Employment Relations Record, 2011, vol.11, no.1.
Since Huselid (1995) stimulated the HR debate, empirical research on HRM has been conducted for more than a decade. However, little is known about how HRM is shaped in organisations (Boselie, 2009; Paauwe, 2009). HRM scholars attribute the lack of understanding about HRM decision making to the lack of theory development in the field (Keegan & Boselie, 2006). Among the contemporary theories in the field of HRM, the resource-based view of the firm has most widely been used to gain insight into the shaping of HRM in organisations. It considers external product market and competition in the shaping of HRM (Paauwe, 2004), but neglects the contextual and institutional factors (Oliver, 1997). Thus, it represents only one side of the coin (Boselie, 2009), and alternative theories are needed to develop HRM as a field of academic enquiry. New institutionalism which looks at the institutional mechanisms is a viable alternative theory to study the shaping of HRM in organisations in different settings (Paauwe, 2004).
The study of HRM in hospitality is essential to both HRM and hospitality research. HRM has gained importance in the hospitality industry in recent years (Alleyne, Greenidge, Corbin, Alleyne & Devonish, 2008). However, knowledge about HRM practices in hospitality is limited. As the recognition of the need to include the context of hospitality in theory development has increased, and as HR practices begin to increase in importance for hospitality firms, more literature has begun to appear on HRM in the hospitality industry. The extant research on HRM in hospitality treated all sectors in the industry as a generic unit, viewing them in a relatively homogeneous manner (Knox, 2002). As a result, HRM practices in the industry has been characterised as "adversarial and ad hoc" (Knox, 2002, p. 60). Given the differences that exist within the sectors of the hospitality industry (Knox, 2002), there is a need to explore HRM in relation to specific sectors of the industry in order to recognise the differences.
The aim of this study is to generate new empirical data on the shaping of HRM practices in resorts in the Maldives, thereby shedding light on a context which has attracted little research to date. The study adopts a multiple-case study approach to explore HRM practices and examine factors that shape managerial decisions on the adoption of HRM practices through the lens of institutional theory.
The research setting is tourist resorts in the Maldives. Resorts represent the largest sector in the hospitality industry in the Maldives. They are developed based on the one-island-one-resort concept with an inbuilt infrastructure for providing products and services for tourists. As resorts are isolated from the community, only tourists, managers and employees are found in resorts. Over the years, this unique resort concept has attracted a large number of international hotel chains.
This paper is organised as follows: first, the literature on new institutionalism and HRM is briefly reviewed. Second, the methodological approach used in the research is described. Third, the findings are presented. Finally, the findings are discussed in light of relevant literature. Theoretical and practical implications are also identified within the discussion, acknowledging the limitations and providing suggestions for future research in this area.
Institutional theorists argue that "organisations compete not just for resources and customers, but for political and institutional legitimacy, for social as well as economic fitness" (DiMaggio & Powell, 1983, p.150). This implies that organisations not only need to be effective and achieve financial success, but also have to be legitimate in order to survive in the long run (Greenwood & Hinings, 1996; Scott & Meyer, 1994). Various stakeholders determine whether they perceive organisations as legitimate. Organisations are embedded in the institutional environment in which they operate, thus, organisational practices (e.g. HRM practices) are often either a reflection of, or responses to the expectations of the institutional environment (Paauwe, 2004). Hence, to receive support and achieve legitimacy, organisations need to conform to these requirements (Scott & Meyer, 1994), even though conformance is not the best option (Jaffee, 2001).
The institutional pressure on organisations towards conformance forces them to become similar in structure and form with the competitors within the organisational field--i.e., "key suppliers, resource and product consumers, regulatory agencies, and other organizations that produce similar services or products." (DiMaggio & Powell, 1983, p. 148). Institutional theorists refer to this process as homogenisation (DiMaggio & Powell, 1983). The concept that best captures this homogenisation is isomorphism (Paauwe, 2004). Isomorphism is "a constraining process that forces one unit in a population to resemble other units that face the same institutional conditions" (DiMaggio & Powell, 1983, p. 149). There are two main types of isomorphism: completive and institutional. The latter is of interest in this study as it can explain the "institutional pressure on organisations" (Boon, Paauwe, Boselie & Den Hartog, 2009, p. 494). There are three different types of institutional isomorphism: coercive, normative, and mimetic isomorphism.
Coercive isomorphism could result from both formal and informal pressures exerted on organisations upon which they are dependent and by cultural expectations in the society within which they operate (DiMaggio & Powell, 1983). Organisations can receive these pressures as force, persuasion or invitation to join in collusion (Meyer & Rowan, 1977). They are mainly "embedded in regulatory processes, which can manifest themselves in different forms, and differ in their degree of enforcement" (Paauwe & Boselie, 2003, p. 63). Related to HRM, coercive isomorphism includes influence of social partners (trade unions and work councils), employment legislations and the government, including their policies and other influences (Paauwe & Boselie, 2003). Coercive isomorphism may be visible at international, national and industry levels. International level pressure may include different ILO conventions, national level regulatory pressure may include employment laws, and industry level regulatory pressure may include sector-wide collective bargaining agreements (Paauwe & Boselie, 2003). Organisations may have to bring changes to their HRM policies and practices in response to the coercive pressures (Tsai, 2010). .....
Full text of this article is available on employment relations record journal, 2011, volume.11, no 1.