Human Resource Management Review 25 (2015) 176–187

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Human Resource Management Review

journal homepage: www.elsevier.com/locate/humres

Human resource management (HRM): Too busy looking up to

see where it is going longer term?☆
Mick Marchington
Human Resource Management, Manchester Business School, United Kingdom

a r t i c l e i n f o a b s t r a c t

Keywords: HRM has always been located at the interface of potentially conflicting forces within organisations.
HRM However, in its quest for legitimacy, HRM has tended primarily to look up the hierarchy and focus
Business partners on narrow performance goals, so neglecting other long-standing values and stakeholders. Unless
Talent management
HRM reasserts its independence, it is likely to wither both in academic and practitioner circles.
Employee engagement
© 2015 Elsevier Inc. All rights reserved.
Supply chains

1. Introduction

In recent times, there has been a major focus on the meaning and significance of human resource management (HRM), its link – if
any – with performance, and its ability to translate strategic rhetoric into workplace reality (see for example, Boxall & Macky, 2009;
Guest, 2011; Paauwe, 2009). From its early roots in welfare and personnel management, through periods when employment relations
and legal regulation came to the fore, nowadays strategic HRM appears to have taken centre stage (Lengnick-Hall, Lengnick-Hall,
Andrade, & Drake, 2009). This has significant implications for HRM and the role of the HR function. From being criticised over time
for lacking a strategic role, this paper argues that HR is in danger of moving too far in the opposite direction and ignoring key components
of its unique contribution. Accordingly, as Van Burren, Greenwood, and Sheehan (2011) note, in aiming to please other managerial
functions in order to gain a seat at the top table, HR may find it now neglects other key stakeholders.
The shift to use HRM (and particularly strategic HRM) has encountered opposition, both from within the subject area/profession
and outside of it. Some critics from within feel HRM is implicitly managerial in character, focused on employees as ‘resources’ to be
used by employers, rather than assets to be developed, and lacking an employee perspective (Caldwell, 2008; Reilly, Tamkin, &
Broughton, 2007; Van Burren et al., 2011). Those from outside regard HRM, especially its ‘soft’ or quality enhancement variant, as little
more than a public relations cloak to hide the nastier dagger of work intensification, a wolf in sheep's clothing that tries to con workers
into aligning with management interests (Bolton & Houlihan, 2007). In its ‘hard’ or cost reduction form, HRM has been portrayed as an
assault on workers and trade unions, as well as a management style which scares workers into compliance (Legge, 2005). Whilst
powerfully presented, these critiques lack credibility because, depending on the argument, different versions of HRM are put forward
to support the case that it lacks effectiveness or moral authority (Thompson, 2011). There is also little chance of these ideas being
incorporated into mainstream HRM because they fail to focus on how core HR practices – such as pay and reward or employment
relations – actually operate, and because their discourse is overtly hostile to managers.
Perhaps a more promising approach is to re-evaluate where HRM is moving, and whether it is overlooking other stakeholders in
attempts to satisfy senior managers. In HR's desire to look up the organisation, it has become a servant to short-term performance
goals and the mantra of shareholder value rather than the development of longer-term sustainable contributions based on shared

☆ For special issue of Human Resource Management Review.

http://dx.doi.org/10.1016/j.hrmr.2015.01.007
1053-4822/© 2015 Elsevier Inc. All rights reserved.
 M. Marchington / Human Resource Management Review 25 (2015) 176–187 177

values and fairness at work. Related to this, the enthusiastic take-up of the strategic business partner model of HRM (Ulrich &
Brockbank, 2005) seems to have ignored or downplayed the employee champion/advocate role as largely irrelevant, and possibly
counter-productive, to the goal of strategic influence. There is a danger that the human aspects can be taken out of HRM in the process
(Wright & McMahan, 2011), and that the HR function can become indistinguishable from other functions, such as finance and
marketing, and thereby lose a crucial element in its unique selling point. This is compounded by an obsession with talent manage-
ment, defined in terms of a small minority of staff rather than all workers, which overlooks the difference that staff at the customer
interface can make to corporate reputation and social legitimacy. Similarly, the personal traits view of leadership stresses the impor-
tance of personality and charisma rather than exchange relations between supervisors and their teams. Yet further, in addition to the
growing divisions within organisations, the fragmentation of work across organisations has led to even larger differences between
clients and suppliers (Marchington, Rubery, & Grimshaw, 2005). People that used to be core workers are now frequently re-
employed in supplier firms and lose the opportunity to retain the ‘good’ employment conditions now enjoyed by a relatively small
cadre of favoured employees in client organisations. Indeed, this ‘race to the bottom’ in pay and conditions is often justified as a
necessary consequence of the survival of modern capitalism (Gospel & Pendleton, 2003). In short, these developments combine to
produce a situation where HR has forgotten that offering something different from other functions is critical to its contribution to
long-term organisational sustainability.
The rest of the paper proceeds as follows. The next section contains a brief history of HRM, particularly in the UK. This is followed
by the main section which outlines four connected arguments about how HR is in danger of chasing rainbows rather than cementing
its position within organisations. This might cause it to lose focus and influence, and ultimately be subsumed by other management
functions, such as marketing and finance, that are better at giving businesses what they say they really want. It should be noted at the
outset that much of the material presented here is from non-US sources, an approach which is welcomed by the guest editors and
seems pertinent for a journal that has international prominence. The study of HRM in the UK has quite different traditions from the
USA, most notably scepticism about the sustainability of employment regimes characterised by high differentials, in terms of rewards
and fair treatment, and between those in favoured positions and other workers within and beyond the immediate organisation (Bach
& Sisson, 2000).

