Project Management of HRM: Outsourcing the HR, Dissertation – Literature Example

The conceptual approach taken by Alewell et al. (2007) entailed the use of transaction cost theory to examine the phenomenon of HR outsourcing (p. 272). The authors utilized the research methods of thoroughly reviewing the relevant literature, noting the continuing prevalence of classical models for “comparing operational costs and strategic management approaches”, and arguing for the importance of transaction cost theory in light of the division of labour (pp. 272-274). The article is well-researched, and has tremendous explanatory power. A particular strength is the case for the importance of knowledge, values, and attitudes in any consideration of organizations’ decisions to outsource HR functions (pp. 278-279). This section is especially well-argued. The only arguable weakness ascertainable is a lack of more discussion about the possible effects of firm size and organizational structure, topics which the authors touched on, but which might merit further analysis. In the essay, I drew upon this source for its excellent description of the “make-or-buy” dilemma which confronts organizations with regard to their HR decisions: the trade-off between satisfying their own HR needs internally (‘making’ them), and buying them will look different based on their own needs for labour, as well as their capacities and many other factors (pp. 275-279).

Drawing on data from state governments as well as the National Association of State Personnel Executives and other organizations, Andrew (2012) examined the ways in which HR outsourcing is used by American state governments to realize substantial benefits (p. 45). I found this source very useful for its description of the benefits of HR outsourcing in the American public sector, and how state governments can best realize success. In the essay itself, I used this source for information about how American states are using HR outsourcing to realize tremendous savings of taxpayer dollars, specifically through strategic partnerships that enable them to secure highly competent professional HR services (p. 47). Although informative and interesting, I did feel that the article would have benefited from a more thorough exposition of the research data, in order to bolster the claims made by the author. In hindsight, I think this article would have been best replaced by another source.

Using the well-established resource-based view (RBV) of the firm, Karthikeyan, Bhagat, and Kannan (2011) examined how firms make the decision to outsource HR or keep HR functions within the organization (p. 87). Drawing on the literature extensively, these authors identified a significant lacuna: while the literature has analyzed HR outsourcing decisions in terms of core versus peripheral functions, the RBV offers a new way of looking at such decisions in terms of capacities and competencies, including social capital (p. 88). The authors’ proposed five factors that should affect decisions to outsource HR or not are revealing and enlightening, and the underlying rationales for each are very well-argued: in brief, certain kinds of social capital within a firm that relate to HR functions, as well as the strategic value of HR functions and other factors, should lead firms to not outsource these functions (pp. 88-89). It is difficult to ascertain any weakness in their methodology or argumentation. In the essay, I drew upon this fascinating article to explain the RBV model, with its focus on resources and capacities, as well as to articulate the authors’ ideas about which HR functions should not be outsourced. Indubitably, this article was well-suited to the essay.

Drawing on dynamic HR planning theory and their own extensive research with current HR outsourcing cases and approaches, Khanna and New (2005) outlined a model of HR planning for outsourcing (p. 37). The different elements of the model are all very well supported, with ample citations in the literature, and the authors certainly do an outstanding job of explaining the underlying rationale for each element. However, I thought the article could have been improved by a more thorough analysis of the relative trade-offs between different kinds of HR outsourcing and more traditional alternatives to HR outsourcing, such as temporary workers, cross-trained employees, and the like. For example, it would be interesting to see how cost savings and efficiency line up for similar organizations using different approaches in this regard. In the essay itself, I utilized this article to explain the salient elements of a well-planned HR outsourcing transition, and in this capacity it served the essay well.

Klaas, McClendon, and Gainey (2001) drew upon survey data from members of the Society of Human Resource Management (SHRM) with titles of either “Vice President or Director of Human Resources” (p. 130). Using these questionnaires, they were able to ascertain which specific organizational characteristics influenced decisions to outsource HR activities (p. 132). The methodology was flawless, and the conclusions were extremely revealing: these authors’ finding that idiosyncratic practices of managing employees were likely to decrease outsourcing of HR functions accords well with the argument of Karthikeyan et al. (2011) that certain forms of social capital should encourage a firm to keep the relevant HR processes internal to the company. Another finding was that functions with great strategic value were likely to be outsourced—and this actually contradicts Karthikeyan et al. I used both of these findings in the essay as examples of the kinds of organizational variables that affect HR outsourcing, and certainly the article was well-placed.

