often indirectly acknowledged. For instance, conventional wisdom suggests that,
while most companiesreportusing merit pay and having merit pay policies, in
actuality few have valid practices and processes that pay their employees based on
merit (Heneman 1990 ). This represents a misWt between the policy and the practice
level, which could result in a negative synergistic eVect. A policy that stresses
compensation based on merit is likely to be ineVective or even counterproductive
without proper practices and processes that implement that policy. Processes more
directly aVect employees, their behaviors, and attitudes than do policies. When
policies and processes are not aligned, dysfunctional behaviors may arise due to
perceptions of injustice, which are likely to harm organizational eVectiveness
(Simons and Roberson 2003 ).
What has been often called internal horizontalWt, we divide into intra-HRM and
inter-HRM activity areaWt.Inter-HRM activity areaWtdenotes theWtbetween
diVerent HRM activity areas. By and large, HRM researchers have focused on
inter-practice areaWt (e.g. Arthur 1992 ; Delery and Doty 1996 ; Ichniowski et al.
1997 ; MacDuYe 1995 ; Shaw et al. 2002 ). This type of internalWt was also the focus of
Delery’s ( 1998 ) review and the level of abstraction where Becker et al. ( 1997 )Wrst
theorized about ‘powerful connections’ and ‘deadly combinations.’Intra-HRM
activity areaWt, on the other hand, is the alignment between speciWc HRM activities
withina certain set of HRM activities (e.g. HRM practices within the compensation
practice area). Not only do distinct HRM activity areas need to be aligned but also
the elements within each HRM activity area. For example, speciWc HRM activities
within the compensation activity area (e.g. pay level, pay dispersion, pay basis, and
pay structure) need toWt in order to achieve synergistic eVects. When discussing
the empirical evidence later in this chapter, we address both of these types ofWtin
more detail.
Finally, there is also internalWt between diVerent HRM systems within the HRM
architecture (internalbetween-HRM systemWt). While the previous types of in-
ternalWt are within a particular HRM system (e.g. the system used to manage a
particular employee group), the various HRM activities within one system may
also have toWt their counterparts in other HRM systems within the HRM archi-
tecture (Kepes and Delery in press). Following Lepak and Snell’s ( 1999 ) discussion
of the diVerent types of HRM systems used to manage diVerent types of employees
within theWrm, it is essential to discuss the degree to which these diVerent HRM
systems within an organization actuallyWt together to support the overall HRM
strategy. This type ofWt has been neglected in the SHRM literature. Theoretically, it
has been indirectly addressed with concepts such as ‘buVering of the strategic core’
(e.g. PfeVer and Baron 1988 ) and the ‘XexibleWrm’ (e.g. Atkinson 1984 ). Empirical
examinations, however, are rare (but see e.g. Hakim 1990 ), especially from an
internalWt perspective.
Within this particular type ofWt, ‘strategic tensions’ between diVering HRM
systems could arise due to, for example, diVerent workforce needs or goals for labor
hrm systems and the problem of internal fit 391