2. Different versions of HRM and responsibilities for managing people

Before analysing these four arguments more fully, we need briefly to review how HRM and the HR function emerged and
developed. This section will not deal with this in depth given (a) the limitations of space in a journal paper and (b) the fact that
this is already likely to be well-known by readers.
It is widely accepted that the terminology of HRM originated in the USA, first appearing in the textbook literature from the mid-
1960s, but taking root a couple of decades later via the Harvard framework developed by Beer, Spector, Lawrence, Quinn Mills, and
Walton (1985) and the Fombrun, Tichy, and Devanna (1984) matching model. In the former, personnel and industrial relations
were viewed as reactive, piecemeal, part of a command and control agenda, and short-term in nature, whilst HRM was seen as
proactive, integrative, part of an employee commitment perspective and long-term in focus. In line with this perspective, human
resources were seen as an asset and not a cost. The Harvard framework recognised that HRM does not focus exclusively on manage-
ment and shareholder interests but acknowledged roles for employee influence and the part played by employing organisations in
relation to wider, long-term societal interests. A key feature of the Harvard approach was that it treated HRM as an entire system,
and thus the combination of HR practices is important. As Allen and Wright (2007, p91) note, ‘this led to a focus on how the different
HRM sub-functions could be aligned and work together to accomplish the goals of HRM.’ The other main approach developed in the
USA was the matching model (Fombrun et al., 1984), which emphasised the links between organisational strategy and specific HR
practices, concentrating on vertical alignment rather than horizontal integration (Marchington, Rubery, & Grimshaw, 2011); what is
now termed the ‘best fit’ or contingency approach.
The UK first used the terminology of HRM in the late 1980s, with contributions from several disciplinary backgrounds — personnel
management, industrial relations, organisational psychology, sociology, economics and law. Unlike many other countries, the UK
tradition was heavily dominated by scholars with a background in industrial relations and sociology, thus developing a more overtly
critical perspective (Bach & Sisson, 2000). Pluralism and notions of mutuality, as well as a key role for trade unions, were central to this
perspective to the extent that, in some analyses, any form of non-union firm was castigated even if it provided superior terms and
conditions (Bolton & Houlihan, 2007). Ideas about HRM were underpinned by the notion that the employment relationship was
contested and uneven, and if employers wanted to gain employee alignment with organisational goals this required some effort on
their part to engage workers and generate their willing commitment to what were essentially management objectives (Noon &
Blyton, 2007). This meant that good person–organisation fit, for example, was perceived as much more than a simple technical
exercise in which compliant workers accepted top-down messages from senior management without question.
The British debate centred initially on the distinction between ‘hard’ and ‘soft’ models of HRM (Storey, 1995), now recast as the
distinction between cost reduction and quality enhancement business models (Marchington & Wilkinson, 2012). The former stresses
the ‘resource’ aspect of HRM, where there is no pretence that labour has anything other than commodity status even though it may be
treated well if labour markets are tight. ‘Hard’ HRM employers typically aim to minimise spending on the entire employment package
not only by restricting wages and other benefits but also by denying workers a proper voice in their organisations through non-union
strategies, tight performance management regimes and a lack of effective grievance procedures (Edwards & Ram, 2006). It is unlikely
that the HR function has much influence in organisations such as this because many firms in this area are small and operate without
specialist HR professionals.
178 M. Marchington / Human Resource Management Review 25 (2015) 176–187

The ‘soft’, quality enhancement model argues that one style is superior to all others in promoting the high levels of employee
motivation, commitment and satisfaction that are necessary for excellent performance. The ‘soft’ model focuses on the management
of ‘resourceful humans’, assuming that employees are valued assets and a source of competitive advantage because of their skills and
abilities. Within this view of HRM, managers need to engender commitment and loyalty in order to ensure high levels of performance
and promote employee well-being. Much of the literature has focused on this version of HRM and the concomitant role that is envis-
aged for the HR function in generating, motivating and retaining a suitable pool of labour (Pfeffer, 1998; Wall & Wood, 2005).
The key characteristics of soft HRM are sophisticated recruitment and selection, employment security, extensive training and
development, employee involvement, above average levels of pay, performance management/career development and work-life
balance (Marchington & Wilkinson, 2012). Thus, HR is closely involved in the management of labour and in generating a
commitment-based attachment to the organisation (Walton, 1985). It is also assumed that, in principle at least, the package available
under soft HRM is applicable to all workers at an organisation, particularly in terms of practices connected with employment security,
employee involvement and work–life balance. Of course, pay differentials remain in place but the gap between top and bottom is not
excessive. As we see later, this no longer applies in most organisations, partly due to cuts brought about due to the global financial
crisis but also because top managers have captured an even greater share of the cake.
The soft version of HRM is also under pressure from the increasing involvement of line managers, rather than HR professionals, in
its implementation. Evidence from several countries shows how line managers' roles in HRM have increased over the last twenty
years (Brandl, Madsen, & Madsen, 2009; Purcell & Hutchinson, 2007; Sanders & Frenkel, 2011). However, whilst line managers are
responsible for operational HR issues, the HR function still designs procedures and liaises with senior management about policy,
strategy and culture (Marchington & Wilkinson, 2012). For example, research on ward managers in hospitals both in the UK
(Hutchinson & Purcell, 2010) and in Australia (Townsend, Wilkinson, Allan, & Bamber, 2012) illustrates how the HR aspects of
their role have increased sharply without any parallel reduction in their clinical duties. It is hardly surprising therefore that HRM is
often neglected or under-valued in the face of competing pressures to deal with patients.

3. The main components of HR's shift to look up the organisation

The remainder of this paper now examines four different components of the argument that HR is in danger of losing focus and
influence. These are that HR has:

(a) adopted the narrative and metrics associated with short-term and easy-to-measure performance criteria and ignored other
stakeholders;
(b) become obsessed with the strategic elements of the business partner model and downplayed its responsibilities elsewhere,
particularly to employees;
(c) focused unduly on how to build top talent and develop charismatic leaders rather than trying to engage all staff;
(d) reinforced the growing divisions between the terms and conditions of core workers employed directly by clients and those
working for suppliers.

