why many organisations have failed to adopt a full suite of these practices. This is even more surprising when there is some evidence that these practices are most effective when they are implemented together as a system or bundle of complementary highly-related and overlapping practices (Pfeffer and Veiga, 1999). Truss (2001) found that there was frequently a discrepancy between intention and practice and that even successful organisations do not always implement best practice human resource management (HRM). There have been varying explanations for this. Skinner (1981:106-14) proposed that HRM is ineffectual saying that "human resources management seems to be mostly good intentions and whistling in the dark" and that HRM is "Big Hat, No Cattle", whilst Armstrong (1987) describes HRM as a "wolf in sheep's clothing" that uses rhetoric to facilitate the introduction of HRM practices that advantage organisations at the expense of employees. In this latter paradigm High Road practices that are commonly regarded as enabling, emulate coercive Low Road models unintentionally or because of multiple management goals (Orlitzky and Frenkel, 2005). Managers indicate that the cost of making changes, a focus on the short-term, lack of management support and a culture that does not emphasise human resources, as barriers to adopting HPWP (Lawler et al. …