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JHOM
21,4/5 Human resource management and
performance in healthcare
organisations
448
Claire Harris, Penny Cortvriend and Paula Hyde
University of Manchester, Manchester, UK
Abstract
Purpose – The purpose of this paper is to compare the evidence from a range of reviews concerned
with the links between human resource management (HRM) and performance. The aim of the paper is
to review this diverse literature, and to derive human resource (HR) implications for healthcare
researchers, policy makers and managers.
Design/methodology/approach – Recent reviews of the human resource management and
performance literature are examined, in addition to the inclusion of a previously unpublished review.
Their methods, HRM focus, findings and recommendations are contrasted in order to produce this
review.
Findings – The paper finds that relationships have been found between a range of HRM practices,
policies systems and performance. Despite being an important concern for HR professionals, there is
little research exploring the link between HRM and performance in the health sector.
Research limitations/implications – The paper sees that recent studies have found HRM
practices to be associated with patient outcomes such as mortality, yet they yield little information
regarding the processes through which HRM affects individual performance and its consequent
impact on patient care. The use of approaches that seek to gain an understanding of workers’
interpretations of their experience, i.e. the psychological process through which HRM can affect
individual performance, may shed some light on how these processes work in practice.
Practical implications – The paper shows that increasing autonomy for healthcare organisations
in the UK, i.e. Foundation Trusts, may offer increased opportunity for locally tailored HR systems and
practices.
Originality/value – The paper presents findings drawn from a review of previous research on a
subject of increasing relevance to HR researchers and practitioners in healthcare organisations. The
paper indicates alternative approaches to research and practice in light of extant research.
Keywords Human resource management, National Health Service, Performance management
Paper type Research paper
Over the last decade a great deal of attention has been devoted to examining the links
between Human Resource Management (HRM) and organisational performance
(Wright et al., 2005). Despite this plethora of research, few studies have been conducted
in the UK health sector with a small number of exceptions (see, for example, Borrill
et al., 2000; Guest and Conway, 2004; Purcell et al., 2003; West et al., 2002; West et al.,
2006). This is curious, both because of recent attention to performance outcomes in
health care organisations and because HR seeks a strategic role. As a result, it has
Journal of Health Organization and become increasingly important for HR to establish hard evidence linking HRM to
Management performance outcomes. Along with other sectors, health organisations are concerned
Vol. 21 No. 4/5, 2007
pp. 448-459
q Emerald Group Publishing Limited
1477-7266
This research has been supported by the Department of Health, the Chartered Institute of
DOI 10.1108/14777260710778961 Personnel and Development and the Healthcare People Management Association.
with enhancing performance through HRM practices, systems and policies (e.g. Performance in
Department of Health (DH), 2006, 2005). healthcare
Recent trends in the UK have moved away from restructuring and reorganising
health services and towards modernising working practices (Hyde et al., 2005; DH, organisations
2002a, b). In 2000 the Government launched its strategy for the English NHS – The
NHS Plan (2000). This set ambitious targets for increasing staff numbers and
modernising the health service in England. To support implementation, the HR in the 449
NHS Plan (2002a) was launched. This pushed HRM to the forefront of the
modernisation agenda. Drawing on evidence from “magnet hospitals” in the USA
(McClure et al., 1983), which showed that progressive HR practices are associated with
better patient outcomes, HRM became a key driver for enhancing patient care. In this
paper we outline the research evidence that links HRM and performance and discuss
its applicability to the health sector.
Wall and Wood (2005) Control v. commitment Fifteen out of 25 studies report
Twenty-five studies Skills and structures v. motivation statistically significant positive
1994-2003 Work system v. HRM policies relationships between HRM
Example criteria – refereed HR planning v. hiring v. practices and performance
450 journals, 1994 onwards, development index and composite No compelling evidence of
multiple HR practices, index of HR sophistication synergy within HRM systems or
economic performance, Administrative HR v. human of any systematic strategic fit
highly cited studies capital-enhancing HR effects
Four types ranging from Reliance on cross-sectional
Innovative HRM – traditional evidence could overestimate the
HRM relationships between HRM and
Four types ranging from high to performance
low/high commitment Inadequate measurement of HRM
Five types ranging from cost, and poor measures of performance
quality, flexibility and time HRM could underestimate the strength
þ generic scale of the relationship between HRM
High involvement HRM index and performance
Strategic HRM practices It is premature to assume that
Skill level v. HR incentives þ HRM initiatives will inevitably
composite index result in performance gains either
High performance work practices in all situations or even where
Several combinations of HR deemed appropriate by
practices contingency arguments (p. 454)
Strategic HRM v. technical HRM
Combs et al. (2006) Incentive compensation HPWP have stronger effects than
92 studies, 1990-2005 Training individual practices
Example criteria – report Compensation level The relationship is invariant to
bivariate measures, HPWP Participation the choice of organisation’s
had to have been used Selectivity performance measures
broadly not restricted to Internal promotion HPWP have stronger effects
management, measure of HR planning among manufacturers than
HPWP had to reflect use of Flexible work service organisations
practice not value of practice Performance appraisal HPWP impact organisational
Grievance procedures performance through knowledge
Teams skills abilities; empowerment,
Information sharing motivation and social structure
Employment security and performance can lead to
investment in HPWPs (feedback
loop)
Organisations can increase
performance by 0.20 of a
standardised unit for each
increase in HPWP use (p. 524) Table I.