3.1. Adopting the narrative and superficial metrics associated with short-termism

In previous times, HRM (or more accurately personnel management and industrial relations) was characterised as an intermediary
between management and workers, offering a buffer between the worst excesses of management domination and the more negative
reactions of obdurate workers (Legge, 2005). Much of its work revolved around trying to get workers to agree with plans passed down
by senior management but also to make senior managers understand that workers had real, heart-felt concerns about how they were
treated. This was reflected in the welfare tradition, managerial interest in proactive workforce planning and in workers' expectations
of long-term employment security. This is not to say that personnel managers were mere ciphers for the workforce; far from it, as we
know from the major industrial relations strife that occurred in the UK – and many other countries – during the 1960s and 1970s. But
there was certainly a strong tradition of mutuality and of being seen to be fair to both sides as well as willing to listen to workers as
well as promote employer interests (Legge, 2005).
Nowadays, HRM is more openly and avowedly oriented towards employer goals, both in the short- and the long term. In liberal
market economies, organisational goals are directed towards short-term gains in shareholder value (or continuing cost-cutting in
the public sector), and thus whatever the differing interests of workers and management HR managers have little option but to
support the position of the employer (Grimshaw, Rubery, & Almond, 2011). However appropriate this may seem in the short-term
it ignores the place that employers can and should fill within society more generally, and the role they can play in fostering social in-
clusion, encouraging workers to express their concerns through agreed channels, and identifying with broader norms of fairness and
equality. Boxall and Purcell (2011) put it well when they refer to employers having multiple goals, one of which is social legitimacy.
This argues that employers occupy a role within society more generally, not just as part of a wider community that includes citizens
and consumer groups but also through financial contributions and non-executive board membership in schools, universities and
charities. Employers are also expected to act within the legal regime of the country involved, though of course some pay less than
the minimum wage, ignore their health and safety obligations or avoid taxes. But those seeking the goal of social legitimacy, as
well as economic objectives, are keen to contribute to the health of the nation in which they are located (Cooke, 2011).
More recently, however, there has been an obsession with how HR can contribute to organisational performance — expressed in
terms of financial and other indicators, which are typically short-term in nature (Marchington & Wilkinson, 2012). It is difficult to see
 M. Marchington / Human Resource Management Review 25 (2015) 176–187 179

quite how some of the indicators used – such as profit or share value – really can be influenced directly by the efforts of individual
workers within a small firm, let alone in large multinationals that operate on a global stage (Boselie, Dietz, & Boon, 2005; Boxall &
Macky, 2009). The recent and in some cases on-going financial crisis provides a rather sombre reminder of how share prices and
risk ratings can be influenced by actions way beyond the control of HR managers and workers, but also how the latter often end up
paying with their jobs when employers need to cut costs. It is clear that the global financial crisis has undermined the long-term sus-
tainability of HRM and triggered rises in unemployment at a country level which do nothing for social legitimacy of employers.
This is also apparent at organisation level. Although some organisations have become more transparent in their reporting and ap-
pear to take HRM more seriously, this is undermined by the increased presence of private equity firms (PEFs). Their role is particularly
apparent in liberal market economies such as the UK and USA (Wood & Wright, 2009), and to some extent in Australia (Westcott,
2009), though much more limited in the coordinated market economies of mainland Europe (Watt, 2008). In the UK, for example,
it was estimated that at the height of PEF activity between 10 and 20% of employees were employed by PEFs (Clark, 2007). His
research also shows that HRM suffered primarily in outsider-driven PEFs, where established firms are taken over through a leveraged
buy-out and there is pressure to generate high returns for external investors. Given that PEFs operate according to short-term prin-
ciples, it is hardly surprising that initial restructuring leads to substantial job losses, and that workers are less well-off financially
and have lower levels of trade union recognition and less employment protection than they do in PLCs (Watt, 2008).
The widespread use of benchmarking contributes further to the case that HRM is being assessed primarily in terms of costs and
short-term measures, which is understandable if we accept accountants' visions of how organisations should be run (Armstrong,
1995). Widely-used measures are days/expenditure devoted to training, the time and cost of filling vacancies, number of accidents
at work, and levels of labour turnover. Whilst these all provide useful data, there are major shortcomings in their application and sev-
eral alternative reasons why they might be high/low (Pfeffer, 1997). For example, whilst expenditure on or number of days devoted to
training can be a proxy for employer commitment to staff development, this tells us nothing about the type of training offered, the
range of people to whom it was offered, or whether or not it was successful. Similarly, time and cost to fill vacancies tell us nothing
about the outcome, the type of job for which a replacement was needed, or indeed the ethics of the process. Indeed, it is possible
to recruit someone for nothing by appointing a friend but there are serious problems – in terms of equal opportunities, ethics and
quality – of resorting to such an approach. A particularly stark example of how ethics have changed recently concerns the case for
deregulating health and safety (Smedley, 2012) where one of the contributors noted that the key issue was ‘how much accidents
cost the business, how much is that putting up the insurance premium?’ It appears that costs matter more than the health of
employees following an accident at work.
Labour turnover is widely used as a measure, which seems strange given that levels vary sizeably between sectors and occupations
and are heavily influenced by external labour market factors (Morrell, Loan-Clarke, & Wilkinson, 2001). Moreover, not everyone
leaves because they are unhappy with their current employer. Employees may leave because of a better job elsewhere, because a
different employer moves into the local labour market and they fancy a change, or purely because they want to get more experience
elsewhere — as is the case with many graduates during the early stage of their careers (CIPD, 2011). None of these is necessarily a
negative reaction to their current employer, nor is it desirable for organisations to do all they can to retain someone who wants to
leave since it can merely store up trouble, especially if inducements are offered to retain the employee which then creates resentment
amongst other staff (Boxall, 2013). So much depends on who leaves as to how much they will be missed by the organisation, and in
some cases both parties can gain from the separation. In other words, it is important to utilise measures assessing the quality of leavers
rather than just record their quantity, and to assess added value rather than costs alone.
In short, this shows how HRM is increasingly focusing on the short-term goals of shareholders and senior managers to the neglect
of other stakeholders, a position that is reinforced by the widespread use of ‘easy-to-measure’, cost-based metrics. Given that HR has a
history of being alert to issues raised by employees and in fostering links between organisations and the societies in which they
operate, this is an area of particular concern if employers wish to regain the social legitimacy they may have lost following recent
scandals.

