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HRM outsourcing: the impact of organisational size and HRM strategic involvement

HRM outsourcing: the impact of organisational size and HRM strategic involvement Purpose – The aims of this paper are, first, to consider the impact of organisational size and the strategic involvement of the human resource management (HRM) function on the decision to outsource, second, to consider the impact of HRM outsourcing on organisational performance for organisations of different size and where the HRM function has access to positions of elevated political power. Design/methodology/approach – The research examines responses from 441 Australian senior HRM managers who participated in an online survey of a national HRM professional association. The hypotheses were tested using multiple regression. Findings – Although results did not confirm the expected relationship between smaller organisational size and increased outsourcing, there was a positive relationship between HRM strategic involvement and the decision to outsource. The relationship between HRM outsourcing and perceived financial performance was positive for smaller firms and negative for larger firms. The positive relationship between strategic HR involvement and organisational effectiveness was also enhanced when HRM activities were kept in‐house rather than when they were outsourced. Research limitations/implications – Overall, the research findings confirm advantages for smaller firms that seek out external HRM assistance. The results of the study also indicate that there are organisational benefits when an elevated strategic HRM role in an organisation is combined with the decision to develop in‐house HRM activities rather than externalise these responsibilities. Originality/value – Using political influence theory, the research applies an alternative theoretical perspective to the analysis of HRM outsourcing. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Personnel Review Emerald Publishing

HRM outsourcing: the impact of organisational size and HRM strategic involvement

Cathy Sheehan; Brian K. Cooper
Personnel Review , Volume 40 (6): 19 – Sep 20, 2011
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References (78)

Publisher
Emerald Publishing
Copyright
Copyright © 2011 Emerald Group Publishing Limited. All rights reserved.
ISSN
0048-3486
DOI
10.1108/00483481111169661
Publisher site
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Abstract

Purpose – The aims of this paper are, first, to consider the impact of organisational size and the strategic involvement of the human resource management (HRM) function on the decision to outsource, second, to consider the impact of HRM outsourcing on organisational performance for organisations of different size and where the HRM function has access to positions of elevated political power. Design/methodology/approach – The research examines responses from 441 Australian senior HRM managers who participated in an online survey of a national HRM professional association. The hypotheses were tested using multiple regression. Findings – Although results did not confirm the expected relationship between smaller organisational size and increased outsourcing, there was a positive relationship between HRM strategic involvement and the decision to outsource. The relationship between HRM outsourcing and perceived financial performance was positive for smaller firms and negative for larger firms. The positive relationship between strategic HR involvement and organisational effectiveness was also enhanced when HRM activities were kept in‐house rather than when they were outsourced. Research limitations/implications – Overall, the research findings confirm advantages for smaller firms that seek out external HRM assistance. The results of the study also indicate that there are organisational benefits when an elevated strategic HRM role in an organisation is combined with the decision to develop in‐house HRM activities rather than externalise these responsibilities. Originality/value – Using political influence theory, the research applies an alternative theoretical perspective to the analysis of HRM outsourcing.

Journal

Personnel Review – Emerald Publishing

Published: Sep 20, 2011

Keywords: Human resource management; Outsourcing; Organization types; Australia

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