The Influence of Employees as Active
Consumers of Human Resource
Management
A case study exploring HRM consumption behavior and the generation of HRM
value for employees
R.J. Mol
Master thesis
University of Twente, Enschede, the Netherlands
Faculty of Behavioural Management and Social Sciences
Master Business Administration (Human Resource Management)
30 August 2016
2
3
Title
The Influence of Employees as Active Consumers of Human Resource Management:
A case study exploring HRM consumption behavior and the generation of HRM value for employees
Master thesis
30 August 2016
Author
R.J. Mol
r.j.mol@student.utwente.nl
(S0207217)
University of Twente, Enschede, the Netherlands
Faculty of Behavioural Management and Social Sciences
Master Business Administration (Human Resource Management)
Keywords
Human Resource Management, employees, service-dominant logic, value-in-use, self-determination
theory, HRM practices, HRM consumption, intellectual capital, experienced costs
Graduation Committee
First Supervisor
Dr. J.G. Meijerink
Behavioural Management and Social Sciences
Business Administration, HRM
Second Supervisor
Dr. A.C. Bos-Nehles
Behavioural Management and Social Sciences
Business Administration, HRM
TUI Nederland
External supervisor
Drs. W.B.M. Rouhof
HRM TUI Nederland (Enschede)
Supervisor HRM
4
Preface
Dear reader,
This master thesis forms both a literal and metaphorical ending of my time as a student at the
University of Twente. From this point on it is time to discover new ways in the future, which I am
really looking forward to. After graduating with a bachelor in psychology I wanted to lay my focus
more on individuals in an organizational context. Therefore I started my master in Business
Administration with the focus on human resource management. This resulted in the fact that I
wanted to write my master thesis in the field of HRM as well.
When arrived at the point that I wanted to explore whether my theoretical assumptions could also
be observed in practice, I was provided the opportunity to collect my data at TUI Nederland. For a
period of three months I was able to gather my data at the Enschede office of TUI. A special thanks
goes to Wim Rouhof and Maartje Reekers for the support, enthusiasm, knowledge and insights they
provided. Also HR colleagues Michelle Vennegoor and Rianne Poorthuis were really helpful for me to
get to know the organization in a short period of time. Various employees at TUI participated in my
data collection for which I am grateful. The understanding in how they make use of the various
offered HRM services at TUI provided me useful and interesting insights for this thesis.
A very warm and special recognition goes to Jeroen Meijerink. After participating in an inspirational
master course that was lectured by Jeroen I started to cooperate with him for my master thesis.
During this project he acted as a true sparring partner to help me in the process of writing this thesis.
With enthusiastic guidance, support and ideas he helped me to go in the right direction. From the
standpoint that I wanted to lay my focus on the employee who makes use of HRM services, Jeroen
provided clear theoretical and practical tools to build a thesis around this subject. Also at times that
some focus and renewed direction was needed, Jeroen helped me with patience to regain my focus.
The idea that small steps can make big difference became really applicable in my process, for which I
am grateful that Jeroen helped when needed. I would also like to thank Anna Bos-Nehles for her
constructive ideas and interest in my thesis. The tips she provided really helped me in finalizing this
report.
Hopefully this thesis will provide the reader new insights in how employees engage in HRM
consumption behavior and the value of HRM it generates. Concluding I would like to wish you a
pleasant time reading my master thesis.
Kind regards,
R.J. Mol
5
Table of contents
Preface …………………………………………………………………………………………………………………………………. 4
Table of contents …………………………………………………………………………………………………………………… 5
List of abbreviations ………………………………………………………………………………………………………………. 6
Introduction ………………………………………………………………………………………………………………………….. 7
1. Theoretical framework ……………………………………………………………………………………………………….. 9
1.1 Conceptualizing value of HRM for employees …………………………………………………………………… 9
1.2 Benefits
………………………………………………………………………………………………………………………. 10
1.2.1. Intellectual capital theory as an overarching framework for the various benefits
…………. 10
1.2.2. Human Capital ……………………………………………………………………………………………………… 11
1.2.3. Social Capital ……………………………………………………………………………………………………….. 11
1.2.4. Organizational Capital …………………………………………………………………………………………… 12
1.3. Costs …………………………………………………………………………………………………………………………. 14
1.4 Service dominant logic: Why consumers create value
………………………………………………………. 15
1.5 The consumption of employees as a determinant of value of HRM for employees………………. 17
1.5.1 HRM Service and defining resources
………………………………………………………………………… 17
1.5.2. The consumption of a HRM service
…………………………………………………………………………. 18
1.6. The three innate needs as drivers for HRM consumption ………………………………………………… 19
1.6.1. Goals that derive from the needs in HRM consumption…………………………………………….. 20
1.6.2. Three forms of HRM consumption ………………………………………………………………………….. 21
1.7 The effect of HRM consumption on the value of HRM for employees ………………………………… 22
2. Method
……………………………………………………………………………………………………………………………. 25
2.1 Research design and context
…………………………………………………………………………………………. 25
2.1.1. Organizational context ………………………………………………………………………………………….. 25
2.2 Data collection
…………………………………………………………………………………………………………….. 26
2.2.1 Quantitative data collection to measure constructs of intellectual capital and costs
……… 27
2.2.2 Qualitative data collection to explore HRM consumption
…………………………………………… 30
2.2.2.1 Human Resource Management at TUI Nederland – Enschede ……………………………………… 30
2.2.2.2. HRM consumption behavior …………………………………………………………………………………… 32
3. Empirical findings and Discussion ………………………………………………………………………………………. 34
3.1 Quantitative data – levels of intellectual capital and costs ………………………………………………… 34
3.2 Exploring HRM consumption behavior
……………………………………………………………………………. 35
3.2.1. Compliance driven HRM consumption behavior ………………………………………………………. 35
6
3.2.2 Competence driven HRM consumption behavior ………………………………………………………. 35
3.2.3 Relatedness driven HRM consumption behavior ……………………………………………………….. 38
3.2.4. Autonomy driven HRM consumption behavior ………………………………………………………… 40
3.3 Exploring proposition 2 ………………………………………………………………………………………………… 43
3.3.1. Proposition 2A ……………………………………………………………………………………………………… 43
3.3.2. Proposition 2B ……………………………………………………………………………………………………… 45
3.3.3. Proposition 2C ……………………………………………………………………………………………………… 47
4. Conclusions and limitations ………………………………………………………………………………………………. 49
4.1 Limitations and future research opportunities ………………………………………………………………… 49
4.2 Conclusion and practical implications …………………………………………………………………………….. 51
References…………………………………………………………………………………………………………………………… 54
Appendix …………………………………………………………………………………………………………………………….. 63
Appendix I – Organization chart of the TUI Benelux Enschede office ……………………………………….. 63
Appendix II – Operationalization table: Intellectual Capital. ……………………………………………………. 64
Appendix III – Questions to measure intellectual capital ………………………………………………………… 65
Appendix IV – Questions to measure the dependent variable: The experienced costs ……………….. 66
Appendix V – Data collection Part 1 – Questionnaire (English) ………………………………………………… 67
Appendix VI – Classification of the interviewed employees based on Z-scores ………………………….. 73
Appendix VI – Operationalization table for designing interviewing questions……………………………. 75
Appendix VII – Questions for interviews in English (1) and Dutch (2) ……………………………………….. 77
Appendix VIII – List of Codes and descriptions ………………………………………………………………………. 78
Appendix IX – Competence driven HRM consumption
……………………………………………………………. 81
Appendix X – Relatedness driven HRM consumption
……………………………………………………………… 84
Appendix XI -Autonomy driven HRM consumption ……………………………………………………………….. 87
Appendix XII – Complete overview of assigned codes
…………………………………………………………….. 90
List of abbreviations
HRM
Human Resource Management
Comp
Competence
POS
Perceived Organizational Support
Rel
Relatedness
KSA’s
Knowledge, Skills and Abilities
Auto
Autonomy
S-D logic
Service-Dominant logic
TUI
Touristik Union International
COR
Conservation of Resource theory
BtB
Business to Business
IC
Intellectual Capital
BtC
Business to customer
HC
Human Capital
ICT
Information- and
SC
Social Capital
Communication technology
OC
Organizational Capital
QM
Quality Monitoring
7
Introduction
In recent years there is an increasing amount of research focusing on the impact human resource
management (HRM) can have on the value for employees (e.g. Chang, 2005; Wright & Nishii, 2006;
Uen, Ahlstrom, Chen, & Tseng, 2012; Meijerink, Bondarouk, & Lepak, 2016). This value can be
regarded as how the individual employee experience the outcomes of HRM. For example learning
new skills during a training can be perceived by the employee to be valuable, because it could enable
him or her to work more efficiently. There is a wide set of such positive outcomes that can be
affected by HRM. These are for example the perceived organizational support (Chiang & Wu, 2014)
and the improvement of the knowledge, skills and abilities of employees (e.g. Bowen & Ostroff, 2004;
Aguinis & Kraiger, 2009; Huselid, 1995). Furthermore HRM can improve the employability of
employees (Van der Heijde & Van der Heijden, 2006) and feelings of autonomy (Langfred, 2000). It is
important to understand why HRM has influence on this value, because eventually this leads to
higher levels of affective commitment (Gilbert, DeWinne, & Sels, 2011; Tsui, Pearce, Porter, & Tripoli,
1997). Also higher levels of job satisfaction have been measured, as well as employee performance
(Hallowell, Schlesinger, & Zornitsky, 1996; Chiang & Wu, 2014). As it is clear, HRM can cause
employees to experience value in their employment relationship, which can be advantageous for
both employees and employers. As a result therefore, it is important to understand what causes
employees to experience HRM value.