3.2. Focusing primarily on the HR strategic business partner role

Several UK frameworks have been proposed for analysing the role of the HR function (see, for example, Caldwell, 2003; Legge,
1978; Storey, 1992). These differentiate HR in terms of factors such as its level in the hierarchy, degree of discretion it is allowed,
reputation and organisational profile, and amount of influence on higher level decision-making. Legge's (1978) categorisation also
evaluated HR in terms of its willingness to conform with or deviate from the dominant business model, and the extent to which
HR acted in a problem-solving capacity. The UK literature reflects the roots of HRM within a broader social science tradition of
independence from any party and a healthy degree of scepticism about new trends and fashions.
However, during the last decade, UK academics and employers alike have used the work of Ulrich (Ulrich & Brockbank, 2005)
much more widely (see, for example Caldwell, 2008; Hird, Sparrow, & Marsh, 2010; Reilly et al., 2007). This work needs little
amplification in this journal for obvious reasons, but broadly it proposes that HR occupies five roles — employee advocate/champion,
functional expert, human capital developer, strategic business partner and HR leader. These have often been implemented via the
‘three legged stool’ (Hird et al., 2010) which comprises HR business partners, centres of expertise and shared services models. Strate-
gic business partners work closely with senior executives to ensure alignment between organisational goals and HRM, centres of
expertise are provided to offer dedicated and well-researched support for the business, whilst shared service centres concentrate
on administrative and transactional personnel activities. The latter could be retained in-house (Cooke, 2006), particularly in a large
multinational organisation which operates across the globe, or it might be out-sourced (Woodall, Scott-Jackson, Newham, & Gurney,
180 M. Marchington / Human Resource Management Review 25 (2015) 176–187

2009), in which case the staff are not included in the client organisation's headcount. However, the strategic business partner role has
attracted most interest.
Despite its attractiveness to practitioners, this approach can lead us down a path which focuses primarily on the contribution of HR
to organisational goals rather than taking into account the concerns of all stakeholders (Keegan & Francis, 2010). It is easy to appre-
ciate how an opportunity for the profession to cement its standing at board level, and contribute as a full and equal member of the
senior management team, should not be missed. However, this raises problems, not least in its lack of relevance and meaning to
those that work in organisations where the function has never been allowed a central role and is typically treated as marginal
(Marchington & Wilkinson, 2012). Ulrich's work has attracted massive attention and many organisations have adopted the strategic
business partner role (Caldwell, 2008; Reilly et al., 2007). Unfortunately, implementation of the model has limited its success. Hird
et al. (2010, p31) note that problems have arisen due to:
• Off-the-shelf implementation of a new HR structure
• Fragmentation of HR structures
• Insufficient attention to skills sets required to run the three-legged stool structure
• Lack of skill and understanding amongst line managers about the new model
• Gaps between the business partners doing executive work and centres of expertise.
There is also a more deep-seated critique that the strategic business partner role is moving HR too close to organisational leaders
and their modus operandi. Wright and Snell (2005, p181) argue that HR leaders must ‘distinguish between decisions that are driven
by the business and decisions driven for the business. A focus on short-term financial returns for fickle investors may be made at the
long-term cost of organisational viability…HR leaders must be the guardians of our firm's strategic capability…and the guardians of
our ethical and moral integrity.’ Similarly, Francis and Keegan (2006, p242–3) note that the employee champion role has shrunk
because HR professionals have been encouraged to aspire to the role of strategic business partner. This is not always welcomed by
the individuals concerned who feel that they have lost contact with the human side of their work. As one of the senior CIPD advisers
they interviewed put it, ‘no-one wants to be an employee champion. They think it is ideologically unsound. I think they see it as
them being in opposition to the organisation…and it suggests their management credentials are suspect.’ Keegan and Francis (2010)
have recently argued that the ‘discursive dominance of HR business partnership’ – alongside pressures to reduce costs, increase com-
petitiveness and achieve a tighter alignment between business strategy and HRM – has led HR to lose touch with employees. Structural
shifts in the way HRM is organised mean that HR specialists are not expected to devote time to employees because strategic business
partners need to promote organisational goals above those of other stakeholders. Moreover, shared service centres are remote from any
physical contact with employees as e-HR takes effect, and line managers are encouraged to be self-sufficient in leading their teams.
A closer reading of Ulrich's work also suggests that HR strategic business partners are not quite as central to strategy formulation as
it seems, largely because they are called upon to align HRM after decisions have been made about wider issues (Marchington &
Wilkinson, 2012). In the excitement of installing business partners, people forget that Ulrich also identified other important roles
for HR function — particularly that of employee advocate, which he regarded as more than window dressing. However, even this
role appears different from what is implied by the term; it refers to representing employees in the event of a plant closure – with
no mention of trade unions – and in dismissing those whose performance is unacceptable. Of course these are key aspects of the
HR role, but they hardly add up to employee advocacy. In other words, even if HRM tries to address workers' needs, it seems to
miss the point. As Van Burren et al. (2011, p209) note, HR managers ‘have made the shift to a strategic mindset. In so doing, they
have marginalised employee-focused HRM responsibilities and ethics activities.’
The CIPD (2011) acknowledges that there is only limited work on evaluating the contribution of the HR function, which is surpris-
ingly given the increased usage of alternative forms of HR delivery, the enduring obsession with cost reduction and the long-held view
that HR is ‘big hat and no cattle’ (Guthrie, Flood, Liu, MacCurtain, & Armstrong, 2011). HR is in an ambiguous position, and on cost
grounds alone its presence can be questioned, whilst the contribution of HR specialists is hard to quantify because they depend so
much on line managers to put policies into effect. However, Guthrie and his colleagues also report that general managers are more
positive about HR when the organisation is pursuing high commitment HRM because human capital is so important in this situation.
At a country level though, HR tends to be under-valued given a UK (and US) culture that puts a primacy on short-term financial targets
rather than longer term organisational sustainability.
Service level agreements (SLAs) could provide a useful way of measuring stakeholder satisfaction with HR but, unfortunately,
these agreements typically specify timescales for completion of tasks rather than quality of service, and whilst necessary they are
not a sufficient measure of HR effectiveness. Moreover, there are major pitfalls in adopting this approach because HR may find that
in trying to satisfy internal customers, it becomes their servant instead. For example, allowing line managers to define HR goals can
undermine the judgement of HR professionals and encourage short-term targets. As Armstrong (1995) cautioned many years ago,
by trying to quantify its contribution HR is basically succumbing to the dominant accounting culture which will lead to significant
role changes. Pfeffer (1997, pp363–364) argues that HR is unlikely to win because other departments have more experience of this
context — and they also set the rules! He warns that ‘if all HR becomes is finance with a different set of measures and topic domains,
then its future is indeed likely to be dim’ (p364). Focusing on costs is too narrow, and it is better to identify how the HR function can
add value (Toulson & Dewe, 2004).
Another option is to benchmark against other organisations, and in the UK ratios of HR staff to the overall workforce are published
annually by Expert HR. In the 2012 survey, Murphy reports that there is on average one member of the HR function to 80 staff, with
higher ratios in the public sector (1:120) than in manufacturing (1:106) and private sector services (1:62). Employers with less than
250 staff have a ratio of 1:57, whilst for those employing between 250 and 1000 it is 1:93 and for larger organisations it is 1:117.
 M. Marchington / Human Resource Management Review 25 (2015) 176–187 181

