Human Resource Management (HRM) rhetoric has been a dominant academic and corporate fashion with regard to the social organization of large firms in the context of economic globalization. What is this fashion and the reality check about it?
There are two frames of reference—unitary and pluralist–within which to conceptualise workplace sociology.
The unitary frame of reference stresses the importance of a common objective for the enterprise or business organization. With one source of authority and one focus of loyalty, there is no room given in this frame of reference for factions and altercations between them within the enterprise; all the participants have the same basic aim (the efficient functioning of the enterprise) and all aspire to share in the rewards that will accrue from the attainment of this aim. Conflict is thus denied within this framework. “The doctrine of common purpose and harmony of interests implies that apparent conflict is either (a) merely frictional, e.g. due to incompatible personalities or ‘things going wrong’, or (b) caused by faulty ‘communications’, e.g. ‘misunderstandings’ about aims or methods, or (c) the result of stupidity in the form of failure to grasp the commonality of interest, or (d) the work of agitators inciting the supine majority who would otherwise be content”.
Improving human relations and communications are appropriate methods to avoid conflict, which is seen as the result of poor social relations. In this unitary frame, the presence of trade unions is seen as an ‘intrusion’ into the private and unified structure; unions compete ‘illegitimately’ for control over, and the loyalty of, the employees; and they are considered as ‘foreign and alien’ to the private affairs of the company.
The unitary structure at enterprise is analogous to a professional football team, in which team structure, loyalties and a substantial measure of managerial prerogative at the top are the basis of success. It is characterized by managements prescribing tasks thereby leaving little room for workers’ initiative, marginalizing trade unions, and making collective bargaining and participative styles inconsequential.
In the pluralist frame of reference, the enterprise contains groups with a variety of interests, aims and aspirations, so much so that it is a coalition of different interests rather than an embodiment of one common goal. The pluralist business organization is akin to the miniature democratic state, composed of sectional groups with divergent interests. As such, conflict is to be expected; but it should not be quelled or suppressed. Instead conflicting opinions and demands should be reconciled and kept within acceptable bounds so that they do not destroy the enterprise completely. In this pluralist frame, the legitimacy and justification of trade unions rest upon “social values which recognize the right of interest groups to combine and have an effective voice in their own destiny”
HRM fashion is consistent with the unitary framework and not the pluralist framework.
This is not all. It also factors in the ideas of new work designs and processes of the ‘human relations school’ developed in the United States in terms of the ‘Hawthorne experiments’, which was the prelude to the introduction of joint consultation and worker participation schemes. The documentation of experiments at the Western Electric Company during 1927-32, in which a group of six female workers were placed in experimental rooms and exposed to periodically changing test-room situations in work conditions, including participation and rewards, demonstrated that production output increases dramatically when work groups develop into social units, and are involved in determining their own work schedules, and when they give ideas and see them used in improving production and when they are given minor ‘privileges’ on the shop floor —coffee, sandwiches and extension of break-time to eat. This kind of scenario can be compared to the scenario almost 60 years after the Hawthorne experiments that the Fortune magazine reported with respect to Chaparral Steel in Texas, United States, which produces steel with 1.6 hours of labour per ton, as the lowest cost producer in the world. The Chief Executive Officer of the company uses three ideas: the classless corporation, universal education and the freedom to act. They involve utilizing workers’ innovative suggestions, allowing workers the freedom to determine their own work designs and pace, and providing free coffee. Another similar example in modern times is the introduction of ‘management-led’ strategy to increase productivity, quality and flexibility at the Japanese-owned Mazda motor plant in Michigan, United States.
Unlike in the United Kingdom characterized by pluralist framework within industry and society, HRM became a prominent management fashion in the United States. This is not difficult to understand because by emphasizing the desire for human growth (via cross-training), creation of greater opportunities and a reinforcement of strong leadership, HRM was consistent with the ‘American Dream’, which sees the United States as a land of opportunity characterized by a respect for rugged individualism and a frontier mentality. The ideology of HRM also finds its pro-active policy support in the writing of the win-win human resource and production system ‘gurus’ on bringing about ‘mutual gains enterprises’ by forging a winning partnership among labour, management and government.
HRM fashion can also be understood in terms of the attempt on the part of the Western managements to factor in the much avowed superior Japanese quality and flexibility management techniques on the shopfloor. The Japanese total quality principles are codified as follows: (i) Quality is defined according to the requirements of the consumer first and then in terms of conformance to specifications; (ii) There are internal and external customers—setting high quality for the next process within the production function. This is also used as a guiding principle for the standards of those firms involved in subcontracting; (iii) Routine use of performance testing to assess quality and conformance; (iv) The introduction of new organizational arrangements— managerial flow of information outside the normal vertical lines of communications, dual reporting and special-project teams. (v) Greater participation in decision making—the sharing of information and knowledge. (vi) The development of an organizational culture characterized by high-trust social relationships, team work, respect for individuals (e.g. at Chaparral, any shop floor worker was allowed to park in the executive car park), a sense of belonging to the firm and a belief that constant improvement is for the common good; (vii) The quality of the final product or service depends upon every single activity in the organization.
The reality check about the HRM fashion which continues to dominate undergrad and postgrad classrooms is that it is conspicuous by its absence in terms of the new work design and processes and the associated compatible incentive mechanisms used in large firms even as it is conspicuous by its presence by way of union bashing. HRM is surely not implemented as a holistic strategic option, but rather as a set of piecemeal strategies used in an opportunistic or pragmatic way with the sole aim of union bashing. Which also suggests that the big business community cares two hoots for democratizing the workplaces. Instead, it prefers benevolent or brutal dictatorship inside and outside of workplaces in light of the demonstration effect of China’s ability to ‘get things done’! (Kleinfeld, 2014)
This conclusion is a solid hypothesis for further empirical testing of HRM as now the ‘universal boss’ of the new industrial relations rhetoric. MBA students specializing in HRM must address this research agenda without compromising on the deep honesty required in so doing. A serious problem with this kind of research in India, though, is that large companies are opaque, secretive and outright hostile towards research on their internal social arrangements.
By Annavajhula J. C. Bose
Department of Economics, Shri Ram College of Commerce
Bose, Annavajhula J.C. 2018. An Inquiry into the Nature and Causes of Contemporary Labour Relations. eBook. Blue Rose Publishers. New Delhi.
Kleinfeld, Rachel. 2014. Benevolent Dictatorship is Never the Answer. Carnegie Endowment for International Peace, Washington, DC. March 8.