Marketing theory has provided insights that employees themselves could impact this value. Namely,
the service logic perspective, which originates from marketing research, states that consumers are
the ones who create value (Vargo & Lusch, 2004). Moreover, as part of the service logic, the value-in-
use principle states that by making use of a service, the consumers are the primary source creating
the value of the service (Vargo & Lusch, 2004; Grönroos, 2011; Lusch & Vargo, 2006; Priem, 2007).
Employees can be viewed as the consumers of HRM, because they consume HR practices by for
example engaging in training opportunities or participating in performance appraisal and staffing
meetings. Several scholars performed research on the active involvement of employees while they
consume HRM (Lepak & Boswell, 2012; Janssens & Steyaert, 2009; Meijerink et al., 2016). For
example, Lepak and Boswell (2012) state that employees actively think, (re)act and make choices that
help fulfill their own interests and needs, and therefore their participation in HRM services should be
acknowledged. The active involvement of employees, as consumers of HRM, is researched by
Meijerink and colleagues (2016), who found that when the employees’ competences (i.e. knowledge,
skills and abilities) increase, the value of HRM for these employees rises as well. This gives a good
indication that the active role of organizational employees is important in explaining why the value of
HRM for employees differs among employees.
The work of Meijerink and colleagues (2016) however is merely focusing on the cognitive component
of how the value of HRM could be explained. Therefore it is known whether the active involvement
of employees is useful in explaining the value of HRM for employees, but only when it comes to
cognitive aspects of this value. What is lacking is insight in how the behavioral aspects of employees
can influence this value. Because employees are the active consumers of HRM services it is important
to explore employees’ consumption behaviors. Or in other words, how employees make use of the
provided HRM services. An understanding on how the usage takes place is needed, since depending
on the way in which HRM services are consumed, HRM services might provide different kinds of
8
value to employees (Vargo & Lusch, 2004). For example, when an employee attends a training in
order to learn new things but fails to apply this knowledge while doing his or her job, the potential
value of a training has likely failed. Since the usage determines the value, the actual consumption
behavior of HRM practices by employees is likely to determine the benefits of a potential value as
well. With an insight in the consumption of employees an explanation can be made of how the value
of HRM for employees is established. Moreover, because employees are likely to behave in their own
unique ways while they use HRM practices, the resulting value is likely to be different as well.
Therefore the goal of this research is to explore the HRM consumption behavior of employees and
the potential value this might generate. In doing so, this study contributes by gaining insights in how
different forms of usage of similar HRM services by employees leads to different forms of value. This
results in the statement of the research question of this study:
How does HRM consumption behavior by employees takes place and how does it generate
its potential value of HRM?
The remainder of this study is organized as follows. First a conceptualization of the value of HRM for
employees will be provided. This value of HRM for employees is regarded as a trade-off between
both benefits and costs employees can experience. By drawing insight from intellectual capital
theory, the various benefits will be clustered. Intellectual capital theory is useful because it can be
subdivided into three overarching concepts of benefits, which are human capital, social capital and
organizational capital (e.g. Leitner, 2011; Nahapiet & Ghoshal, 1998; Youndt, Subramaniam, & Snell,
2004; Subramaniam & Youndt, 2005; Kang & Snell, 2009). As a result the individual benefits that
contribute to the experienced value of HRM for employees can be represented by these three
benefits of intellectual capital theory. The costs are considered as nonmonetary, since employees do
not have to pay literally for the HRM services they make use of. Then by drawing insight from the
Service-Dominant logic (Vargo & Lusch, 2004), an explanation will be provided on why employees can
be regarded as the creators of value. The following section discusses how the consumption behavior
of HRM services manifests itself in such a way that HRM value can be established. This will be done
by drawing insight from self-determination theory. This is an useful theory because it states that
every person has three innate psychological needs that he or she pursues in their behavior (e.g. Deci
& Ryan, 1985, 2000, 2002; Ryan & Deci, 2000). As a result also during HRM consumption behavior it
is likely that these three needs, which are competence, relatedness and autonomy, are pursued. This
will be concluded with the formulation of propositions. After this, in order to examine how
employees actually consume HRM services on the work floor, a case study will be conducted at an
office of TUI Nederland, located in Enschede, the Netherlands. First in order to measure the
experienced value of HRM for employees, employees who work at TUI Nederland will fill in an online
questionnaire. After that, based on their scores 16 of TUI’s employees will be invited for an interview
in order to explore their HRM consumption behaviors. In the empirical findings and discussion
section the observed HRM consumption behaviors will be described as well as whether and how this
HRM consumption also does influences the value of HRM employees experience. New propositions
for future research will be stated before concluding this thesis.
9
1. Theoretical framework
1.1 Conceptualizing value of HRM for employees
In order to find an explanation for the proposed research goal, first an elaboration will be given how
the value of HRM for employees is defined. Several conceptualizations of value can be used to
explain what the value of HRM might be.
First in strategic management, Bowman and Ambrosini (2000) state that consumers of a good or a
service perceive its value based on their beliefs of the good/service, their own needs, unique (prior)
experiences, wants, wishes and expectations. In this valuation a distinction is made between use
value and exchange value. Use value is explained as ‘‘specific qualities of the product perceived by
customers in relation to their needs’’ (Bowman & Ambrosini, 2000, p. 2). For instance when one buys
a new car, transportation comfort and potential status could be regarded as the consumer’s use
value. Because this use value differs for every consumer, judgments are very subjective and
therefore one can also speak of the perceived use value. Exchange value can be defined as the
“amount paid by the user to the seller for the use value of the focal … service” (Lepak, Smith, &
Taylor, 2007, p. 182). In other words, the exchange value concerns the costs a consumer has to make
for the perceived use value (Priem, 2007; Zeithaml, 1988). The term costs in this perspective is a
rather broad definition, because costs can be viewed in both monetary as well as in nonmonetary
ways. Monetary costs can be regarded as costs employees have to literally pay such as paying for
food and beverages in the company’s canteen. Nonmonetary costs on the contrary, refer to the costs
employees experience when they have to make sacrifices in terms of time and energy while they
make use of the company’s facilities. This will be further elaborated upon in the costs section.