However, median figures also mask wide differences within sectors. Unfortunately, data is no longer published in this form but Crail
(2008) showed that whilst overall the median was 1:118, the upper quartile figures for the public sector were 1:186 compared with
1:250 in the private sector and 1:253 in manufacturing whilst the lower quartile figures were respectively 1:76, 1:63 and 1:69. This
demonstrates the limitations of benchmarking because the median figure is not particularly meaningful. Moreover, it tells us nothing
about the quality of HR staff in these organisations; some might be staffed largely by people with professional qualifications whilst
others have no-one from this background. It also fails to take into account the extent of outsourcing, so a high ratio might obscure
the fact that much of the work is done via contracted-out call centres. Finally, it is hard to draw conclusions from these ratios; if an
organisation is above average, does this suggest a need to cut HR staff without considering the value added by their contribution?
This all shows that HR needs to be alert to roles other than strategic business partner and not focus solely on satisfying senior
executives whose principal concern is with short-term goals and often cost reduction. HR can offer a different perspective from
other managerial functions, and needs not to lose sight of how it can contribute to long-term organisational performance. An
obsession with strategic business partnership can lower the legitimacy and authority of HR for other stakeholders.

3.3. The belief that top talent and leaders make all the difference

One consequence of focusing on organisational performance and strategic business partnership is that HR attention is directed
more explicitly at senior managers and potential leaders. This is obviously important because HR would always struggle to get recog-
nition if it was not involved at board level or failed to meet the objectives of senior executives. Moreover, given that resource-based
views of the firm are now more dominant in HRM (Allen & Wright, 2007), interest has shifted to those workers whose contribution is
seen to be critically important; that is, those regarded as having unique skills and adding most value to organisations (Lepak & Snell,
2007). This group includes ‘rainmakers’ (Boxall & Purcell, 2011), employees that are thought to make a sizeable difference to
organisational performance and tend to be treated much better than other workers. This has led to an increased emphasis on talent
management and leadership but, as a consequence, it also means that there has been a parallel lack of recognition for those making up
the main body of organisations, and even more starkly on those who work for contractors. We examine the first part of this here and
address sub-contracting in Section 3.4.
Talent management is about the identification, nurture, progress, reward, and retention of key individuals who can aid the
development of organisational sustainability (Collings & Mellahi, 2009). Broadly there is a distinction between the inclusive and
the exclusive definitions of talent management. The former is concerned with opportunities for all employees to reach their full
potential, and it tends to be seen as synonymous with HRM in general. The latter, more dominant understanding derives from
work at McKinsey where the term the ‘war for talent’ was first used (Michaels, Handfield-Jones, & Axelrod, 2001) in anticipation of
shortages in leadership talent. This sees talent management as identifying a small number of individuals (A-grades) who are expected
to contribute significantly to organisational goals and have greater resources focused on them. Many organisations subscribe to this
approach and target senior managers or those with high potential as part of succession planning. As Collings and Mellahi (2009,
p304) note, talent management involves ‘the systematic identification of key positions which differentially contribute to the
organisation's sustainable advantage, the development of talent pools of high potential and high performing incumbents to fill
these roles, and the development of a differentiated human resource architecture to facilitate filling these positions with competent
incumbents and to ensure their continued commitment to the organisation.’
There are clear dangers in adopting the exclusive model and lavishing scarce resources upon the few. For example, mistakes can be
made irrespective of where talent is sourced. Recruitment and selection, and performance management systems do not always
accurately determine individuals' potential for inclusion in the talent pool, especially at an early stage in their employment with
the organisation when those who could make a difference may be overlooked. Where a few employees are favoured over the majority,
this can limit the development of social capital and undermine teams, networks and trust relations in organisations (Boxall & Purcell,
2011). Favours given to an elite group can cause tensions between talent management and an embedded ethos of equality, diversity
and fairness (Harris & Foster, 2010). In their case study, although talent pools were created, this was counter-balanced by the promo-
tion of positive action in relation to women, ethnic minorities and those with disabilities.
More broadly, if training is being squeezed, decisions are required whether to apply resources to the few, or maintain commitment
to spending on all; focusing resources on a few talented individuals may be counter-productive, especially for front-line managers
who are being required to meet more stretching targets. Furthermore, getting rid of ‘C’ graded personnel is naturally fraught, as is a
policy of filling all positions with ‘A’ performers. Both would be unrealistic for many organisations and actually non-strategic when,
for many jobs, adequate performance may be acceptable (Lewis & Heckman, 2006). Interestingly, research on two groups of workers
in a professional service organisation by McClean and Collins (2011) found that although key workers did contribute significantly to
performance, those occupying what were deemed as ‘less valuable’ groups were still treated well. This was not only because of their
contact with customers but also because employers were concerned that tensions between staff and inconsistencies in treatment
could undermine morale and teamwork across the organisation.
This focus on top talent is problematic because it ignores (or at least appears to ignore) the talents of those workers responsible for
product quality and customer service. Such ‘job-based’ employees (those with lower skills but relatively central to the organisation's
mission) might accept that ‘key workers’ are lauded during the good times because they too are doing relatively well financially and
see a secure future ahead of them. However, employee confidence in leaders can soon dissipate when there is an economic downturn
and their own jobs are at risk, a feeling that is reinforced when executives are sacked but still receive high pay-outs.
Turnbull and Wass (2011, p277) report that between 1975 and 2008 the pay of people in the top 10% in the UK rose significantly
faster than those in the bottom 10%. However, given state support to those at the very bottom of the ladder via the minimum wage, the
182 M. Marchington / Human Resource Management Review 25 (2015) 176–187

