Critique of Human Resources Theory

Human resources are considered by many to be the most important asset of an organisation, yet very few employers are able to harness the full potential from their employees. Lado and Wilson (1994) define a human resource system as a set of distinct but interrelated activities, functions, and processes that are directed at attracting, developing, and maintaining a firm’s human resources. Traditionally, management of this system has gained more attention from service organisations than from manufacturing organisations. However, to enhance operational performance, effectively managing this system is equally important in both types of organisations. Needless to say, sophisticated technologies and innovative manufacturing practices alone can do very little to enhance operational performance unless the required human resource management (HRM) practices are in place to form a consistent sociotechnical system (Ahmad & Schroeder, 2003). This paper will examine some of the basic assumptions and theories of HRM from both a traditional and critical viewpoint and identify any gaps that may exist within some of these theories. It will examine the applicability of some of these common human resource (HR) theories in a New Zealand context, in addition to looking at their applicability across cultures and industries. Finally, it will outline any problems that exist within HRM, specifically focusing on underlying assumptions and empirical research, suggesting ways that this can be rectified.