Second in marketing research the overall value of a product or service is defined as the assessment of
consumers based on their perceptions of what is given and what is received (Zeithaml, 1988). These
perceptions on what is given can vary for every consumer. For example for one individual it matters
how much money he or she has spent to obtain a service, while another could face issues like time
and effort. This variance also applies on the perception on what is received. For example one needs
convenience, while another consumer requires volume and a third party may be looking for quality
(Zeithaml, 1988). Dodds and colleagues (1991) state that the perceived value of consumers can be
described as a cognitive trade-off. In this trade-off a deliberation is made between the perceived
quality and the sacrifices one has to make in order to obtain a product or a service. In this light it is
found that the perceived quality of a service can have a strong influence on its value for employees
(Cronin, Brady, & Hult, 2000). On the other hand the mentioned sacrifices could for example consist
of time, effort and energy one has to invest in order to obtain or consume a service or a good (Dodds,
Monroe, & Grewal, 1991).
When the comparison is made with HRM, employees who consume a HRM service are also likely to
have certain expectations and needs of the HRM service. For instance employees can perceive a
certain use value or quality of HRM services in terms of a helpful HR department or a fast service
delivery in case HR related questions are asked. Also when employees have the perception that by
attending a training their knowledge can be improved, their perceived needs are likely to be satisfied
when they actually learn new things via the training. In this way consuming a HRM service (the
training) can lead to benefits (new acquired knowledge), which ‘is received’ to the consumer.
However, when employees consume a HRM service it is likely that they have to make certain
exchange value or sacrifices as well. Using the training example, an employee has to put effort in
10
order to attend the training. For instance one has to make a long drive to a specific training location
or he/she misses a regular working day at their office that has to be complemented on a later
moment. In other words, while consuming a HRM service several benefits may be ‘received’ in return
for some exchanges that have to be ‘given’.
As it is made clear in the aforementioned elaboration, when consuming a service one can experience
both its benefits (i.e. use value, ‘what is received’ and perceived quality) and the costs he or she has
to make (i.e. exchange value, ‘what is given’, sacrifices and the cost of consumption). Besides, it is
clear that the balance between these two constructs forms the common denominator. This balance
can be seen as a trade-off between the benefits and costs which forms the value. This approach is
also used in consumer-marketing theory, in which value is described as a trade-off between the
benefits and the sacrifices one experiences when consuming a service (Sánchez-Fernández & Iniesta-
Bonilla, 2007; Grönroos, 2011). Therefore in this paper the working definition of the value of HRM for
employees is explained as a trade-off between both benefits and costs of HRM for employees. Both
the benefits and costs that employees perceive will be discussed in the next sections.
1.2 Benefits
1.2.1. Intellectual capital theory as an overarching framework for the various benefits
There is a variety of studies that have examined the benefits of HRM practices for employees. For
example these benefits are knowledge, skills and abilities as well as perceived organizational support.
Because of the abundance of benefits the provision of a clarifying structure is needed that offers an
overarching framework which orders the various benefits of HRM into more meaningful clusters.
In order to create these clusters of benefits, intellectual capital theory can be used. This intellectual
capital theory can be useful because it can be subdivided into three overarching concepts and as a
result the earlier described individual benefits can be represented by these three dimensions. The
three dimensions of intellectual capital are 1) human capital, 2) social capital and 3) organizational
capital ad can be regarded as a representation of knowledge that benefits the employee (e.g. Leitner,
2011; Nahapiet & Ghoshal, 1998; Youndt, Subramaniam, & Snell, 2004; Subramaniam & Youndt,
2005; Kang & Snell, 2009). In the current literature it is mainly considered that intellectual capital
manifests itself only on the organizational level (e.g. Youndt et al., 2004; Leitner, 2011). For example,
research examined the impact of intellectual capital on the organizational competitive advantage
(Stewart, 1997; Nahapiet & Ghoshal, 1998) or a firm’s innovative capabilities (Subramaniam &
Youndt, 2005; Leitner, 2011) Therefore the general perspective of several authors considers
intellectual capital as the accumulation and utilization of knowledge, that is embedded in the three
dimensions and is only in favor of organizational benefits (Youndt et al., 2005; Subramaniam &
Youndt, 2005; Nahapiet & Ghoshal, 1998). However, because in this study the focus lays on the
individual employee and the benefits he or she personally perceives while consuming HRM practices,
this study deviates from the traditional organization level approach. Therefore the three overarching
aspects of intellectual capital have to be considered as constructs that reside on the individual level,
rather than on the organizational level. As a result the three dimensions will be described as
overarching concepts that represent the individual benefits employees can perceive while they
consume HRM practices. The accommodation of these benefits into the three dimensions will be
further elaborated upon in the following section.
11
1.2.2. Human Capital
First human capital can be viewed as the knowledge, skills and capabilities individual employees can
gain and utilize in such a way that it is beneficial for them (Schultz, 1961; Leitner, 2011; Subramaniam
& Youndt, 2005). Knowledge can be defined as the (acquired) knowledge an employee has in order
to perform at his or her job. Two aspects of knowledge, declarative and procedural knowledge have
been found to be beneficial for employees when trained (e.g. Taylor, Russ-Eft, & Chan, 2005; Aguinis
& Kraiger, 2009; Kraiger, Ford, & Salas, 1993). Besides, an employee can learn to enhance his or her
strategic knowledge (Kozlowski, et al., 2001), which can be described as knowing when to apply a
specific knowledge or skill (Aguinis & Kraiger, 2009). Improvement of these aspects of knowledge can
be advantageous for an employee via for instance training and development practices. As a result of
this an employee can perform better and makes it more likely to become an expert in his or her job.
Furthermore HRM practices can contribute to employees by the improvement of skills. Skills can be
defined as the employee’s expertise that enables him or her in order to perform at a job. These skills
can both be improved by the acquisition of new skills (Hill & Lent, 2006) and existing skills (Davis & Yi,
2004; Barber, 2004), such as communication, negotiation and presenting techniques. Employees can
also learn to enhance their skills concerning self-efficacy and self-management (Frayne & Geringer,
2000). Lastly, the employees’ ability can be influenced by HRM practices. Ability can be defined as
the capacity of an employee to perform at his or her job. Employees can for instance be trained in
their adaptive expertise, which improves their ability to cope with for example new or unexpected
situations on the work floor (Ford & Schmidt, 2000). In sum, as is described above can the several
factors of knowledge, skills and abilities be improved by HRM in such a way that it is beneficial for
the individual employee. Resulting that in this paper human capital is regarded as the knowledge,
skills and abilities of the employee.
