HRM and performance: the vulnerability of soft HRM practices during recession and retrenchment

Abstract

This multi‐method case explores how change in HRM implementation can impact performance metrics in a recessionary climate. Qualitative HR outcome data are mapped against financial metrics to explore adoption of hard‐line HRM practices in a major UK retailer. Despite record profits throughout the recession, the organisation responded strategically to worsening conditions in the labour market, firstly to maintain operational flexibility, but then to opportunistically enlarge jobs and intensify work to help achieve immediate gains in financial metrics, including a gain of 37 per cent in profit per employee over 3 years. These gains were achieved by derailing commitment‐based approaches to HRM, pointing towards the vulnerability of soft HRM systems during times of austerity or retrenchment.

The virtuous circle of human resource investments: A precrisis and postcrisis analysis

“…The firm specific knowledge and social complexities associates with long‐tenure workforce may erased in an employee depletion process (Shaw et al, ). Second, survivor employees may have lower morale and distrust management and may become less prone to cooperate (Cook, MacKenzie, & Forde, ; Lee & Miller, ; Muñoz‐Bullón & Sánchez‐Bueno, ; Zatzick & Iverson, ), thus undermining the desired situation in which workers identify and feel attached to the organization (Sahdev, ). For example, Markovits, Boer, and van Dick () on a sample of Greek employees support that an economic crisis has adverse effects on affections and moods, resulting in a downturn in employees' affective feelings of commitment towards their organization.…”

Union partnership as a facilitator to HRM: improving implementation through oppositional engagement

“…Finally, firm ownership structure and interactions between owners, managers and in some cases unions, may affect HRM implementation, where directors involved in management may incentivise different management behaviour than multiple uninformed owners. For example in the UK, shareholder models of ownership encourage short-term cost cutting (Cook et al, 2016) because incentives may work as a negative catalyst to HRM, making it difficult for managers to 'keep their side of the bargain, even if they want to' (Thompson, 2003: 366;).…”

Public sector employment relations after the crisis: A comparative case study analysis of UK local authorities

“…This may lead to the incremental 'layering' of new strategies on top of existing institutional frameworks (Streeck and Thelen, 2005). For example, even after the global financial crisis that arguably 'normalised' staff cutbacks and other labour cost reductions (Cook et al, 2016;Rubery and Johnson, 2018;Santana et al, 2017), public sector employers continued to uphold a broadly egalitarian approach to employment relations (Fredman and Morris, 1989) by making job cuts through voluntary rather than compulsory redundancies, and typically consulting with local trade unions over proposed changes (Van Wanrooy et al, 2013).…”