a results-based approach and performance appraisals are likely to emphasize a
short-term, results-oriented component (Snell 1992 ; Snell and Youndt 1995 ).
- 3 Ancillary Knowledge (Contract Work Arrangements)
Lepak and Snell ( 1999 ) suggested thatWrms are most likely to establish short-term
contractual arrangements for tasks that are of limited strategic value and uniqueness.
When the requisite knowledge is of limited strategic value, there is no strong incentive
to internalize employment. And because the knowledge is of limited uniqueness,
companies tend to adopt a more transactional rather than a relational employment
relationship. Similar to compulsory knowledge, managing ancillary knowledge tends
to focus on short-term productivity and eYciency for tasks of limited scope, purpose,
or duration (Lepak and Snell 2002 ). This is done by focusing on compliance with
preset rules, regulations, and/or procedures. For example, job descriptions are likely
to be standardized and training and performance management, if conducted, is
likely to be limited to ensuring that company policies, systems, and procedures are
carried out. In addition, compensation for these employees is likely to be based on an
hourly wage and the accomplishment of speciWc tasks or goals.
- 4 Idiosyncratic Knowledge (Alliances/Partnerships)
Employees with idiosyncratic knowledge possess unique know-how but their
know-how is of limited strategic value. Because their knowledge is not as central
to value creation and strategy, employees with this type of human capital may be
externalized. However, these external partners have specialized knowledge that is
not easy toWnd in the market. As a consequence, long-term partnerships are likely
to be fostered that preserve continuity over time, ensure trust among partners, and
engender reciprocity and collaboration (Lepak and Snell 2002 ). While there tends
not to be investment in the human capital itself, there is substantial investment in
the relationship with these individuals. Given the need for ongoing exchange,
alliance partners are more likely to be managed by a collaborative HR conWgura-
tion characterized by group incentives, cross-functional teams, and the like. Such
practices may ensure greater integration and stronger relationships with theWrm
and the partner employees.
Though still in its infancy, an architectural perspective of employment subsys-
tems has received some empirical support. For example, Lepak and Snell ( 2002 )
demonstrated that companies use diVerent HR systems to manage diVerent
employee groups, depending on their strategic value and uniqueness. Similarly, in
a study of 375 companies in Spain, Gonzales and Tacorante ( 2004 ) showed that over
70 percent of the companies in their sample relied on all four modes of employment,
employment subsystems and hr architecture 215