1.2.3. Social Capital
Social capital can be explained as the benefits individuals perceive due to the interactions and type of
interrelationships they have with each other (e.g. Nahapiet & Ghoshal, 1998; Subramaniam &
Youndt, 2005). Furthermore social capital is also based on the sharing of ideas and the norms for
collaboration employees experience (Putnam, 1995). As a result social interactions can manifest
themselves in such a way that (social) knowledge is exchanged and therefore that beneficial
outcomes for individual employees are likely to occur. A benefit of HRM practices that can cause
social capital for employees is perceived organizational support (POS). POS can be defined as the
organizational valuation employees perceive from their employer. POS draws further upon the
reciprocity perspective (Gouldner, 1960) and can be described as the degree to which employees
have the perception that the organization values their contribution, cares about well-being and is
trying to meet socio-emotional needs (Eisenberger, Huntington, Hutchison, & Sowa, 1986). There are
several ways to positively affect the POS of employees, in which HRM can play an important role. For
example approval, respect, payments, promotion, granting access to information, job enrichment
and influence over organizational policies are all possibilities to positively affect an employee’s
perception of the support they receive from their organization (Rhoades & Eisenberger, 2002). These
examples can be implemented in several HRM practices, such as performance appraisals and job
design processes. Also the employees’ identification with their company can be improved in such a
way that strong ties between and among employees and the companies they work for are
established (Kim, Lee, Lee, & Kim, 2010). The interactions employees have with each other can form
a social network that is based on several ties. The intensity of a tie is based on variables such as time,
12
intimacy, emotional commitment and reciprocity (Granovetter, 1973). HRM can affect these ties in
order to make them stronger, with the result that social networks within organizations are
established. For example by recruitment practices HRM can search for potential employees that fit
with the organization and the colleagues the applicant has to work with. Moreover by staffing
practices employees can be brought together in order to enhance social interactions. This can also be
improved by training opportunities and teambuilding activities. It is also found that strong ties are
enhanced when internal recruitment and selection takes place (Rynes, 1991). This reinforces existing
social networks, interactions among employees and is advantageous because employees are already
familiar with the organization they work for (Rynes, 1991). HRM practices such as performance
appraisal can improve social collaboration, teamwork and for example trust. The amount of trust an
employee has in his or her management also be regarded as a benefit that resides in social capital.
Trust in management can be defined as the willingness of employees to be vulnerable to their
management (Davis, Schoorman, Mayer, & Tan, 2000; Mayer & Gavin, 2005). Because in most
situations employees do not have the power to control or monitor their management, they need to
trust that management looks after them. This trust can regarded as a concept that manifests itself on
the social level, because in order to create trust a social interaction is needed. In this case the
interaction between an employee and his or her employer or manager. When the trust in
management improves, employees are more likely to be able to pay attention and focus on their job
instead of for example worrying about their futures at the company (Mayer & Gavin, 2005).
Employees’ feelings that they are looked after can result in the improvement of trust in
management. This can be effectuated by for example constructive social interactions between
employees and their management during performance appraisal and job design practices. As a result
social capital in this paper can be regarded as knowledge exchange due to interactions and
relationships of the employee.
1.2.4. Organizational Capital
Organizational capital can be regarded as the benefits employees perceive because the
organizational systems, processes, routines and policies are embedded in such a way that they could
be in favor of the employee (Kang & Snell, 2009). For example can HRM affect the employees’
employability, which beneficial outcomes contribute to the employees’ organizational capital.
Employability can be defined as an employee’s ability to stay employed within a company. It is
beneficial because when it improves, it can be advantageous for individual career outcomes (Van der
Heijde & Van der Heijden, 2006). Both present performances on the job as job security on the long
run are both likely to improve when an employee becomes more employable (Van der Heijde & Van
der Heijden, 2006). This implicates that when an employee’s employability increases, he or she can
become more confident about their position in the firm for the preset time and in the future.
Drawing insights from strategic HRM (Capelli & Crocker-Hefter, 1996; Wright & Snell, 1998),
individual adaptive and social competences are increasingly seen as important because
improvements in these competences can lead to an improved employability. The employee’s
employability is, next to adaptive and social competences, also based on personal elements such as
attitudes, motivation, personality and ability (Van der Heijde & Van der Heijden, 2006; Van Dam,
2004). HRM can affect an employee’s employability for example by development programs such as
training opportunities and career mobility practices. Next to that, practices that focus on job
assessments and staffing can cause an employee to develop its employability (Van der Heijde & Van
der Heijden, 2006). When an employee works for a company he or she can make use of several
13
facilities such as the employee’s cafeteria, the gym, health insurance opportunities, information
databases and for example to opportunity to lease a car via the firm. It is likely that when an
employee’s employability increases the opportunities to make use of the organization’s facilities in
the future are maintained as well. Furthermore authors examined the positive individual outcomes
when autonomy and recognition is granted to employees (Langfred, 2000; Brunn & Dugas, 2008).
Autonomy can be defined as the amount of room and freedom employees experience on order to
perform at their job. Autonomy resides on the level of organizational capital because several systems
and routines in an organization can be designed in such a way that employees have a certain amount
of autonomy. For example when it is a company’s policy that employees can decide on their own
when to take a break or when to arrive at and depart from their work, they can experience
autonomy. Furthermore by job design and staffing practices employees can be given specific
autonomous aspects of their job. Recognition can be regarded as the amount of credit employees
experience for the work they are doing. For example Brunn and Dugas (2008) examined the
individual need for recognition employees have. Recognition can be regarded as a benefit that
resides in organizational capital, because it can be a part of the organization’s routines or policies.
For example organizations can announce the so called ‘employee of the month’ for employees who
performed well in a particular way. This employee is then recognized within the whole company.
Furthermore recognition can be granted to employees via compensation and benefits practices, from
(non)financial rewarding (Luthans, 2000; Wright, 2003) to public (‘employees of the month’) instead
of individual praise (Bradler, Dur, Neckermann, & Non, 2013). Furthermore it is argued that individual
benefits such as influence can be experienced due to organizational structures and routines (Bakker
& Schaufeli, 2008). Influence can be described as the amount of power and control employees have
to perform their job in their own way. For example it can be an organization’s policy that employees
have to design or seek their own work. A salesman for example is likely to have influence on which
customers he approaches, as long as he meets his targets. Or a team is granted the influence to
decide on their own how they work on a project. As a result various benefits can be experienced
because of the organization’s structures and policies. Therefore can organizational capital be
described as codified knowledge that is stored within the organization, that can be used by the
employee (Youndt et al., 2004).
In sum, from all the possible benefits for employees that can be caused by HRM, in this paper the
benefits will be structured into the three clusters of benefits which are human capital, social capital
and organizational capital. In Table 1 a visual display is provided that summarizes how the possible
benefits of HRM for employees can be clustered into three categories – as human, social and
organizational capital.
14
Table 1: Individual benefits of HRM incorporated by intellectual capital
1.3. Costs
When it comes to costs employees experience in consuming HRM services, it should not be regarded
as monetary costs they make, because employees work for an organization they do not have literally
pay cash for the HRM services they make use of. However, employees do make costs in other forms.
These costs can be seen as the non-monetary sacrifices they make in terms of time, effort and energy
that are required to obtain or consume a HRM practice (Meijerink et al., 2016; Dodds, et al., 1991;
Cronin et al, 2000). In obtaining and utilizing HRM practices, for instance training and performance
appraisals, the employees as users or consumers, could experience these non-monetary costs. For
example, an employee has to put time and effort in attending a training. Next to the fact that an
employee has to put time and effort in attending the training, it is also possible that he or she has to
travel somewhere else for the training. When this training is takes place abroad or has a duration of
several days it is also possible that the employee has to stay overnight. Moreover, during the time an
employee attends a training it is likely that he or she misses regular work that needs to be done later
on. These examples of possible costs could outweigh the perceived benefits such as the development
of his or her human capital by learning new things. Moreover, costs such as time consuming and
inefficiency could even lead to dissatisfaction with HRM services (Cooke, 2006; Meijerink &
Intellectual Capital
Human
Capital
Definition
Social Capital
Definition
Organizational
Capital
Definition
Knowledge
The (acquired)
knowledge an
employee has in
order to perform
at a job
Perceived
organizational
support (POS)
The
organizational
valuation
employees
perceive from
their employer
Employability
The ability of an
employee to
stay employed
within the
company
Skills
The employee’s
(acquired)
expertise that
enables the
performance at a
job
Strong ties
Favorable
relations
between and
among the
employee’s
coworkers and
the company
Autonomy
The amount of
room and
freedom
employees
experience in
order to
perform at a job
Abilities
The (acquired)
capacity of an
employee to
perform at a job
Trust in
management
The willingness
of employees to
be vulnerable to
their
management
Recognition
The amount of
credit
employees
experience for
the work they
are doing
Influence
The amount of
power and
control
employees have
to perform at
their job in their
own way
15
Bondarouk, 2013). It is also found that high-performance work practices (HPWPs) intensifies job
demands, which in turn also increases costs such as stress (Kroon, Van de Voorde, & Van Veldhoven,
2009). Because employees could experience a continuous feeling of high demands by HRM, the risk
increases that emotional exhaustion emerges (Bakker, Demerouti, & Verbeke, 2004; Karasek &
Theorell, 1990). This means that when employees experience too much HRM, the amount of job
demands increases with the result that emotional exhaustion leads to an increased level of stress.
