Strategic HRM

Strategic HRM explicitly draws attention to the question of how HRM activities, practices, and policies add value to organisations [Reference Paauwe, Boon, Collings, Wood and Szamosi5]. A fundamental premise here is that there should be alignment (or fit) between HRM and the organisational strategy. The early work of Mintzberg and colleagues illustrated that there is no single right way to adopt an organisational strategy [Reference Mintzberg, Ahlstrand and Lampel12]. Instead, organisations use strategies in different ways. To illustrate, organisations may adopt a strategy as a plan – defining a clear course of action towards success for the organisation. Others may adopt a strategy as a ploy, striving mainly to outfox (potential) opponents on the market. The five Ps of strategy (i.e., plan, ploy, pattern, position, or perspective; [Reference Mintzberg, Ahlstrand and Lampel12]) were already highlighted years ago as challenging to distinguish a universal organisational strategy, let alone a universally valid strategic HRM approach. Nevertheless, there seem to be several generalisable, strategic objectives of HRM across organisational contexts. The Harvard HRM model distinguishes three strategic HRM goals: social legitimacy (i.e., the organisation’s impact on society), economic rationality (i.e., the organisation’s economic welfare), and individual well-being (e.g., commitment and motivation; [Reference Beer, Boselie and Brewster13]). The main objective of strategic HRM, in that sense, is to adopt HR practices that align employees’ efforts in support of achieving these multilevel goals (i.e., given the interorganisational differences in the prioritisation of these goals; [Reference Boselie4]). Chapter 7 also discusses, in the context of corporate governance, aligning stakeholder (in this case, employee) goals with organisational goals. Examples of strategic HR practices are workforce planning, learning and development routes, employee well-being programmes, and performance management initiatives.

Tensions between Strategic HRM and Sustainable Employability

To some extent, strategic HR practices aimed at organisational performance may naturally align with a focus on sustainable employability [Reference Pak, Kooij, De Lange, Meyers and van Veldhoven7]. As such, strategic HR practices aimed at keeping employees happy, healthy, and productive may benefit both the organisation and the individual by contributing to both individual-level and organisational-level capabilities [Reference Gürbüz, Bakker, Demerouti and Brouwers14]. Given societal development, such as digitisation, hybrid working, and the growing gig economy (and its impact on employment security), many organisations increasingly adopt a strategic approach to HRM in response to these developments as a means of ensuring a sustainable alignment between the employer’s and employee’s welfare by increasing individual-level and organisational-level capabilities. Examples of such strategic practices are HR practices aimed at development (e.g., career planning or training) or the utilisation of human capital (e.g., task enrichment; [Reference Kooij, Jansen, Dikkers and de Lange15]). By investing in these strategic HR practices, organisations stimulate employability through capability-enhancing drivers. In other cases, however, HR practices aimed at employability may deviate profoundly from strategic HR goals [Reference Ybema, van Vuuren and van Dam2], as their objective is to contribute to the sustainability of the individual’s career, which may exceed organisational boundaries. Examples of such practices include maintenance-oriented HR practices (e.g., flexible working times) or accommodative HR practices (e.g., early retirement or additional leave; [Reference Kooij, Jansen, Dikkers and de Lange15]).

From these discrepancies, tensions may arise between strategic HRM interests and sustainable employability. To illustrate this with an example, consider an organisation that actively invites employees to draw up a personal development plan, on the basis of which the organisation actively supports their development (e.g., with coaching). At the individual level, one may expect that an investment in exploring occupational drivers may positively influence an individual’s sustainable employability [Reference Ybema, van Vuuren and van Dam2]. On the organisational level, in turn, the enactment of this HR practice may enable the organisation to make better use of the talents of their employees, hence supporting the organisation’s strategic goal of, for instance, increasing shareholder value. In other cases, however, the employee’s development plan may constitute a development route towards a career outside of the organisation. As a result, HR practices aimed at sustainable employability have allowed employees to actively shape their career trajectory while resulting in increased turnover intentions. These turnover intentions may exert negative pressure on organisational productivity and flexibility. Framed more positively, however, these turnover intentions may signal to the organisation that there is a need to reorganise work to more clearly align with individual capabilities.

