The where and the who of HRM decision-making: HRM decentralization and devolution

Abstract

Purpose – HRM decentralization and devolution have been highlighted as key HRM processes in organizations’ quest for increased flexibility. Although they have been extensively studied in the MNC and International HRM literature, they have mainly been examined on a separate basis, and their definition and operationalization have often been confused. Thus, we first clarify the difference between the two concepts by refining the definitions by Hoogendoorn and Brewster (1992), and then empirically examine how they are related. Design/methodology/approach – The relationship between HRM decentralization and devolution is examined by means of a survey in a large multi-country sample of multi-unit organizations. Findings – Regarding our clarification objective, we contend that devolution has to do with who takes responsibilities for HRM (i.e. line managers or HRM professionals) while decentralization refers to where HRM responsibilities are allocated (i.e. headquarters or increasingly local units). Regarding the relationship between the two concepts, the results show that higher levels of HRM decentralization are related to higher levels of devolution, but this association is attenuated in organizations with more powerful HRM departments. Originality/value – The study contributes to theory and practice by disentangling, at the conceptual, operational, empirical and practical levels, two different but related HRM decisions (how much to devolve and how much to decentralize HRM) that organizations must make to efficiently cope with the characteristics of their own structure and competitive environment. It highlights the role of the relative power of HRM departments in how HRM responsibilities are ultimately distributed across the organization.