Experiencing too much HRM could for example be a result of the fact that HRM practices increases
the commitment to an employer. This increased commitment can cause employees to work too
much for the company which leads to emotional exhaustions or stress. Next to stress that could have
negative results such as a possible burnout, it is even stated that the well-being of employees, in
terms of happiness, health and relationship, could deteriorate because of HRM (Van de Voorde,
Paauwe, & Van Veldhoven, 2012; Peccei, 2004). These aforementioned examples could be regarded
as costs employees experience while they make use of the provided HRM services. To cover these
costs therefore in this paper the costs employees experience are expressed as non-monetary costs,
which refer to the time, effort, energy and stress that employees experience.
1.4 Service dominant logic: Why consumers create value
With the aforementioned elaboration on how the value of HRM for employees is regarded and
composed, it is important to know how this value can be created. In order to research the creation of
value the service logic perspective will be used, because it views the consumers of a service as very
important participants in the process of creating value. First used in consumer-marketing theory, the
service dominant logic (S-D logic) is a new perspective which states that the users of a service are the
creators of value (Vargo & Lusch, 2004, 2006; Grönroos, 2011; Lusch & Vargo, 2006). In the S-D logic
value is understood as ‘value-in-use’ (e.g. Vargo & Lusch, 2004; Lusch & Vargo, 2006; Vargo, Maglio,
& Akaka, 2008). This S-D logic states that it is only the consumer who is responsible for the actual
creation of value, and therefore the role of the consumer of a service is regarded as very important.
The term ‘service’ in this logic is considered as an incorporation of both goods and services and is
conceptualized as the ‘’application of specialized competences (knowledge and skills), through deeds,
processes, and performances for the benefit of another entity or the entity itself’’ (Lusch & Vargo,
2006, p. 283). The suggestion is made that ‘’value creation is only possible when a good or service is
consumed. An unsold good has no value, and a service provider without customers cannot produce
anything’’ (Gumneson, 1998, p. 247). A provider of a service therefore can do no more than create a
proposition of a value for potential consumers, by providing a service that has the potential to meet
the needs or expectations of a consumer (Vargo & Lusch, 2004). As a result of this a service can
provide certain benefits to different consumers in different ways, but its value is only realized
through the usage of the consumer. Therefore the role of consumers of a service has to be seen as
very active, because value depends heavily on how consumers make use of a service. In order to
further explain the construct of value-in-use, the example of a car can be given. When a car
manufacturer produces a car, the company applies its competences to transform several parts such
as metal, plastics and rubber into a car. In the S-D logic, the car is considered only an input into the
value creation that occurs when the consumer uses the car (Vargo et al., 2008). This usage can be
seen in different ways, such as for transportation, self-identity exposure and for example to sell again
for profit. Besides, consumers integrate the usage of a car in combination with other resources. For
instance someone needs to know how to drive and shift the gear, has to have access to fuel or
electricity, or know how to drive towards a destination. For example by making use of a navigation
16
system. Therefore without the integration of these resources by the consumer, the car has limited to
no value. In other words, consumers of a service are required to ‘’learn to use, maintain, repair, and
adapt the appliance to his or her unique needs, usage situation, and behaviors’’ (Vargo & Lusch, 2004,
p. 11) As a result only the individual usage of a service determines its value which is called value-in-
use. This value-in-use perspective states that by making use of a service, the consumers are the
primary source creating the value of the service (Vargo & Lusch, 2004; Grönroos, 2011; Lusch &
Vargo, 2006; Priem, 2007). Therefore the consumer can be considered as the creator of value-in-use.
In other words, the consumer’s usage determines the value of a service.
Now that it is clear that the role of a consumer can be considered as the creator of value, through its
use, the connection with human resource management can be made. Providing HRM practices can
be considered as being a service. The application and exchange of specialized competences that are
involved by a HR professional forms the service. These specialized competences could for instance be
HRM competences, HRM capabilities and intellectual capital (e.g. Boselie & Paauwe, 2005; Meijerink
et al., 2016; Maatman, Bondarouk, & Looise, 2010; Meijerink & Bondarouk, 2013). Moreover these
competences are applied within HR activities with the aim to benefit both parties involved. In this
case both the HR professional as the provider and the employee as the consumer of the HR service.
These benefits include for example the improvement of the employee’s well-being, employability
and the firm’s performance (Van de Voorde et al., 2012). With this insight employees can be
regarded as the consumers of the offered HR services. Because employees make use of the provided
HR services, such as HRM practices, they can be regarded as the consumers of these HR services. This
can be explained by several examples. HR professionals, as providers of the HR service, can organize
training opportunities for its employees. This HR practice, the training, is not value laden because it
only has the potential to become of value for employees. The way the training is used however,
determines the value. Employees could for example have certain needs to improve their skills or
increase their knowledge, or to meet other participants of the training in order to increase their
network. In order to fulfill these needs, employees will make use of the training in their own unique
way. As a result the value of the training will be different for every employee, because they make use
of it differently. Another example why employees can be regarded as the consumers of HRM are
compensation and benefits practices. A company can design certain practices that focus on
rewarding its employees for the work they do. For example employees can be compensated based
on hourly or merit-based pay. They can obtain benefits such as the opportunity to a lease car or a
refund for their telephone charges. Furthermore they can be rewarded by individual or group
bonuses. However, the value of these forms of compensation and benefits depends on how the
employees make use of these practices. When an employee does not need a car for his or her job, or
when a company works only with group based bonuses which do not apply on employees who work
only on an individual level, these HRM services have no value for the employee. Therefore the way
the employee makes use of a service, in order to fulfill his or her needs, determines the actual value-
in-use. As a result of the aforementioned elaboration the employees can be regarded as the
consumers of HRM and by that they are the creators of the value of HRM. This is because through its
usage, needs and expectations are satisfied, the value-in-use can be met.
Now that it is clear that employees as the consumers of HRM are the creators of the value of HRM,
an explanation is needed in how employees create this value of HRM. As it is made clear that
employees determine the value of HRM on their own via the consumption of HRM practices, the
17
consumption of HRM practices by employees has to be examined. This consumption of employees
needs to be researched because every employee is likely to consume the offered HRM practices in
his or her own unique way. Because this usage is likely to differ, the logical result is that the value of
HRM for each employee differs as well. Therefore will different ways of consumption also affect
different kinds of value. This makes it clear that in order to explain how value is generated, it is
needed that the way how employees make use of HRM services is researched. Therefore the
consumption of HRM practices by employees has to be researched, which will be further elaborated
upon in the next section.
1.5 The consumption of employees as a determinant of value of HRM for employees
In the previous sections it is made clear that consumption is important and that the way how
employees make use of HRM services determines the value of HRM. However, what the current
marketing literature still lacks is a clear conceptualization or a typology of the different kinds of
consumption that can be observed when employees consume HRM practices. Although it is known
that consumption is important, it remains unclear how this consumption of HRM can be
conceptualized. Therefore a definition of the consumption of a HRM service is needed. In doing so,
first the concept of a HRM service will be explained where after the consumption of this HRM service
will be elaborated upon.
1.5.1 HRM Service and defining resources
As explained in the Service-Dominant logic, a service that can be consumed can be conceptualized as
the ‘’application of specialized competences (knowledge and skills), through deeds, processes, and
performances for the benefit of another entity or the entity itself’’ (Lusch & Vargo, 2006, p. 283).