As this example illustrates, strategic HRM and HR practices aimed at sustainable employability may either operate mutually reinforcing or may cause tensions – or so-called paradoxes – within the economic and moral drivers in the HR domain [Reference Aust, Brandl and Keegan16, Reference Peters and Lam17]. To manage these paradoxes, it is argued that organisations should balance their attention to economic, moral, and societal values [Reference Paauwe18]. This brings us to the work of Amartya Sen [Reference Sen, Nussbaum and Sen19, Reference Sen20], the founder of the CA, which explicitly integrates both moral and economic considerations that translate to the HRM context [Reference Downs and Swailes21].

Capability-Enhancing Organisations

In essence, strategic HRM at the meso level (i.e., the organisational policy level) is oriented primarily towards optimising employees’ efforts at work to generate value for the organisation and its shareholders. This stems from a reductionist perspective [Reference Subramanian, Verd, Vero and Zimmermann22] that regards employees as mere ‘human capital’ from an economic viewpoint and largely fails to acknowledge moral consideration for human development. Similarly, in the field of industrial and organisational psychology, scholars advocate for justice and adopt a human-centred approach rather than merely focusing on strategic management goals [Reference Gloss, Carr, Reichmann, Abdul-Nasiru and Oestereich23]. We consider the CA as complementary to this focus on generating economic results [Reference Van der Klink, Bültmann, Burdorf, Schaufeli, Zijlstra and Abma3, Reference Sen20]; the objective should be to allow individual employees to flourish as fulfilled individuals while simultaneously aiming for economic results [Reference Zimmermann24].

Although some research provides a grim picture of the marginalised focus of HRM on employee-focused responsibilities, such as individual fulfilment or sustainable employability [Reference Van Buren, Greenwood and Sheelan25], the CA seems to hold promise for bridging macro-, meso-, and micro-level interests. The objective of this reconciliation is that the organisational environment and the individual’s capabilities strengthen the collective capabilities of the organisation (and the wider society), and vice versa [Reference Subramanian, Verd, Vero and Zimmermann22] – a win‒win of sorts. As such, there is a mutual dependency: organisational capabilities rely on the mobilisation of individual skills and capabilities [Reference Subramanian and Zimmermann26], and the conversion of individual capabilities relies on the work context [Reference Van der Klink, Bültmann, Burdorf, Schaufeli, Zijlstra and Abma3].

The mobilisation of individual capabilities in itself is deemed insufficient, however, to fully generate collective action at the organisational level. Hoffer-Gittel argues that effective coordination (i.e., relational coordination) is highly relevant for the conversion of individual capabilities to collective action [Reference Hoffer-Gittell, Kyriakidou and Özbilgin27]. In line with this, research has highlighted the value of capability-enhancing organisations, which are pluralist, participatory, developmental, fair, and responsible (see Box 8.1). In particular, pluralist and participatory features, which allow for the consideration of different stakeholders, help bridge the micro, meso, and macro levels from a strategic HRM lens. As such, adopting a capability-enhancing approach may allow organisations to bridge strategic logics of social legitimacy, economic rationality, and employee well-being within the context of sustainable employability [Reference Paauwe and Farndale28].

When these insights are translated to the individual level, the CA model of sustainable employability [Reference Van der Klink, Bültmann, Burdorf, Schaufeli, Zijlstra and Abma3) suggests that, within capability-enhancing organisations, individual and work input should not necessarily be viewed as determinants of sustainable employability. Rather, they are factors that result in potential (i.e., a capability set) for valuable functioning, provided that there are conversion factors present. HRM policies and practices are key examples of such conversion factors. To illustrate, organisations may adopt HRM practices such as job crafting opportunities, development conversations, or work‒life balance practices as such conversion practices, which may help translate input towards potential (i.e., capabilities) to achieve valuable functionings. This finding shows that at both the individual and collective levels, conversion factors are key contributors to translating both individual and collective capabilities to individual-level and organisational functionings.

