PART I: IMPACT OF HRM ON COMPANY PERFORMANCE AND EMPLOYEES 1. Sosiological perspectives on economic performance and employee well-being

Abstract

In our research we set out to research organizational success from a wide social scientific perspective. Our argument is that organizational success should be analysed as a totality incorporating both economic performance and social well-being. As sociologists we are to an extent critical of traditional managerial thinking. The criticism is directed in particular at the economic rationality and the “thinness” of the social dimension. This applies both to the narrow concept of well-being and the conception of employees as “human resources” instead of “complete human beings”. Our empirical research is based on a sample of 106 Finnish work organizations representing all sectors of economy and all geographical areas. The research material consists of an employee survey data coupled with organization level variables (N=1177) and qualitative interviews of managers and shop stewards or other employee representatives. We are confident that the inclusion of both employer (organization) and employee perspectives both in qualitative and quantitative form in one representative data, provides a more complete view on organizational reality, than is the case in most social scientific, economic or managerial research on work and organizations. In the paper we analyse the connections between economic and social success and organizational processes. Our research indicates that economic and social success do indeed correlate positively. However, this relationship is not particularly strong and by no means mechanical or linear. Work organizations do differ in significant ways, even within a certain line of business. At best investments on employee well-being, which build trust and commitment, can have real economic value by increasing the efficiency and innovation capacity of the organization. In some cases economic success can also be achieved at the cost of employee welfare but this rarely is a sustainable strategy. We also emphasize the need for further comparative research on organizations and organizational strategies. INTRODUCTION: THE FRAMEWORK Management literature emphasizes concentration on core functions as a key strategy for companies in adapting to intensified competition and to quickening pace of structural and cyclical changes in the economy and society. Another emphasis in the literature is on knowledge management and production of intellectual capital as key corporate strategies in gaining competitive advantage. (Edvinson & Malone 1997, Roos et al. 1997, Stewart 1998, Prichard et al. 2000, Nonaga & Nishiguchi 2001). The primary focus in the creation of intellectual capital is on fluidity of social relations and interactions within the organization. This is the background for the renewed interest in the so called high-trust workplace that Alain Fox (1974) introduced quite some time ago. Concepts such as corporate culture, social capital, trust, commitment and high-competence management have become central to this discussion (Nahapiet & Ghoshal 1998, Boxall & Purcell 2003, Ruuskanen 2003, Halpern 2005).

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Cite this paper

@inproceedings{Vanhala2006PARTII, title={PART I: IMPACT OF HRM ON COMPANY PERFORMANCE AND EMPLOYEES 1. Sosiological perspectives on economic performance and employee well-being}, author={Sinikka Vanhala and Merja Kolehmainen and HELSINGIN KAUPPAKORKEAKOULUN and Raimo Blom and Jenni Ervasti and Marja H. Lepp{\"a}nen and Hannele M. J. Huhtala and Maarit Viljanen}, year={2006} }