The Development of Management and Leadership Capability and its ...

• As we will see, training is almost always one of the HRM practices associated with
superior organisational performance. This makes it very likely that management
training, as part of wider training, makes a positive contribution to organisational
performance. Indeed, in a synthesis of research in this area, Becker and Huselid
(1998) identify 'management development and training activities linked to the needs
of the business’ as one of four key HRM systems.
• Managers are an input to HRM as well as an output. Nearly all the HRM processes
identified as important in this research are ones which managers need to implement
through their personal skills e.g. high involvement of employees, performance
management etc.. Managers are also of course important deliverers of training and
development to other staff. So these positive HRM practices rely on good quality
managers for their delivery. This argument is especially important in some of the
most recent research (e.g. Purcell et al., 2003) that emphasises the quality of
implementation of HRM.
• This field is starting to lay down some clear markers as to conditions under which
HRM is most likely to support high performance. These markers mostly concern 'fit' -
of HR processes with each other and of HR strategies with business strategies. Again,
this work provides stronger support to the hypothesis suggested in the previous
section that management and leadership development is most likely to need this kind
of 'fit' if it is to raise organisational performance.
• For an excellent review of all but the most recent of these studies, see Richardson and
Thompson (1999). Only a few key studies will be used here to illustrate a much larger
published literature.
'High performance' HR practices
The key early studies of HRM and performance were mostly American and looked at
whether certain 'high performance', or 'progressive' work practices were associated with
higher organisational performance.
• Huselid (1995) examined 13 measures of HR practices for both managerial and nonmanagerial
staff in over 900 firms. The practices selected were so-called 'high
performance' work practices (quality circles, profit-sharing, appraisal etc.). One of
these HRM measures was the number of hours training over last 12 months. Measures
of HR and financial performance were reported at company level. Firms employing
these practices registered significantly lower staff turnover, higher staff productivity
and better financial performance over both the short- and long-term than those firms
that did not adopt the 'high performance' practices.
• Another wide ranging study, this time of 590 firms in the U.S. adopting ‘progressive’
HRM practices, including selectivity in staffing, training and incentive compensation
found these practices related positively to perceptual measures of organisational
performance. (Delaney and Huselid, 1996). These effects were similar in profit and
not for profit organisations.
• Pfeffer (1994) identified five top-performing US firms between 1972-92 based on
percentage of stock returns. These companies were characterised by 'high
commitment' work practices. Drawing on secondary data from the global automotive
industry and other industries, as well as evidence of 'best practice', Pfeffer claimed
that people management practices were enduring sources of competitive advantage
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