Bridging Inclusive HRM and the Capability Approach to Sustainable Employability

Although HRM can be seen as a conversion factor within the capability model [Reference Van der Klink, Bültmann, Burdorf, Schaufeli, Zijlstra and Abma3], the mere presence of HRM policies and practices at the meso level is not sufficient to allow each employee to generate a capability set of tangible opportunities for sustainable employability. Subramanian et al. explain how inequity in HRM policies and practices may promote the generation of capabilities of specific groups of employees over others (e.g., vulnerable groups in the labour market) [Reference Subramanian, Verd, Vero and Zimmermann22]. Hence, it is argued that it is relevant to consider the value of the CA for sustainable employment from an inclusive HRM viewpoint.

Inclusive HRM

Inclusive HRM is defined as “a broad perspective of HRM, extending beyond the boundaries of the organisation and considering people who are not (yet) part of the organisation, as valuable resources whose interests need to be taken into account” [Reference Borghouts-van de Pas and Freese30, pp. 13–14]. Strategic HRM focuses primarily on the so-called core employee (i.e., those seen as ‘ideal workers’ according to ableist norms; [Reference Jammaers and Zanoni31]), whereas inclusive HRM strives to actively include the labour potential of employees in more vulnerable positions in the labour market [Reference Borghouts-van de Pas and Freese32]. Vulnerable groups in the labour market are individuals for whom obtaining and maintaining work is challenging, including people with a disability, long-term unemployed individuals, or refugees. What makes these groups ‘vulnerable’ is the fact that they are “at risk of being abused, exploited or wounded whether physically, psychologically, socially, or a combination of these, at work” [Reference Restubog, Deen, Decoste and He33, p. 3], hence obstructing these individuals’ potential for achieving sustainable employability [Reference Akkermans, le Blanc, Van der Heijden and De Vos1]. Additionally, people can be considered to have a vulnerable position in the labour market if they are currently in employment but are at risk of (potentially prolonged) unemployment (i.e., due to an illness). In that sense, it has been argued that every worker can – at some point in time – be in a vulnerable labour market position [Reference Van Heijster, van den Groenendaal, Bosman, Hartman, Freese and Borghouts34]. As such, inclusive HRM encompasses various goals, including promoting access to the labour market, ensuring decent work, and contributing to (sustainable) employability, all with the overarching objective of ensuring the sustainable labour market participation of all, including groups seen as ‘untapped potential’ [Reference Lengnick-Hall, Gaunt and Kulkarni35].

Importance of Inclusive HRM

There are various reasons for the shift towards attention to labour market participation in both research and practice [Reference Restubog, Schilpzand, Lyons, Midel Deen and He36]. First, demographic changes such as the ageing population increase the number of people of working age who face some form of disability or chronic illness, for which they require some form of adaptation in their workplace [Reference Nygaard, Thomsen, Rasmussen, Skadhauge and Gram37]. This requires organisations to be more flexible to accommodate the increasingly varying needs and characteristics of their employees. Additionally, owing to global labour shortages, organisations are required to widen their scope in regard to hiring people and making use of different types of talent – unlocking the untapped and underused potential of people who are currently sidelined [Reference Lengnick-Hall, Gaunt and Kulkarni35]. Nevertheless, employment gaps persist among vulnerable groups (e.g., demonstrated by the disability employment gap; [Reference Van Der Zwan and De Beer38]), indicating that organisations may be challenged in actively including these individuals. To address this, persisting un- and underemployment has become a topic on political agendas in several Sustainable Development Goals of the United Nations, stating that everyone should have access to decent and meaningful work, despite vulnerabilities such as disability [39].

Inclusive HRM aligns with the social legitimacy goals of strategic HRM by aligning HR practices with stakeholder expectations beyond sole financial performance [Reference Van Berkel, Ingold, McGurk, Boselie and Bredgaard40]. Social legitimacy refers to the extent to which organisations comply with existing norms and values, such as norms and values related to sustainability, justice, and inclusion [Reference Bhattacharyya41]. Borghouts and Freese argue that inclusive HRM activities may have an impact beyond organisational boundaries and focus on fostering sustainable employability through facilitating transitions in the labour market (e.g., work-to-work transitions, inactivity-to-work transitions, or assignment-to-assignment transitions) [Reference Borghouts-van de Pas and Freese32].