Lievens and Corte (2008) sought to ascertain what factors are salient in the decision of HR managers to maintain extant outsourcing relationships with HR providers. Through the lens of transaction-cost economics (TCE), these authors conducted semistructured interviews with HR managers and senior consultants in order to ascertain possible influences of continuance commitment and affective commitment (pp. 560-563). Their arguments were very well-made, and the methodology was well-crafted: in particular, the relation between TCE theory and social exchange theory was well articulated, and I did not ascertain any weakness (p. 562). In the essay, I utilized the findings of the article that affective commitment, but not continuance commitment, influenced decisions to continue HR outsourcing relationships, and the study was certainly apt in this regard.

Mahmud, Billah, and Choudhury (2012) examined the HR outsourcing decisions of companies in Bangladesh’s telecommunications sector, using questionnaire data collected from HR division officers and secondary data from companies’ financial records and other documents (p. 77). In the essay, I utilized their findings that there was a prioritization of HR functions for outsourcing: recruiting and selection was first; appraisal, second; training and development, third, and so on down to temporary staffing at ninth place (p. 79). On balance, I think I would have been better served with a different study: although the prioritization was very interesting and confirmed some of the other findings presented in the essay, I felt that their analyses of the causes of outsourcing versus not outsourcing left something to be desired in terms of thoroughness and integration with theory and the literature.

Ordanini and Silvestri (2008) drew on the RBV and the TCE to ascertain what the recruiting and selection (R&S) outsourcing decisions of Italian firms might be: they conducted interviews with top-level HR officers and managers of HR service providers (p. 379). Their methodology was very thorough, and their findings that perceived adequacy of firms’ own HR departments was negatively correlated with HR outsourcing decisions accords well with other literature used in the essay. However, if anything this source was under-used in the essay, inasmuch as I only used it to make the point that decisions to outsource R&S were positively correlated with HR outsourcing in general (p. 383). Given the rigorous methodology and lack of any ascertainable weakness, my determination is that I should have used this source more.

Bibliography

Alewell, D et al. 2007, ‘Outsourcing HR Functions’, Management Revue, vol. 18, no. 3, pp. 271-292, viewed 10 January 2013, EBSCOHost, http://www.search.ebscohost.com/

Andrew, B 2012, ‘HR Outsourcing can boost savings and service’, Public Manager, vol. 41, no. 3, pp. 45-49, viewed 10 January 2013, EBSCOHost, http://www.search.ebscohost.com/

Karthikeyan, S, Bhagat, M & Kannan, N. G. 2011, ‘Making the HR Outsourcing Decision—Lessons from the Resource Based View of the Firm’, International Journal of Business Insights & Transformation, vol. 5, no. 1, pp. 87-95, viewed 10 January 2013, EBSCOHost, http://www.search.ebscohost.com/

Khanna, S & New, J R 2005, ‘An HR Planning Model for Outsourcing’, Human Resource Planning, vol. 28, no. 4, pp. 37-43, viewed 10 January 2013, EBSCOHost, http://www.search.ebscohost.com/

Klaas, B S, McClendon, J A & Gainey, T W 2001, ‘Outsourcing H: The impact of organizational characteristics’, Human Resource Management, vol. 40, no. 2, pp. 124-144, viewed 10 January 2013, EBSCOHost, http://www.search.ebscohost.com/

Lievens, F & Corte, W D 2008, ‘Development and test of a model of external organizational commitment in human resources outsourcing’, Human Resource Management, vol. 47, no. 3, pp. 559-579, viewed 10 January 2013, EBSCOHost, http://www.search.ebscohost.com/

Mahmud, K, Billah, M M & Chowdhury, S M 2012, ‘Human resource outsourcing: A study on telecommunication sector in Bangladesh’, International Journal of Business & Management, vol. 7, no. 10, pp. 74-84, viewed 10 January 2013, EBSCOHost, http://www.search.ebscohost.com/

Ordanini, A & Silvestri, G 2008, ‘Recruitment and selection services: Efficiency and competitive reasons in the outsourcing of HR practices’, International Journal of Human Resource Management, vol. 19, no. 2, pp. 372-391, viewed 10 January 2013, EBSCOHost, http://www.search.ebscohost.com/