Monks, K.; Loughnane, M. and McMackin, J. 'Designing a HR System: Pitfalls, Possibilities and Performance', CISC Working Paper No. 6

There is a large and still burgeoning literature on what is now commonly known as the HRM-Performance debate (see, for example, Arthur, 1994; Becker and Gerhart, 1996; Patterson et al., 1997; Guest, 1997; Purcell, 1999). This debate has developed many strands and themes as researchers wrestle with the issues that emerge and the questions that are raised by the various studies that have now been conducted. The problems and difficulties - both methodological and conceptual - that are intertwined within this debate have been well documented (Purcell, 1999; Legge, 2001) and many unresolved issues still remain. At the same time, while much more is now known about HRM and performance issues, 'there appears to be a major "disconnect" between what the research literature says that firms should do and what firms actually do' (Becker and Gerhart, 1996:796). Becker and Gerhart argue that 'there needs to be better communication between the academic and management communities so that research findings can have a greater influence on actual policy'. They also suggest that 'more effort should be devoted to finding out what managers are thinking and why they make the decisions they do' (p.796).

One manager who is a key player in this debate is the HR manager who has a critical role in the design of the HR system and who may have to shoulder the blame if that system does not operate successfully . While the HR manager generally inherits the systems that are dealt with on a daily basis, occasionally he or she is provided with the opportunity to design a new one. This opportunity also creates the possibility for researchers to work with such a manager to track the initiative over a period of time and to consider the interventions to alter HRM practices that have been suggested as critical to establishing the linkages between HRM and outcomes (Guest, 1997). This paper reports on one such research approach. The researchers worked with the manager who had developed a HR system for a new power plant that was being commissioned. The research tracked the way in which the system was designed and implemented and the outcomes of the process.

This paper recounts the stages in the design and operation of the HR system over a two year period. The paper begins by first of all exploring some of the literature on the design of HR systems and places this in the context of the research that has been conducted into greenfield sites. The way in which the HR system was designed and operated is then described.

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