Moreover, a service is also regarded as the process of integrating one’s own resources in order to
benefit another (Vargo & Lusch, 2004, 2008). In other words, a service can be regarded as a bundle of
resources that is provided by the service’s provider. Which can be beneficial for the user of the
provided bundle of resources. As an example the supply of a car can be explained, by which the
provider of this car offers the bundle of several resources. For example a car can bring you to your
next location and can the vehicle help a person by achieving a certain desired status. In a HRM
context when a training is organized by a HRM professional, he or she provides a bundle of several
resources. For example, the location of the training needs to be well facilitated, the study material
has to be well prepared, and the instructor of the training needs to have gained enough experience
and knowledge. This is because in order to be able to successfully train the participants, a proper
preparation is needed. This provided bundle of resources does not only apply to training
opportunities, but it can be applied on all the HRM practices organizations offer. As a result HR
professionals offer several bundles of resources for either performance appraisal, staffing and
compensation and benefits practices. Therefore can a service be considered as a bundle of resources
which is integrated and provided by a provider.
Now that the concept of a HRM service is explained it is needed to further zoom in and define what
these bundles of resources are, and more particular: what resources are. In the conservation of
resource (COR) theory resources were first described as objects, states, conditions and other things
that people value (Hobfoll, 1988; 1989). However, during the following years criticism grew with the
common criticism that almost everything good could be considered as a resource (e.g. Gorgievski,
Halbesleben, & Bakker, 2011; Thompson & Cooper, 2001; Halbesleben, Neveu, Paustian-Underdahl,
& Westman, 2014). This criticism is based on two factors. First ‘value’ is a term that implies that a
18
resource must lead to a positive outcome to be a resource (Halbesleben et al., 2014). This is not logic
when looking at a resource and its outcome, since research showed that good things can lead to bad
outcomes. As an example the amount of work related resources can be provided. When someone
has high levels of work related resources associated with engagement, this can lead to for example
work-family conflicts (Halbesleben, Harvey, & Bolino, 2009). As a second aspect of the criticism, does
the original definition emphasizes categories of resources such as objects, states and conditions.
Identifying and categorizing resources however, is different from defining them (Halbesleben et al.,
2014). As a result, therefore resources can be described as anything that is perceived by the
employee to help attain his or her goals (Halbesleben et al., 2014). In this light goals can be defined
as the object or aim for an action, for example, to attain a specific standard of proficiency. Usually
goals are set to be achieved within a specified time limit (Locke & Latham, 2002, p. 705). As a result
the term ‘anything’ can be translated into means that are deployed in order to attain an individual’s
goals. For example when someone wants to drive from point A to point B by car (the goal), he or she
needs several means or resources to successfully attain this goal. First the car itself is needed, but
also know-how how to use the car, fuel in the tank, enough time to travel and the availability of a
navigation system are possible means the help the individual to attain the goal to go from point A to
point B. In addition to the provided definition of resources, it is stated that there are several ways to
achieve a goal (Halbesleben et al., 2014). Therefore goals can be attained via the use of multiple
means, or resources. As an example, it has been shown that more than one resource can be bundled
in order to achieve a common goal (Shah & Kruglanski, 2000; Kruglanski, 1996). Also has the
suggestion been made that resources may be substituted for one another to achieve the same goal
(Huang & Zhang, 2013; Kruglanski, Pierro, & Sheveland, 2011). As a result several different resources
can be used, in order to attain a goal. This perspective perfectly aligns with the idea of value-in-use,
that because every HRM service can be used in several ways, different sorts of value are likely to
arise as well (Vargo & Lusch, 2004). As such different (bundles of) resources can be used in order to
attain a goal. How this usage takes place to attain a goal will be further elaborated upon in the next
section.
1.5.2. The consumption of a HRM service
As it is made clear earlier, in order to create value a service has to be consumed (e.g. Vargo & Lusch,
2004; Vargo et al., 2008; Grönroos, 2011). Still using the example of the car as a bundle of resources,
the usage of this car determines its value. In order to successfully make use of this car, other
resources need therefore to be integrated. For instance gasoline is required in order to make the
engine work, you need to know how the navigation system works or you need friends to expose your
desired status to. In other words, consumers of a bundle of resources (the car) integrate other
resources with this bundle, in order to create value (Vargo & Lusch, 2004). This also can be applied in
the field of HRM when employees make use of for example a training. While consuming a training,
employees do also need to apply several resources of their own. For example, one has to spend time,
energy and effort into the training as well as previous training experiences that can be implemented.
Moreover, specific learning goals of the employee which could be set by the employee’s (line)
manager can also be applied while consuming a training. And as it is clear, employees do have to
integrate the various resources while consuming each of the possible HRM practices they make use
of.
19
As is also concluded, everyone behaves in his or her own unique way and as such displays different
kinds of consumptions. The motivation to behave in different ways comes from the idea that
everybody sets different goals in order to satisfy their different needs. For example a person can own
a car to show off with or just to get from point A to point B. As a result one can state that in a general
perspective, consumption manifests itself on the integration of bundles of resources in order to
satisfy specific needs of the consumer. This can also be applied to how employees consume HRM
practices. As it is made clear employees consume by integrating bundles of resources in order to
create value. When they participate in a training, their needs to do so can vary. From the need to
improve a social network, to the aim to improve his or her KSA’s. In this way the needs of each
training participant deviates and as a result the consumption in order to satisfy these needs will
differ as well. In other words, the consumption of a service can be defined as the integration of
bundles of resources by consumers in order to fulfill their needs. And because it is demonstrated that
the usage determines value, the result of integration resource bundles in order to fulfill needs is that
value is established (Vargo & Lusch, 2004). Now that the consumption of HRM is defined and made
clear, a further understanding is needed in how this consumption is established and what factors can
be considered as drivers for this particular consumption.
1.6. The three innate needs as drivers for HRM consumption
In order to research how consumption manifests itself via the satisfaction of needs, self-
determination theory can be used. This theory is useful because it provides a useful tool to
conceptualize the different kinds of drivers for consumption by stating that every person has innate
psychological needs. And that these needs form a basis of self-motivation, individual growth, well-
being, performance and personality integration (e.g. Deci & Ryan, 1985, 2000, 2002; Ryan & Deci,
2000). Self-determination theory incorporates the assumption that people are very motivated to
achieve psychological growth and development and are willing to take on responsibilities (Deci &
Ryan, 2000; Marescaux et al., 2010; Van den Broek, Vansteenkiste, De Witte, Lens, & Andriessen,
2009). This intrinsic motivation can be captured in three needs, that cannot be learned but are innate
and differs for every person. These needs are 1) competence, 2) relatedness and 3) autonomy, which
allow optimal function and growth once they are satisfied (e.g. Deci & Ryan, 2000, 2002).
First the need for competence can be described as feelings people have to be effective and skillful in
their actions. Also the need to believe that a person can have influence on important outcomes can
be translated to the need for competence (Stone, Deci, & Ryan, 2009; Vansteenkiste, Neyrinck,
Niemiec, Soenens, De Witte & Van den Broek, 2007). Second, the fundamental need for relatedness
can be described as a ‘’sense of mutual respect, caring and reliance with others’’ (Deci et al., 2001, p.
