The Configurational Approach (Bundling)

As Richardson and Thompson (1999) comment, ‘A strategy’s success turns on combining “vertical” or external fit and “horizontal” or internal fit.’ They conclude that a firm with bundles of HR practices should have a higher level of performance, provided it also achieves high levels of fit with its competitive strategy. Emphasis is given to the importance of ‘bundling’ – the development and implementation of several HR practices together so that they are interrelated and therefore complement and reinforce each other. This is the process of horizontal integration, which is also referred to as the adoption of a ‘configurational mode’ (Delery and Doty, 1996) or the use of ‘complementarities’ (MacDuffie, 1995), who explained the concept of bundling as follows:

Dyer and Reeves (1995) note that: ‘The logic in favour of bundling is straightforward… Since employee performance is a function of both ability and motivation, it makes sense to have practices aimed at enhancing both.’ Thus there are several ways in which employees can acquire needed skills (such as careful selection and training) and multiple incentives to enhance motivation (different forms of financial and nonfinancial rewards). Astudy by Dyer and Reeves (1995) of various models listing HR practices which create a link between HRM and business performance found that the activities appearing in most of the models were involvement, careful selection, extensive training and contingent compensation.


The aim of bundling is to achieve coherence, which is one of the four ‘meanings’ of strategic HRM defined by Hendry and Pettigrew (1986). Coherence exists when a mutually reinforcing set of HR policies and practices have been developed that jointly contribute to the attainment of the organization’s strategies for matching resources to organizational needs, improving performance and quality and, in commercial enterprises, achieving competitive advantage.


The process of bundling HR strategies (horizontal integration or fit) is an important aspect of the concept of strategic HRM. In a sense, strategic HRM is holistic; it is concerned with the organization as a total entity and addresses what needs to be done across the organization as a whole in order to enable it to achieve its corporate strategic objectives. It is not interested in isolated programmes and techniques, or in the ad hoc development of HR practices.


In their discussion of the four policy areas of HRM (employee influence, human resource management flow, reward systems and work systems) Beer et al (1984) suggested that this framework can stimulate managers to plan how to accomplish the major HRM tasks ‘in a unified, coherent manner rather than in a disjointed approach based on some combination of past practice, accident and ad hoc response to outside pressures’.


The problem with the bundling approach is that of deciding which is the best way to relate different practices together. There is no evidence that one bundle is generally better than another, although the use of performance management practices and competence frameworks are two ways that are typically adopted to provide for coherence across a range of HR activities. Pace the findings of MacDuffie, there is no conclusive proof that in the UK bundling has actually improved performance.