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From Adversaries to Partners?
Toward A New HRM Paradigm

Yonatan Reshef
School of Business
University of Alberta
Edmonton, Alberta

Scientific Management (SM), as practiced in North America, contained the seeds of its own demise for several reasons:.

  1. SM is a highly inflexible production system. Individuals typically know how to do only one task and cannot do other activities when necessary. The technology is inflexible because it is designed for a particular type of work that is expected to be performed in a relatively rapid manner.
  2. SM is a competitive hindrance in markets where consumers are not homogeneous; are willing to pay a premium for particular goods in order to distinguish themselves from others, and their tastes change rapidly.
  3. SM is associated with a high overhead, a result of the many supervisors and quality inspectors who are needed to closely control front-line employees. Some front-line employees actively work to "beat the system" by restricting their output and by producing low quality products even when supervision is tight. Thus, SM recreates problems it has come to solve -- restriction of output and harmonizing the worker and management interests.
  4. Raw materials are not as plentiful as they used to be and not as cheap as they used to be. To become more efficient, management should rely more and more on its human resources. Scientific Management is not the best approach one should use to motivate employees and increase their commitment to producing quality products and services.
  5. SM encourages absenteeism and high turnover among front-line employees as a means to coping with boring jobs and unpleasant working conditions.
  6. SM freezes employee creativity, flexibility, imagination, commitment, and motivation. Employees have no incentive to perform to the best of their physical and mental capabilities.
  7. The workforce is changing.  Younger, more educated employees expect more than just money from their work life.
  8. SM has been easily imitated by managers in developing countries where certain goods can be mass produced for a significantly lower cost than in North America.

Since the early 1970s, several recessions, deregulation, and mounting foreign competition have brought considerable pressures to bear on North American manufacturers. Slowly but steadily, management has been learning that quality, not only cost, is a key to market success. Understanding this management has adopted a new outlook toward their role and industrial relations function in the workplace.

We honestly believe that most people are naturally innovative, want to work hard, only don't because management doesn't create the kind of environment where they can (A Xerox manager).

In other words, at least in some companies, management now believes that workers want to work hard and if they don't, management is to blame. Moreover, managers, more and more, are learning that they cannot extract higher worker motivation and commitment without creating a supportive environment of high trust, openness, cooperation, and easy multi-directional communication. Once realizing that workers might perform better if their job is redesigned to fulfill both their mental and physical capabilities, management starts altering some of its traditional industrial relations beliefs, thus creating the culture necessary to support structural changes. This, in turn, implies a new role for management -- culture builders (compare with Mayo, 1945).

Growing management awareness of the link between worker motivation and commitment and a company's competitiveness underlies a radical change in a major assumption long-held by management and unions -- that industrial relations are adversarial by nature. Now, more and more, management is learning that industrial relations, when defined in mutualistic terms, can positively contribute to higher product quality and a better competitive position. Consequently, management started to implement various quality of worklife (Q.W.L.) programs and HRM policies aiming at the dual goal of making work more satisfying and improving product quality.

Q.W.L. improvements were an earlier stage in the development of the high-performance work systems. In the early 1980s, Q.W.L. programs emerged within a framework of concession bargaining in basic industries such as the steel, rubber, and automobile. By and large, they have been initiated by management, institutionalized through the concession bargaining process, and implemented with the help of unions. In return for its cooperative attitudes and tangible economic give-backs through collective bargaining, the unions gained voluntary recognition in certain new ventures, such as GM's Saturn, a seat on the corporate board, as in Chrysler, or more say at the shop level.

In the unionized as well as in nonunion firms, the movement toward greater worker participation in decision making has been most intensive at the shop level, where workers can have a voice in establishing production and quality standards and rules governing their relations with supervisors. This development marks a major change in management's traditional conception of HRM. HRM, instead of being perceived as a hindrance to the production process and marginal to management mainstream strategic functions (e.g., finance, marketing, mergers), has been incorporated into management's overall business strategy, hence the notion of strategic HRM.

Under the adversarial, scientific management approach, management's main desire was to make the utmost use of production machines to increase production totals. Management, therefore, had tried to isolate (buffer) the production process (core technology) from any, supposedly, obstructive HR element by either exhibiting an all-out resistance to trade unionism, or by supporting the principles of the adversarial industrial relations system. In other words, human resources has traditionally been viewed as a cost to be minimized.

In contrast, management's adoption of new HRM practices signals a significant overhaul in the function they have assigned to HRM. Nowadays, management is integrating HRM into an overall business strategy geared toward regaining, or maintaining, a competitive edge. In other words, HRM decisions and practices are expected to create value and not merely reduce costs. A benefit of this approach is that competitors cannot easily imitate high-performance HRM systems. It is very difficult to understand how these systems operate and, if understood, replicate complex social relations that underlie these systems and have developed over time.

Note, all this by no means implies that the long-existing management-labor conflict over resource allocation has been eliminated. What it does mean, however, is that management has learned how to manage part of it outside such long-established institutions as the grievance procedure and collective bargaining, in unionized settings; and outside the confines of SM-based practices in non-union settings.

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