The Capability Approach as a Normative Framework for Inclusive HRM

Inclusive HRM involves strategies and activities that aim not only to contribute to organisational goals but also to maintain and provide opportunities for the sustainable employability of vulnerable employees or potentially vulnerable employees [Reference de Lange, Wielenga-Meijer, Duijker and Hanstede42]. Seen from a CA perspective, creating employment security at the societal level is highly relevant, as it may foster individual freedoms through enhanced opportunities through income, health, and participation [Reference Meerman, van Casteren, Brouwers, van Dam and van der Klink43]. In addition, it may reduce income-related stress and contribute to a sense of meaning in life [Reference Kuiper, Bakker and van der Klink44].

The CA provides a normative foundation for reflection on how inclusive HRM may create workplaces that allow vulnerable workers’ capabilities to be enabled and used. As Sen explains, the CA emphasises the relevance of individuals’ opportunities and choices rather than focusing merely on (employment) outcomes [Reference Sen, Nussbaum and Sen19]. By arguing for this, the CA presents a framework that helps understand that the focus of inclusive employment should not be to solely offer employment to vulnerable workers (i.e., work first approaches [Reference Frøyland, Andreassen and Innvær45]). Rather, the CA argues that organisations – and societies as a whole – have a responsibility to ensure that vulnerable groups are enabled to do work they value [Reference Bonvin, Farvaque, van Berkel and Valkenburg46] and that it is sustainable [Reference Egdell and McQuaid47]. Even though labour market participation can enable the enhancement of one’s opportunities and freedoms, this might not be the case if people are ‘forced’ into jobs that do not match their values and talents [Reference Egdell and McQuaid47]. Hence, once more, paradoxical tensions that may arise from both a strategic and an inclusive HRM viewpoint are highlighted. To address this paradoxical tension, it is argued that inclusive HRM requires twofold attention to access to work, following work-first approaches in social policy [Reference Jones, Scullion, Hynes and Martin48] but also decent work and sustainable employability approaches [Reference Borghouts-van de Pas and Freese32]. Inclusive HRM, which builds on the CA as a normative framework, can play a role in both foci by paving the way towards 1) access to work and 2) decent and sustainable employment conditions for vulnerable workers.

Inclusive HRM and Access to Work

Transitioning from inactivity to work is a vital step towards the inclusion of vulnerable workers, according to the transitional inclusive HRM labour market model [Reference Borghouts-van de Pas and Freese32]. Originally, research on the inclusion of vulnerable groups in the labour market focused on activating the so-called supply side of the labour market. Thus, both research and (social) policy focused mainly on how to motivate and support people who are (temporarily) unemployed to (re)enter the labour market (e.g., with the use of job application training). More recently, however, the importance of the active involvement of employers – as the demand side of the labour market – has been embraced [Reference Kersten, van Woerkom, Geuskens and Blonk49]. After all, employers are the gatekeepers for making work accessible and available for vulnerable groups [Reference Ingold and Stuart50]. In response to this shift in attention to the demand side, the concept of employer engagement has emerged, referring to “the active involvement of employers in addressing the societal challenge of promoting the labour-market participation of vulnerable groups” [Reference Van Berkel, Ingold, McGurk, Boselie and Bredgaard40, p. 1]. Beyond compliance with public policies (e.g., quota-driven engagement), employer engagement also occurs at the meso level of organisations through inclusive HRM practices (e.g., hiring).

