This builds on a major research project carried out for CIPD by the University of Bath looking at how HR practice impacts on business performance. The work for this report was done jointly with a team from Cornell University in the USA. The report examines the ways in which organisations manage HRM when they are operating within complex networks of clients, suppliers, partners and regulators. In particular, it focuses on the key HR practices which are developed to manage people who have valuable and unique skills which are vital to the success of the organisation but who are not employed within it. Visit our Bookstore for more details and to find out how to order.
Key findings:
Implications of changing organisational form
- The move towards network-based organisations means that HR managers must now consider issues that exist across and outside the boundaries of the firm: they need to address the concerns of cross-boundary Human Resource Management.
- Attention needs to be given to the management of people who are central to the delivery of the products and services of the organisation, but for a variety of reasons they are not employed by the organisation.
- This requires the development of a series of boundary- spanning HR practices which involve the extension of practices which are traditionally used only for employees (i.e. individuals contracted to the organisation) to these important people who are outside the boundaries of the organisation (i.e. individuals contracted to a different organisation of self-employed but who deliver services within the organisation).
Framework for analysing cross boundary HRM
We need to develop a framework which evaluates human capital and the nature of network relationships to help us understand the issues involved in managing people outside the boundaries of the organisation:
- The nature of human capital varies in the extent to which the knowledge and skills involved are valuable and unique to the organisation.
- The characteristics of the networks within which organisations operate vary in terms of the types of relationships which exist. These networks differ in terms of their membership, the density of the relationships between these members (especially how frequently they interact) and the nature of the trust which exists between them (in particular whether the trust is fragile or resilient).
Analysing the case study
We apply this framework to help us understand the ways in which are large management consulting organisation uses boundary spanning practices to manage human capital outside the boundaries of the organisation.
- The network analysis of the case revealed a variety of relationships – some relationships were dense but fragile whereas others were sparse but more resilient.
- Our case study developed a series of sophisticated cross-boundary HR practices to facilitate the creation of valuable human capital external to the organisation to meet client needs.
- Recruitment, selection, training and development practices were extended beyond the boundaries of the organisation in co-operation with other members of the network to develop a pool of people who had unique and valuable knowledge and skills.
Implications of the findings
- We need to adopt a knowledge-based cross-boundary perspective if we are to understand the challenges and opportunities presented to HRM in professional service firms.
- The development of boundary-spanning practices represents the latest in a long line of changes in the role of HR and reflects the network-based organisations which have emerged.
- The use of these cross-boundary practices in the McKinsey and Co case represents the attempt to develop HRM practices that have a high commitment to human capital which is located outside the boundaries of the organisation.
- The issues of managing people who are not employed directly by the organisation are likely to become even more important as the network organisational form continues to spread and evolve across all sectors.
SWART, J., KINNIE, N., RABINOWITZ, J., LUND, M., SNELL, S., MORRIS, S., KANG, S-G. (2007) Managing across Boundaries: Human resource management beyond the firm. ‘Research into Practice’ report. London: CIPD.