Abstract

The question of how Human Resource Management (HRM) contributes to organizational performance has produced three perspectives (Boxall and Purcell, 2008). The universalistic perspective proposes that a bundle of high performance ‘best practices’ should be adopted which are independent of organization strategy (Katou and Budhwar, 2007). The contingency perspective proposes that rather than mechanically adopting best practices a fit between HRM and business strategy is important and that business strategy should precede and be tightly linked to HRM strategy (Schuler and Jackson, 1987; Dany et al, 2008). The configurational perspective takes the contingency perspective one step further, proposing that HRM should contribute to business strategy rather than just flow from it, and that simultaneous internal and external fit between the external environment, business strategy and HRM strategy are important (Ulrich and Brockbank, 2005). The contingency and configurational perspectives argue that HRM practices cannot be consistently applied to all organizations. In particular, practices suited to a price sensitive, high volume, commodity market may be