ABSTRACT
This chapter reviews the evolution of the literature from human resource management (HRM) to strategic human resource management (SHRM). It focuses on high performance work systems (HPWS) literature and examines the importance of employee perceptions and participation during HPWS implementation. The chapter reviews social exchange theory and describes HPWS studies on trust, followed by studies that examine the effects of HR practices on employee outcomes. In applying social exchange theory to SHRM, HR practices adopted by managers are interpreted by employees as 'signals' of managers' intentions. By examining employees' perceptions and their actual experiences of HR practices, a conceptual framework and hypotheses are developed and linked to employee outcomes. The hard HRM model, also termed the 'instrumental approach', focuses on employees as resources. They are considered to be commodities of organizations under the control of management. Soft HRM, also known as the 'developmental humanist' approach, advocates that organizational performance can be achieved by winning employees' commitment instead of controlling employees.