differential between the 90th percentile and the 30th percentile is even starker, and it was especially pronounced between 2000 and
2008 when the former saw earnings grow almost three times faster than those at the 30th percentile. The Coalition government's aus-
terity programme has increased this gap yet further; for example, whilst the ratio of top pay to the workforce average in large UK firms
grew fivefold over the last thirty years, between 2010 and 2011 alone, executive pay rose by nearly 50% whilst many private sector
blue collar workers lost their jobs or accepted short-time working to stave off redundancy and public sector workers entered a
three-year pay freeze (High Pay Commission, 2011). The British Social Attitudes Survey shows that this leads to resentment with a
large majority of respondents (nearly 75%) feeling that the pay of company directors in large firms is now too high (High Pay
Commission, 2011).
Connected with this has been a stronger focus on leaders and especially their portrayal as agents of change and transformation in
organisations. Bass and Bass (2009) and Kempster (2009) argue that there are three broad perspectives on leadership related to:
(1) the traits or attributes of leaders; (2) exchange relations between leaders and their teams; and (3) leadership styles depending
on the context or situation. The first of these seems to have gained prominence recently, thus presenting a major challenge to pluralist
versions of HRM by reinforcing the view that high performance is largely, if not entirely, due to the skills and attributes of leaders. In
brief, this perspective suggests that leaders have personal attributes which are immutable and can achieve success in any context
whatsoever: attributes such as charisma, inspiration, transformative ability, drive, passion, integrity and heroism. Despite major crit-
icisms of trait-based theories, they still hold a key place in the literature and in popular versions of leadership. As Storey (2004, p19)
notes, ‘this individualised interpretation is fuelled by the media (as) business magazines are especially prone to focus on the supposed
crucial impact of top managers…Certain chief executives become lionised and company fortunes are deemed to be closely linked to
the actions of these figures.’
An additional challenge to HRM is that ‘heroic’ or charismatic leaders may not be quite so fantastic to work for, and given their
profile they are unlikely to admit further learning and development is needed. A study of Enron in which leaders displayed highly
inappropriate behaviours – such as bullying and corruption – showed how the emphasis on leaders (rather than leadership) can be
unhelpful (Iles, Meetcoo, & Gold, 2010, p259). There are also concerns that charismatic leaders might be narcissistic which can lead
them to be destructive but the literature tends to emphasise their heroic displays rather than toxic behaviour which Pelletier
(2010) characterises as:
• Attacks on followers' self-esteem (demeaning, ridiculing, mocking)
• Lack of integrity (being deceptive, blaming others for leader's mistakes)
• Abusiveness (displaying anger, coercing)
• Divisiveness (ostracising employees, inciting employee to chastise each other)
• Promoting inequity (exhibiting favouritism, being selective in promotions)
• Threats to followers' security (being aggressive, threatening employee's job security).
We see therefore that within organisations there has been greater emphasis on rewarding the efforts of so-called ‘top talent’ and
organisational leaders. Whilst this might be seen as important, it is clear that heroic leaders can be destructive as well. Moreover, it has
produced a parallel decline in attempts to develop sustainable models of HRM within organisations and provide an inclusive perspec-
tive on talent. This also has repercussions beyond organisational boundaries, especially for relations between clients and supplier
firms.

3.4. Lack of concern for HRM at supplier firms

Sizeable differences between treatment of senior managers/top talent and front-line workers within organisations are even more
marked in relation to differentials between the former and workers in supplier (or peripheral) firms and temporary work agencies.
This part of the economy is now very significant, especially in liberal market economies such as the UK and the USA (Forde &
Slater, 2005; Mitlacher, 2007) but it has also grown in coordinated market economies such as Germany, France and Sweden
(Doellgast, 2009; Shire, Mottweiler, Schonauer, & Valverde, 2009). People working for sub-contractor firms typically work at different
sites from their clients, and in some cases sub-contracting involves several employers along a single supply chain. However,
employees from different organisations can also work alongside each other as in the case of agency staff used for contracts in schools,
offices and call centres. The key point is that they are not the direct, legal responsibility of the client organisation's HR function, nor are
they subject to the same employment procedures and substantive terms and conditions (Marchington, Rubery, & Grimshaw, 2011).
This can be especially problematic for workers that have been transferred from a client organisation to a sub-contractor following a
business reorganisation which has cost-cutting as its principal objective.
Typically, those working for sub-contractors to major manufacturers or retail giants find that, even though they are not under the
direct, statutory control of client firms, their terms and conditions are heavily influenced, or in some cases determined, by them. In
either case, tight performance expectations relating to quality standards and just-in time delivery are written into contracts which,
in most cases, results in a worse employment regime, not only in terms of pay and conditions, but also in relation to disciplinary
and grievance procedures, opportunities for employee involvement and career development (Rubery & Urwin, 2011). Whilst there
may be business reasons for adopting contracts which are short-term, subject to change and carry greater risk, this creates major
problems for employees of supplier firms. The pressure on them to comply is increased because large clients typically work with
many different suppliers and shift orders between them to extract greatest value. In some cases, this leads to workers being re-
employed on contracts with new suppliers on even lower rates of pay in order to retain at least some of their income
(Marchington, Hadjivassiliou, Martin, & Cox, 2011). For example, Dube and Kaplan (2010) demonstrate how outsourced janitors
 M. Marchington / Human Resource Management Review 25 (2015) 176–187 183