931), and thus it concerns the desire to feel connected to others. It is stated that every person has
the need to love and care, as well as the need to be loved and cared for (e.g. Baumeister & Leary,
1995; Bowlby, 1958; Deci & Ryan, 2000). There are two aspects of the need for relatedness. First it
requires an individual to interact frequently and affectively with other people. Second it also requires
persons to believe these people care about his or her welfare as well (Baumeister & Leary, 1995). As
a result the need for relatedness in this paper is defined as the individual’s sense to have mutual
respect, caring and reliance with others and thus the desire to feel connected to others (Deci et al.,
2001; Baumeister & Leary, 1995; Deci & Ryan, 2000). Third, because every person experiences that
he or she wants to make choices, wants to feel like the initiator of his or her own actions and act
based on their own interest and integrated values, all these needs can be incorporated as the need
20
for autonomy (Deci & Ryan, 2000, 2002; Deci, Ryan, Gagné, Leone & Kornazheva, 2001). It is
important to remark that the need for autonomy is often compared with psychological factors such
as individualism, ideas of internal locus of control and independence (see i.e. Ryan, 1995). Autonomy
in the perspective of this study however, should be regarded as the experience of integration and
freedom employees perceive while doing their job (Deci & Ryan, 2000). Satisfaction for this need can
be met by being able to make choices of personal interest or by for example backing up externally
induced requests (Deci & Ryan, 2000; Marescaux et al., 2010). As a result the need for autonomy can
be defined as the individuals feeling’s to make choices of personal interest and thus to experience
integration and freedom while doing his or her job (Deci & Ryan, 2000; Marescaux et al., 2010).
1.6.1. Goals that derive from the needs in HRM consumption
In order to make an operationalization how the three needs that are described by Deci and Ryan
(2002) can transform into actual goals that employees can achieve in order to create value, insights
can be drawn from expectancy theory (Vroom, 1964; Van Eerde & Thierry, 1996; Oliver, 1974). This
theory involves the behavioral aspects every individual is subjected to and explains why an individual
chooses one behavioral option over another. First mentioned in 1964, Vroom studied organizational
behavior of individual employees. He stated that every individual pursues goals when he or she
considers these goals to be achievable. And as stated earlier, goals in this paper are described as the
object or aim for an action (Locke & Latham, 2002, p. 705). As such when an individual expects that a
certain behavior, that is focusing on achieving a goal, leads to a desired result he or she is more
motivated to conduct this behavior (Vroom, 1964). Moreover, when goals are founded to be
important the expectancy that these goals can be achieved may increase as well. Especially when an
individual thinks that when a certain behavior satisfies an important need, he or she is more likely to
put effort this need by making a goal out of it (Lawler & Suttle, 1973; Van Eerde & Thierry, 1996;
Vroom, 1964). In this light when an individual has the need for either competence, relatedness or
autonomy, these needs can evolve into goals that can be set. Because when one thinks that when
achieving this goal results into value they are likely to put more effort in it and he or she will behave
in such a way that goals are met so that this value can be established (Van Eerde & Thierry, 1996). In
other words when goals derive from certain needs, individuals are more likely to conduct goal
achieving behavior, because they expect that value can be established (Vroom, 1964). And as
described earlier are resources, that are considered as means that help an individual to help attain
his or her goals, very likely to be integrated in such a way that these goals are attained.
Because employees are assumed to pursue their three innate needs, it is likely that they set the goal
to achieve either competence, relatedness and autonomy while they consume HRM services as well.
As is made clear by Deci and Ryan (2002), the pursuit of the three needs can be regarded as a
dynamic process in which the goals that derive from the needs can be universally applied. In pursuing
these needs, some goals are more important for one individual than for another. However in a
general perspective these needs do not have to be excluded from each other when pursued (Deci &
Ryan, 2002). As a result one employee can pursue both autonomy, relatedness and autonomy at the
same time. Because this process depends on each individual’s context, time, culture and/or (prior)
experience, one can for example pursue more autonomous needs than the need for relatedness and
competences when compared to his or her co-worker (Deci & Ryan, 2002; Deci, 1980; Ryan, Sheldon,
Kasser, & Deci, 1996). Therefore when an employee pursues the need for competences while
21
consuming a HRM service, he or she is likely to integrate just the bundles of resources that have a
positive outcome when the goal is set for the improvement of competences. For example while in a
training this employee can combine the offered resources of the HRM service provider, such as
training facilities and study materials, with his or her own resources such as learning goals and
previous experiences. In this way the bundles of resources are integrated in such a way that the
comptences of this employee can actually be pursued.This also applies when an employee pursues
the need for relatedness while participating in a teamwork activity. Then the employee integrates
the offered resources of the HRM service provider with his or hers own resources such a
communication skills that toghether enable the employee to fulfill the need for relatedness.
1.6.2. Three forms of HRM consumption
Despite the fact that an employee can pursue both competences, relatedness and autonomy at the
same time at different levels while consuming HRM services (Deci & Ryan, 2002), HRM consumption
can be divided into three free-standing kinds of consumption. These three distinct sorts of HRM
consumption can be regarded as free-standing because of two reasons. First the resources that are
integrated while making use of a HRM service can be different, because the needs that are pursued
and with that the goals that are set, can differ. As a result when an employee pursues competences
he or she is likely to integrate other resources than when other needs are pursued. When the
example of the car is used again, an individual can drive a car because he or she wants to learn to
become a better driver (driven by the need to become more competent). Therefore he is likely to
integrate resources such as the car itself, past experience and learning goals regarding driving skills in
order to become a more skillful driver. This differs from the resources that are integrated when the
individual pursues his autonomy, because then resources such as the desire to drive whenever its
suits him and the availability of enough fuel in the tank have to be integrated in order to actually
meet the need for autonomy. This also applies in an organizational setting when employees consume
a HRM service. Then for the same service, different kinds of resources can be integrated, depending
on the needs that are pursued. For example the ability to share knowledge and communication skills
that can be integrated in order to pursue relatedness, can differ from other resources. This could for
example be the desire for new challenges and learning goals that are integrated when competences
are pursued by the employee. The second reason why three distinct ways of HRM consumption can
be defined is the way how resources are applied. This is because the same resources can be bundled
by the employee, but in a different way. This can be explained with the car example, when an
individual wants to show off with his car he needs several resources. Next to the car itself he needs
driving skills, a full tank of fuel and friends to successfully show to that he is proud of his car. Next
when you want to show off by showing how fast your car can drive the resources of a clear road and
the absence of traffic police have to be added to successfully drive very fast. This differs when you
just want to go from point A to point B with no rush, because then you can show off while you don’t
have the need for a clear road and you don’t have to worry about getting pulled over by the police.
As a result the same resources can be integrated for the pursuit of a specific need, but it depends on
how you want to pursue this need. When compared with the integration of resources while
consuming a HRM service this can also occur when the same resources are used for different kinds of
needs. In this way the desired outcome, the employee’s value, can be established in different ways
because the way how the resources are applied differ as well.
22
This way of thinking aligns very well with two the earlier described perspectives. First, with the
explanation of how resources are considered, it is made clear that resources can be regarded as the
means that are used to attain a goal. Therefore because goals can differ, resources can differ as well.
Moreover, because resources can complement and substitute each other, a goal can be attained in a
very unique way, due to the unique resources that are used (Halbesleben et al., 2014; Shah &
Kruglanski, 2000; Kruglanski et al., 2011). The second argument why the consumption of HRM
services can be regarded as three-folded and therefore aligns very well within this study, comes from
the perspective of value-in-use that states that value heavily depends on how a service is used
(Vargo & Lusch, 2004). And because HRM consumption can be used differently, due to the
integration of different resources and the different ways how these resources are applied, also
different forms of value can be established. Therefore three different ways of HRM consumption
have to be described.
First when competences are pursued in the consumption of HRM services, employees are likely to
integrate resources because they are driven by their feelings to be effective and skillful in his or her
actions. And because the employee has the believe that he or she can influence important outcomes
(Stone et al., 2009; Vansteenkiste et al., 2007). This can be regarded as the definition of competence
driven consumption. Second when employees integrate the resources for relatedness and apply
them in their own way, they consume HRM services in such a way that the need for relatedness is
pursued. Relatedness driven consumption can be defined as the integration of resources that are
driven by the employee’s sense to have mutual respect, caring and reliance with others and the
desire to feel connected with others (Deci et al., 2001; Baumeister & Leary, 1995; Deci & Ryan, 2000).
