27 percent used three of the four employment modes, and 2 percent used only two
employment modes. Like Lepak and Snell ( 2002 ), Gonzales and Tacorante ( 2004 )
also found consistent diVerences in the HRM practices used among each employee
group. Looking beyond the extent of their use, Lepak et al. ( 2003 ) found that a more
extensive reliance on core knowledge employees and/or short-term contract work-
ers was positively associated withWrm performance (ROA and market-to-book
value) while an increased reliance on non-core, job-based employees and external
alliance partners was associated with diminishedWrm performance.
Interestingly, while research indicates that companies do adopt a diVerentiated
approach to their employment portfolio and there are performance implications
for how the portfolio is structured, there are potentially additional implications
(both positive and negative) related to adopting a mixed approach to employment.
For example, while a diVerentiated approach may result in improved performance
by targeting high investments in critical skills sets, it is also possible that such an
approach may trigger equity concerns among diVerent groups, depending on the
spillover of the HR systems used across employee groups. Groups that receive lower
levels of investment, though possibly justiWed in terms of their potential strategic
contributions, may experience inequity and display less than desired attitudes and
behaviors as a result. At the same time, treating all employees equally might involve
over-investing in non-critical employees and under-investing in critical employees.
While such an approach may alleviate equity concerns among non-core employees,
it may not be cost eVective for theWrm and might actually result in expending
unnecessary costs without reaping the beneWts. These tensions may be magniWed
in situations where employees in diVerent employee groups (and exposed to
diVerent HR systems) perform tasks and activities that are highly interdependent
(Boxall 1998 ; Rubery et al. 2004 ).
To complicate matters further, researchers examining employment subsystems
in general, and the HR architecture in particular, have not focused on the three
emerging issues noted above—the globalization of employment, the importance
of strategy, and balancing both knowledge stocks andXows within and across
employment groups—for both the use and eVectiveness of implementing alterna-
tive employment options for their workforce. In the remainder of this chapter, we
extend the HR architecture to examine these issues.
11.3 Globalization and the HR
Architecture
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One of the most pervasive trends regarding employment subsystems is directly
related to the globalization of companies. In particular, oVshoring—sending work
216 david lepak and scott a. snell