and security guards in the USA were paid less and had fewer benefits than their in-house counterparts. The wage penalty for janitors
ranged between 4% and 7% and for guards between 8% and 24%. Union membership was also an important factor, with outsourced
workers receiving a smaller union wage premium than their in-house counterparts, even if they were also unionised. The disparity
is even greater for workers employed by suppliers from less-developed economies (Marchington, Hadjivassiliou, Martin, & Cox,
2011) but there is also evidence (Edwards & Ram, 2006) that even UK-based suppliers find ways around legal constraints by
employing friends and family and/or illegal migrants.
Even if the client is classified as a ‘good employer’, those working for suppliers tend to be on inferior rates of pay, have lower levels
of employment security and fewer opportunities for career progression (Fisher, Wasserman, Wolf, & Wears, 2008; Holman, Lamare,
Grimshaw, Holdsworth, & Marchington, 2012). They may also be denied access to voice if the sub-contractor firm does not recognise
trade unions or offer any other mechanism for employee engagement. This is particularly complex when workers from two or more
different employers operate alongside one another on the same team, serving the same customers, yet enjoy wide variations in terms
and conditions (Batt, Holman, & Holtgrewe, 2010; Rubery, Carroll, Cooke, Grugulis, & Earnshaw, 2004).
This also applies to agency workers as terms and conditions, including access to valued fringe benefits, tend to be much less
favourable than for comparable workers on standard employment contracts (Purcell, Purcell, & Tailby, 2004; Shire et al., 2009). Sur-
veys suggest that this applies in a range of countries even when controlling for a number of personal and job effects (Forde & Slater,
2005), though this is worse for workers in de-regulated markets where lower pay may be accompanied by no provision for holidays,
sickness or severance pay. Lack of protection may also lead to a perceived need to work continuously to avoid going to the ‘back of the
queue’ for jobs (Burgess, Connell, & Rasmussen, 2005). Agency workers also face problems in raising grievances and ensuring that
they are included in communications at the place they work, as well as at their own employer (the agency). Issues which are commu-
nicated to in-house staff often have little meaning for someone who might be on site for days or at most weeks at a time, whilst agency
workers rarely interact with the agency itself unless they are looking for work. It is difficult in view of the ‘employment triangle’ and
the attendant dual (and potentially competing) sources of identity and commitment to ensure that agency workers receive integrated
and consistent messages (Marchington, Grimshaw, Rubery, & Willmott, 2005). Moreover, as Grimshaw, Earnshaw, and Hebson
(2003) note, supply teachers find it hard to persuade union representatives to progress their concerns since these are typically
different from those affecting in-house teachers on permanent contracts. At the same time, it is also hard to develop allegiances
with other agency staff because they are felt to be competing for the best jobs. To some extent, agency workers are invisible to all
concerned.
Thus, there is an even larger disparity between the treatment of top talent at client firms and job-based workers employed by sup-
pliers or agencies, and in effect the former receive double indemnity from uncertainties created by intense product market pressures.
This is no longer a phenomenon restricted to liberal market economies either as firms in coordinated market economies are now using
agencies more extensively. As we see in the final section, however, there are some actions employers can take to mitigate the worst
effects of this polarisation and benefit both employers and the workers concerned over the longer-term.

4. Conclusions, implications and ways forward

In summary, it has been argued that HRM has been too busy trying to satisfy short-term performance goals to notice where it is
heading in the longer-term. Focusing primarily on the goals of shareholders and senior executives has meant that other stakeholders
have been neglected to the detriment of the long-term sustainability of HRM and the role that employers should play in society. Ob-
session with the strategic business partner role has meant that HRM is not sufficiently embedded within organisations as substantial
elements of the HR role have been outsourced or become the responsibility of line managers. This has been reinforced by an increased
emphasis on top talent, which is understandable from a business perspective, but counter-productive if front-line workers feel that
they are under-valued. Finally, there is a substantial gap between the position of top talent and those employed by suppliers and
sub-contractors, not only by firms in developing countries but also by suppliers within developed economies as well. Put together,
this presents quite a challenge for HRM and the HR function.
This is not to suggest that HRM has got everything wrong or that its activities are useless and/or misguided; far from it. HRM needs
to create a more sustainable, long-term contribution underpinned by an emphasis on inclusivity, as opposed to aiming primarily to
satisfy the goals of shareholders and senior executives and pay undue attention to the elite. Some might claim that such ideas are
inappropriate in such a difficult economic climate, but there are signs that some organisations are taking action to rebalance business
priorities and thus create a more forward-thinking view of HRM. Following the sequence of earlier sections, here are some suggestions
for change.
Firstly, the balanced scorecard approach has long been presented as an alternative to focusing primarily on short-term profit
maximisation (Kaplan & Norton, 2001, 2007). It proposes a balance between four different perspectives on business performance,
one of which – learning and growth – relates to the skills and knowledge of the workforce and cultural shifts to motivate, empower
and align workers with organisational strategy. Unfortunately, this does not treat employees as stakeholders per se, but rather regards
them as contributors to customer satisfaction and financial performance through their actions (Marchington & Wilkinson, 2012). As
Boxall and Purcell (2011) state clearly, HRM should be helping organisations to achieve social legitimacy, which means a more explicit
promotion of the HR balanced scorecard. Paauwe (2004) attempts to do this by proposing the use of factors such as fairness, trust,
integrity and open information sharing as key elements in such an approach. These factors evaluate the extent to which decent
work is provided, there is a living (as well as a minimum) wage in countries, employees feel that they can trust their line managers
and get answers from them, and employee engagement becomes a meaningful practice in organisations (MacLeod & Clarke, 2009).
Sengupta and Whitfield (2011) outline a number of stakeholder-based sustainable performance indicators. These include, for
184 M. Marchington / Human Resource Management Review 25 (2015) 176–187