JHOM in the health sector which may not have been picked up in the reviews (see Michie and
21,4/5 West, 2004). The health sector studies will be discussed in the next section.
The reviews appear to draw very similar conclusions, for example Wall and Wood
(2005) indicate that “it is premature to assume that HRM initiatives will inevitably
result in performance gains” (p. 454); Boselie et al. (2005) indicate that “. . . it remains
the case that no consistent picture exists on what HRM is or even what it is supposed to
452 do” (p. 81); and Hyde et al. (2006) indicate that “there is insufficient evidence to suggest
that any one element of HRM may be superior to another in terms of its impact on
performance” (p. 45). The reviews all mention difficulties in, identifying the theoretical
perspective taken in each study, measuring HRM and performance consistently and
drawing causal conclusions about the HRM performance link due to the predominately
cross sectional nature of the research designs.
The meta-analysis paints a more positive picture and the authors attribute this to
the methods used to estimate the strength of the relationship between HRM and
performance. Combs et al. (2006) concluded that “by using meta-analysis to reduce the
effects of sampling and measurement error, our results lay to rest any doubts about the
existence of a relationship . . . we estimate that organisations can increase their
performance by 0.20 of a standardized unit for each unit increase in HPWP used”
(p. 524). Combs et al. (2006) also considered the strength of the relationship in
manufacturing and service sector organisations and reported that the relationship may
be stronger for manufacturing because of the routine, standardised nature of the work
“our results suggest that it might take different HPWPs to bring out the performance
potential of service employees due to the unique characteristics of service work, such
as low task interdependence, high work flow uncertainty and the role of the customer
in the process” (p. 521). Health sector work has similar characteristics to the service
sector in terms of workflow uncertainty and the role of the patient. This coupled with
other unique characteristics of the health sector such as types of HR practices used,
performance measured and process by which HRM is implemented in organisations
may mean that the most effective HRM systems are those that are tailored to specific
health settings.
Conclusions
This review of extant research linking HRM to performance has illustrated the
difficulty of establishing unequivocal links between single or multiple practices and
performance outcomes. In fact, the difficulties of separating out HR effects from the
wider context remain problematic. A recent meta-analysis indicates that HPWPs can
increase performance by 20 percent per unit (Combs et al., 2006). This finding is
important, given the suggested links between HRM and mortality (West et al. 2002). It
is important to establish how HR operates through individual performance in order to
illustrate how patients may be affected. Borrill et al. (2000) illustrated how this might
work in primary care through psychological constructs such as: commitment and
satisfaction.
The majority of findings, however, remain equivocal and it is arguable whether this
is a limitation of methodology or an oversimplification of a complex process. Boselie
et al. (2005) question the smooth sequential process between HR practices and HR
outcomes implying that HR techniques (the means of implementation and local
tailoring of HR practices) may have an effect on performance outcomes and this would
be important for healthcare organisations. Increasing autonomy for NHS Foundation
Trusts may allow for increasing tailoring of HR practices to suit local circumstances.
The equivocal nature of findings linking HR practices directly to performance
outcomes might suggest that it is not enough to have particular HR practices in place:
the potential impact of any HR practice or set of practices on performance may be
mediated by the effect of the implementation process on mental models of individuals
and thus on HR outcomes such as motivation, commitment and satisfaction. Further
JHOM research into how such process work with individuals in healthcare organisations
21,4/5 could illustrate how HR practices and HPWPs affect individual performance and
therefore how HR systems in healthcare organisations may be locally tailored to
maximum effect in terms of both organisational performance and improved patient
care.
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Further reading
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Department of Health, London.
Corresponding author
Claire Harris can be contacted at: claire.harris@mbs.ac.uk