Third this applies also on the integration of resources for autonomy and their unique application of
these resources, called autonomy driven consumption. This can be regarded as the integration of
resources that are driven by the employees feelings to make choices of personal interest as well as
the feeling to experience integration and freedom while doing his or her job (Deci & Ryan, 2000;
Marescaux et al., 2010)(see appendix IV). In sum, the consumption of HRM services regards the
integration of bundles of resources of both the HRM service provider and the employee’s own
resources that is driven by the need for competence, relatedness and autonomy. This results in the
first proposition:
Proposition 1: HRM consumption refers to the integration of resources that is driven by the
need for competences, relatedness and autonomy.
1.7 The effect of HRM consumption on the value of HRM for employees
Resources that are integrated can be combined, complemented, substituted and integrated together
in order to attain a goal and by that effectuate value (Halbesleben et al., 2014; Shah & Kruglanski,
2000; Kruglanski et al., 2011). Therefore when one consumes a HRM service because he or she is
driven by a certain need, the other forms of consumptions which are driven by other needs do not
have to be excluded from each other. This is because the pursuit of the three needs can occur at the
same time (Deci & Ryan, 2002). This just depends on how the HRM service is consumed and
therefore by which resources are integrated and how they are applied. Therefore, because several
ways of value can be established due to the integration of different sort of resources, value can be
23
affected by each of the HRM consumption types in the form of either human capital, social capital
and organizational capital. Each of the HRM consumption types however, is expected to have a
tendency to affect a specific value.
Every employee is assumed to have the need to be competent (e.g. Deci & Ryan, 2000). As a result of
this, he or she will consume HRM services in such a way that resources are integrated and applied,
which is driven by the employee’s feelings to be effective and skillful in his or her actions and by the
believe that important outcomes can be influenced (Stone et al., 2009; Vansteenkiste et al., 2007).
This aligns with the ideas that are derived from expectancy theory, that when one makes a goal to
fulfill a need he or she is more determined to actually achieve this goal (Vroom, 1964). Especially
when the employee feels that by pursuing a goal value can be established, it is more likely that actual
effort will be put in the achievement of this goal (Locke, 1980; Locke & Latham, 2002). As a result
when an employee integrates and applies resources such as his or her effectiveness and skillfulness
because he/she is driven by the need for competences, value can be achieved in the form of
knowledge, skills and abilities of the employee, which are incorporated by human capital. This value
that one can expect to be achievable can therefore act like an accelerator to actually consume HRM
services in such a way that competences are improved. As a result when one integrates and applies
resources because they are driven by the need for competences, he or she is more likely to
experience value in the form of the trade-off between human capital and costs. When an employee
integrates and applies resources because he or she is driven by the need for relatedness, and as such
driven by his or her sense to have mutual respect caring and reliance with others and the desire to
feel connected with others (Deci et al., 2001; Baumeister & Leary, 1995; Deci & Ryan, 2000). As it is
clear, this involves social interactions the employee can be involved in while doing his or her job and
making use of HRM practices. What these interactions and/or relationships of the employee can yield
is that knowledge is provided and shared, this resulting value incorporates the benefits of social
capital. Therefore, because valuable knowledge can be a result, the employee is more likely to make
a goal out of the need for relatedness and will consume HRM services by integrating (social)
resources and also apply them in a social and beneficial manner.
Consuming HRM services which is driven by the need for autonomy can be translated as the
integration and application of resources by the employee because he or she is driven by feelings to
make choices of personal interest as well as the feeling to experience integration and freedom while
doing his or her job (Deci & Ryan, 2000; Marescaux et al., 2010). Also when one strives to feel that he
or she is the initiator of his or her own actions and has the possibility to act based on their own
interest and values, autonomy can be improved (Deci & Ryan, 2000; Gagné et al. 2001). The valuable
outcome that one can expect to arise when he or she consumes HRM services in this way, can be the
codified knowledge that the employee makes use of. This outcome that could be valuable for the
employee is beneficial and is incorporated by organizational capital. When this value is expected to
be achievable, the employee is more likely to make a goal out of the need for autonomy and
accordingly integrates and applies the resources in such a way that this value can be established.
24
As a result all the HRM consumption types affect value, but most likely does each of the three HRM
consumption types have the tendency to affect one value more than another (see figure 1). Leading
to the statement of the next proposition:
Proposition 2A: Employees who engage in competence driven consumption are most likely to
experience high levels of human capital;
Proposition 2B: Employees who engage in relatedness driven consumption are most likely to
experience high levels of social capital;
Proposition 2C: Employees who engage in autonomy driven consumption are most likely to
experience high levels of organizational capital.
Figure 1: The three drivers of HRM consumption and the value of HRM
Competence driven
HRM consumption
Relatedness driven
HRM consumption
Autonomy driven HRM
consumption
Human Capital vs.
Nonmonetary costs
Social Capital vs.
Nonmonetary costs
Organizational Capital vs.
Nonmonetary costs
HRM
consumption
25
2. Method
2.1 Research design and context
As concluded in the theory section it was needed to explore which resources are integrated by
employees while they consume HRM services as well as how employees apply these resources in
order to pursue their needs during HRM consumption. As such the pursuit of the described needs
and perhaps also other goals that are set needed to be explored. Furthermore the levels of human
capital, social capital and organizational capital and costs that are experienced by employees were
needed to be researched. As a result because insights had to be gained on how employees make use
of HRM services and how they experience the dimensions of intellectual capital, the individual
employees themselves formed the unit of analysis. Because of the explorative nature of this study
the best suitable research design is that of a case study. Case studies are useful because they allow
the researcher to study a contemporary phenomenon within a real-life context. This is applicable in
this research because it aimed to explore which and how resources are integrated and applied by
employees (Yin, 2014). As a result the organization TUI Nederland formed the case that is studied in
this case study research. This organization is suitable for this research because employees at TUI
Nederland are offered various HRM practices. This provided the opportunity to explore how
employees consume the offered HRM services and how this generates value.
2.1.1. Organizational context
In order to research the phenomenon of which and how resources are integrated and applied by
employees, this case-study is set out at a Dutch office of TUI (Touristik Union International)
Nederland located in Enschede, the Netherlands. To create a better understanding first an overview
of this organization is provided where after an elaboration is given on the context in which
employees of TUI Nederland make use of the provided HRM services. Information is retrieved from
the annual report of TUI of the year 2015, employees as well as TUI’s HR professionals. Various
documents, for example TUI’s personnel guide, are also consulted to provide a good understanding
of the organizational context of TUI.
TUI Nederland is market leader in the Dutch leisure and tourism industry and is part of TUI Group.
With a recorded turnover of €20.1 billion and a net profit of €379.6 million in 2015, TUI Group is one
of the biggest travel organizations on the world (DeutscheWelle, 2014). Worldwide it has a number
of approximately 76.000 employees serving over 30 million customers annually. Customers can travel
to over 180 destinations, by for example one of the 140 aircrafts and 13 cruise ships and can stay at
over 300 hotels that TUI group owns. TUI Group exists out of local brands, which are all part of the
TUI Group (TUI/d, 2015). Together with TUI België, TUI Nederland forms the TUI Benelux cluster.
Each country serves their own source market, but on a lot of aspects however both countries work
heavily together and take advantage of the joint scale of operations. TUI Nederland has 2500
employees in the Netherlands who served 1,6 million travelers in front and behind the scenes in
2015. Moreover, TUI Nederland owns its own airline, TUIfly that has a fleet of nine aircrafts. TUI
Nederland offers holidays for travelers by its brands TUI, Holland International, Kras, Wedding
Unlimited and Extravacanza. Not only do these brands fall under TUI Nederland, also local physical
travel agencies are owned or franchised by TUI Nederland (TUI/a, 2016). TUI Nederland has
headquarters in both Rijswijk and Enschede and the airline TUIfly is located at Schiphol-Rijk.