employees, fair and equitable working conditions, a balanced workforce profile, average pay relative to industry standards, confiden-
tial grievance procedures, extensive training and development, and the use of employee surveys that are taken seriously. In short, ‘this
means complying with labour law and important social customs in the countries in which the firm operates. Supporting the firm's vi-
ability through cost-effective and socially legitimate HR activities must come first, or the firm simply will not survive in the industries
and societies in which it is located’ (Boxall & Purcell, 2011, p334).
A couple of recent British examples show the way forward. The Chartered Institute of Personnel and Development (CIPD), the
professional body for HR, re-defined its purpose in 2013 as ‘to champion better work and working lives, through improving people
management and development practices to build greater value for individuals and organisations, benefiting economies and society’.
This demonstrates a clear commitment to engage with a range of stakeholders and offer benefits not only at the individual and
organisational level but also in a wider societal context. Peter Cheese (2013, p7), the CIPD's Chief Executive, recently followed this
up by arguing that HR practitioners should have the courage to contest decisions to ‘ensure that we are standing up to the wider
failings of corporate culture and business practice and have the confidence to challenge and engage’ with business leaders. In a
separate development, the incoming Chief Executive of Barclays announced a new set of values, such as respect and integrity,
which though hardly novel to the world of management education, is a step-change from the previous few years. More crucially,
he stated that success in five years time should be measured by, amongst other things, high levels of employee engagement through-
out the organisation.
Second, greater emphasis is needed on the employee advocate role in relation to front-line workers, both in terms of their own
well-being and their contribution to organisational success. The Appelbaum, Bailey, Berg, and Kalleberg (2000) model shows how per-
formance is influenced not only by the ability and skills of staff (A) but also by their motivation (M) and the opportunity (O) they are
given to contribute to decision-making and use their discretion at work. As line managers now play a key role in motivating and en-
gaging staff on the front line (Purcell & Hutchinson, 2007), it is vital that they are encouraged to take HRM more seriously. This is even
more essential because HR specialists are less available at workplace level and transactional work is increasingly outsourced. More
therefore rests on how line managers interpret corporate goals, implement HR policies and address problems which shape their
team's experience of work. Their responsiveness to employee suggestions, effectiveness in dealing with difficult situations and sup-
port given to staff – in terms of career advice or follow up to an appraisal interview, for example – is known to accentuate the positive
effects of organisational justice (Piccolo, Bardes, Mayer, & Judge, 2008). In the absence of specialist HR advice, line managers are un-
likely to give sufficient weight to people management compared with operational goals; this is worrying as good line manager–work-
er relations and effective HRM policies are known to have a strong impact on performance (Purcell & Hutchinson, 2007).
Therefore, it is essential that HR business partners offer support and advice to front-line managers as well as contributing to
strategy. Buyens and de Vos (2001) found that line managers did not feel that they gained much from HR as a strategic partner but
that added value came from administrative expertise, managing costs and delivering core HR services such as recruitment and train-
ing. Gibb's (2001) survey of over 2600 employees in 73 organisations found HR was valued most for interpersonal relations (such as
being approachable, helpful and prompt) and professionalism and knowledge (such as confidentiality and advice). Given the reduced
front line role of HR, this is an even greater priority for employees.
Third, rather than concentrating primarily on top talent and leadership, HR has to enhance employee engagement for all workers.
Staff surveys that target all employees are now more widely used and since MacLeod and Clarke's (2009) report, employee engage-
ment has become even more prominent in the UK (Purcell, 2010). It has since been reinvigorated through a taskforce to disseminate
ideas more widely and develop evidence-based case studies illustrating good practice. This movement (‘engage for success’) receives
strong support from the Involvement and Participation Association (IPA), major employers and the lead bodies for employers and
trade unions in the UK, as well as some academics. According to the IPA, there are four main drivers of employee engagement:
leadership, but of a more inclusive and reciprocal nature than the trait-based theories assume; engaging managers who facilitate
and empower rather than control or restrict their staff; voice through processes and systems that seek out employee views and
make sure that their opinions count; and integrity seen in behaviours that reinforce the organisation's stated values.
Employee engagement is also being pushed in other parts of Europe (Watson Wyatt, 2009) and the USA (Welbourne, 2011) where
findings suggest that it can lead to substantial improvements in productivity, sick leave, quit rates, trust in management and employee
relations climate. Interestingly, the UK Government's Department for Business, Innovation and Skills financed adverts in a range of
locations a few years ago to publicise the view that employee engagement leads to improved organisational outcomes. However, it
is also critical to embed direct employee involvement more effectively within organisations through better communications and
consultation with workers and their union representatives where appropriate (Cox, Marchington, & Suter, 2009; Marchington,
2015). In addition, it has been shown that informal participation by line managers can provide a valuable stimulus for enhanced em-
ployee trust and improved performance at local level (Marchington & Suter, 2013).
Finally, there is evidence that some organisations are attempting to exert direct and indirect pressure on their suppliers to imple-
ment more progressive HR practices (Koulikoff-Souviron & Harrison, 2007). A variety of direct pressures – such as codes of conduct,
stricter procurement standards, approved supplier lists and supplier development programmes – provide a diffusion mechanism capa-
ble of producing significant changes in HRM at supplier firms. Winfield and Hay (1997) described how Toyota's supplier development
programme aimed to push its suppliers to align their HRM policies with those of Toyota by promoting of team-working, enhanced train-
ing and greater employee involvement. Similarly Nike, in response to negative publicity about its global supplier network, introduced a
Code of Conduct requiring suppliers to conform to basic labour, environmental and health and safety standards (Locke, Qin, & Brause,
2007). The Code stipulates, inter alia, that employees working for its suppliers worldwide should enjoy freedom of association and be
paid the country's minimum or industry's prevailing wage (whichever is higher). Supplier audits cover HR practices such as recruit-
ment, fair treatment, communications, and pay and working conditions.
 M. Marchington / Human Resource Management Review 25 (2015) 176–187 185

Given that inadequate HR systems can reduce the quality and reliability of products, as well as damage corporate reputation, this
has stimulated attempts to achieve sustainable sourcing for labour standards (Wright & Brown, 2012). Community groups have had
some success in persuading employers to introduce more progressive HR systems as Erickson, Fisk, Milkman, Mitchell, and Wong
(2002) report in the ‘Justice for Janitors’ case. In a similar vein, MacKenzie (2010) analyses how an Irish trade union secured recogni-
tion rights for outsourced workers in the telecommunication industry, whilst Wright (2011) notes that several strategies being used
by British unions to organise agency workers in both the private and public sectors.
In short, some of these ideas mirror Legge's (1978) view that there were three roles that ‘personnel’ could occupy: conformist in-
novator; deviant innovator; and problem-solver. Given the perceived need to appeal to boardroom interests and fit with dominant
managerial ideologies, in my view too much emphasis in recent years has been on the first of these roles and too little on the others.
This has led to a neglect of what is distinctive about HRM; recognition that there is a range of stakeholders; ability as a profession to
find ways of challenging other functions about their ideas; and attempts to balance the competing demands of different constituents,
both within and beyond their own organisation. My preference is for a new term, ‘creative innovator’ as it chimes rather better with
the current climate times and shows how HR can be creative as opposed to being seen as ‘deviant’. In advancing both a moral and a
business case for long-term sustainability, HR can enhance its contribution by putting forward ideas to promote organisational success
through a more balanced engagement with all stakeholders.

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