Human resource strategy to improve organizational performance: a route for firms in Britain?

Abstract

Performance, in the context of organization, is not only a broad concept which has been used synonymously with productivity, efficiency, effectiveness and, more recently competitiveness, it has also been a subject of study for social scientists from a wide range of disciplinary perspectives. More recently, efforts have been made by human resource management (HRM) theorists to try to establish a causal link between HRM and performance. This has led to a growing number of studies which examine the potential contribution that good human resource policy can make to improving organizational performance. This paper is not concerned with the conceptual debate of HRM and performance. Rather, it explores whether adopting good HR practices to improve performance is a practicable approach to organizations in the UK. Drawing on existing empirical evidence from other studies, the paper reviews the strategies British firms deploy to improve labour productivity. In particular, the issue of whether they use the ‘high‐road’ HRM or ‘low‐road’ HRM strategy to enhance performance is investigated. This paper concludes by suggesting that high‐road HRM may lead to better organizational performance, but it may not be a strategy that firms opt for, given the historical, social and institutional context of employment relationships in Britain.