across the board. To do so would ignore the impact of industry diVerences in
productive technologies and customer attitudes on which models of HRM are
economically sustainable. The emphasis on cost within cost eVectiveness also helps
to indicate that ‘strategic tensions’ between employer and employee are inevitable in
any model of HRM, no matter how superWcially appealing it is (Evans 1986 ; Boxall
1999 ; Evans and Genadry 1999 ). Boxall and Purcell ( 2003 ) argue that coping with the
twin tensions of labor scarcity and labor motivation within the economic resources
of theWrm poses serious dilemmas for most, if not all,Wrms. Many smallWrms fail
because they cannot aVord the labor they need or they survive but remain fragile,
tenuous organizations with high labor turnover and ongoing recruitment problems
(Hendry et al. 1995 ; Hornsby and Kuratko 2003 ; Marchington et al. 2003 ; Rubery
1994 ; Storey 1985 ). Furthermore, assuming an adequate labor supply, questions of
employee motivation, once workers are hired, are so central to the problem of cost
eVectiveness that they have often been argued to be the primary problem itself.
Research in industrial relations, including the labor process literature (this Hand-
book, Ch. 8 ), typically grounds its understanding of management’s goals in an
analysis of the employment relationship as an open-ended, indeterminate contract.
In this view, the winning of workforce cooperation is seen as an ‘inherently fragile’
process and ‘continuing preoccupation’ for management (Keenoy 1992 : 93 ). Another
way of saying this is that management is concerned with a critical, ongoing problem
of employee motivation because the impact of HRM is inevitably mediated through
line-manager and employee responses and interactions (e.g. Bartel 2004 ; Coyle-
Shapiro and Kessler 2000 ; Guest and Peccei 2001 ; Purcell et al. 2003 ).
The picture is further complicated by the reality of change in the environments
ofWrms. Labor productivity or cost eVectiveness is aimed for in agivencontext. In
other words, given a particular market and a certain type of technology (among
other things), it is about making theWrm’s labor resources productive at competi-
tive cost. The thrust is naturally towardsstabilizingproduction regimes and the
work and employment systems that are central to them, enhancing predictability
and certainty in the management process (Osterman 1987 ; Rubery 1994 ). However,
some element ofXexibility must be embedded in theWrm’s approach to HRM if it is
to survive given the fact that industries, including their viable production systems
and costs structures, evolve. Theoretical reviews in labor economics and industrial
relations in the 1980 s (Osterman 1987 ; Streeck 1987 ) underlined the need to bring
capacity to change or ‘organizationalXexibility’ moreWrmly into our understand-
ing of employer goals and the same kind of concern has permeated the HRM
literature (e.g. Evans 1986 ; Wright and Snell 1998 ).
As with cost eVectiveness, theXexibility dimension inevitably implies the need to
manage strategic tensions, including trade-oVs with the interests of workers. Even
high-commitmentWrms will periodically need lay-oVs: employer commitment to
employees is always conditional (Hyman 1987 ). Boxall and Purcell ( 2003 ) distin-
guish between ‘short-run responsiveness’—in whichWrms build a capacity to make
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