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When do HR delivery channels provide the highest HR service value? : an integrated analysis using resource-based view, transaction cost economics and resource-dependence perspectives

Tolsma, E. (2014) When do HR delivery channels provide the highest HR service value? : an integrated analysis using resource-based view, transaction cost economics and resource-dependence perspectives.

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Abstract:Nowadays many companies explore ways to enhance the value of human resource services. An important reason for introducing new approaches to deliver HRM in organizations is to perform HR activities more efficient and effective. One way to enhance the value of HR services is to make use of different delivery channels. Although previous studies list and describe the various HR delivery channels, they remain silent on which concrete HR delivery channel can be best selected for particular HR activities in order to create high HR service value. Several attempts were made to develop a comprehensive model for the categorization of HR delivery channels (Bos-Nehles, 2010; Farndale et al., 2010; Keegan, Huemann, & Turner, 2012; Ulrich et al, 2008; Valverde et al., 2006). In this study we distinguish intra-organizational (line managers, HR business partners and SSCs) and inter-organizational channels (external HR agencies), because they have different levels of sharedness. The selected variables uniqueness and dependence have emerged from the resource-based view (Barney, 1991), Transaction Costs Economics (Williamson, 2003) and the resource dependency theory (Pfeffer & Salancik, 1978). In this research hypotheses are developed and tested that explain by which level of uniqueness and dependence, which HR activities can be best delivered by an external HR agency, SSC, HR business partner or line manager in order to achieve high HR service value. We build on the study of (Hofman & Meijerink, in press) by including uniqueness of HR activities (as a measure of differentiation in needs), in combination with user dependence on HR activities, as playing the leading role in determining which delivery channel can best deliver various HR activities. The research goal in this thesis is as follows: ‘Which delivery channels can best perform which HR activities, depending on the variables uniqueness and dependence, so that the perceived HR service value is maximized?’. In order to test the formulated hypotheses, a quantitative research is conducted at a company in the east of the Netherlands. The final sample existed of 50 HR activities which are distributed across the four delivery channels. To collect the data, a survey methodology was applied. After the data collection four regression analyses are carried out. These analyses tested the effect of the use of the four HR delivery channels on HR service value. The moderating variables uniqueness and dependence were included as well. The results show that the impact of using different HR delivery channels on HR service value is not significantly affected by whether the activity is unique or whether the organization is dependent of the activity. But what we did find is that line managers score lower on HR service value than other delivery channels. Besides that, the delivery channel SSC has a positive impact on HR service value irrespective of the degree of uniqueness and dependence. Also the independent variable dependence has an individually, positive effect on HR service value. In practice, it can be assumed that an organization does not necessarily need to use different delivery channels when activities vary in their uniqueness and dependence. For organizations this means that based on the uniqueness and dependence of an activity, the HR service value will not significantly change when delivered by line managers, HR business partners, SSCs or external HR agencies. The outcome that line managers have a significant negative effect on HR service value is an interesting finding for organizations. It can be detrimental for organizations, because throughout the years line managers got more responsibility in the field of HRM (Guest, 1987; Harris et al., 2002; Larsen & Brewster, 2003; Legge, 1995; Schuler, 1992). Organizations might deal with this in different ways. On the one hand organizations can invest in their line managers so that they are better able to perform their HR tasks. This can result in an increase of a line manager’s opportunity and ability which respectively indirectly and directly leads to higher performance (Bos-Nehles et al., 2013). On the other hand, the organization can choose to shift HR activities to other delivery channels. The finding that SSCs have a significant positive effect on HR service value is very useful for organizations. This signifies that organizations should consider to make more use of SSCs in the future. By bundling HR activities in SSCs, the value of HR services can increase. HR activities can be organized more efficient, more effective and less costly (Bergeron, 2003; Cooke, 2006; Davis, 2005; Farndale et al., 2009; Kamal, 2012; Maatman et al., 2010; Meijerink et al., 2013). In this research it is found that when an organization wants to make (more) use of the services of a SSC, the SSC can best perform HR activities whereof the organization is highly dependent. When these activities are performed by SSCs, the organization can benefit from a higher HR service value.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/64674
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