Previous studies have highlighted the value of various inclusive HRM practices aimed at recruiting vulnerable workers. The use of job carving or job creation, for instance, as a means of stimulating employers to hire vulnerable workers. Kersten et al. highlighted how employer engagement may be stimulated if employers are willing and able to look beyond one’s vulnerability and rather focus on one’s talents and possibilities [Reference Kersten, van Woerkom, Geuskens and Blonk49]. One can be critical, however, about the extent to which simply providing resources (e.g., a job or internship) is sufficient for truly enhancing the capabilities of vulnerable workers to pursue the work they value. To illustrate, if a person with a disability is offered an employment contract at an organisation with limited personal, social, or environmental resources (as conversion factors), this person may be unable to thrive at work and lack the ability to achieve optimal functioning. Inclusive HRM aimed at vulnerable workers is therefore argued to require a focus beyond solely access to work (i.e., recruitment orientation). Instead, inclusive HRM should encompass HRM practices and policies aimed at providing resources and conversion factors in various stages of the employee’s journey within and beyond the organisation – moving from job security towards employment security [Reference Kersten, van Woerkom, Geuskens and Blonk51]. In line with the logic of the CA, only when these conditions are met can organisations genuinely foster the capabilities of vulnerable workers, enabling them to achieve sustainable employability [Reference Van der Klink, Bültmann, Burdorf, Schaufeli, Zijlstra and Abma3].

Inclusive HRM, Decent Work, and Sustainable Employability

As illustrated earlier, the focus on inclusive HRM for vulnerable workers should exceed a focus on solely recruitment. Instead, HRM should strive to create what is referred to as decent work with and for vulnerable groups [Reference Egdell and Graham52]. The requirements of decent work comprise – among others – physical and psychological safety, decent pay, and alignment between an organisation’s and worker’s values. As explained by the psychology of working theory [Reference Duffy, Blustein, Diemer and Autin53], decent work allows for a manifestation of human capabilities by ensuring that working conditions can operate in a capability-enhancing manner. As such, decent work ensures that the conditions necessary for individuals to exercise their capabilities are fulfilled, thereby aligning closely with the logic of the CA [Reference Van der Klink, Bültmann, Burdorf, Schaufeli, Zijlstra and Abma3]. Inclusive HRM plays a fundamental role in achieving decent working conditions that, particularly for vulnerable workers, can shape capability-enhancing contexts.

Research provides various illustrations of how organisations can adopt inclusive workplace practices to enhance the sustainable employment of vulnerable workers, in line with the logic of the CA. Van Casteren and colleagues highlighted how (HR practices aimed at) facilitative leadership and practices aimed at creating co-worker support could operate as contextual conversion factors that enable gifted workers in their capabilities [Reference Van Casteren, Meerman, Brouwers, van Dam and van der Klink54]. Furthermore, enabling vulnerable groups to have genuine choices about their work (tasks), their learning, and other work-related activities could provide relevant conversion factors that allow vulnerable groups to overcome barriers to sustainable employment [Reference Robertson55]. Similarly, a study on the inclusion of refugees in work argued that cross-cultural training could function as a conversion factor for refugees to present their work-related knowledge in their workplace and interact with colleagues in a culturally accepted way [Reference Su Lee and Wechtler56].

To these specific examples, Kersten et al. add that generalised HRM practices (e.g., accommodative or maintenance-oriented HR practices; [Reference Kooij, Jansen, Dikkers and de Lange15]) may be insufficient for achieving sustainable inclusion of (some) vulnerable groups [Reference Kersten, van Woerkom, Geuskens and Blonk49]. To illustrate, some vulnerable groups require frequent and tailored practices that consider fluctuating needs and abilities (e.g., people with a chronic progressive disease or with mental health issues), which require tailored solutions for inclusive HRM practices to act truly capability-enhancing. Access to sufficient resources is, for example, more important for people with a disability, as they must address the increased demands of their condition [Reference Koolhaas, Brouwer, Groothoff, Sorgdrager and Van der Klink57]. Additionally, one’s values regarding work may change due to an illness or work disability, leading to the need to revise the alignment between organisational values and those of the worker. For example, for people with a work-relevant disability (i.e., chronic disease, illness, or disability that impacts one’s functioning at work), value-driven employment may have become more important [Reference Kuiper, Bakker and van der Klink44]. In short, experiencing a (temporary) work disability may alter feelings of decent work in current employment as well as the resources required for attaining capability-enhancing decent work in future employment [Reference Raque, Wright and Duffy58]. In this sense, inclusive HRM does not present a one-size-fits-all framework for decent work; rather, it requires tailor-making on the basis of individual resources and necessary conversion factors for enabling capabilities.