Organisations today are increasingly incorporating the use of both recruitment practices and stress management practices in the workplace; it is possible to use institutional theory to ascertain why this is the case. Bruton et al (2010) notes that ‘institutional theory is traditionally concerned with how various groups and organisations better secure their positions and legitimacy by conforming to the rules and norms of the institutional environment’, thus engaging with regulatory, cultural and social influences that promote the legitimacy of an organisation. Moreover organisations and individuals are expected the follow rules and assumptions set by ‘institutions’ such as governmental agencies, laws, courts, professionals and other societal and cultural practices that exert conformance pressures (DiMaggio and Powell, 1983); all of which ‘create expectations that determine appropriate actions for organisations’ (Meyer and Rowan, 1991). Furthermore the ‘appropriate actions’ of organisations have led to the existence and rise of recruitment practices such as interviews, psychometric tests and assessment centres, and stress management practices such as stress audits amongst employees or employee assistance programs (EAPs); this essay will aim to determine why organisations use such practices based on the ideas introduced through institutional theory.
It is first necessary to discuss the meaning of legitimacy and why it is important to organisations. Over the years, many academics and researchers have offered many definitions of legitimacy, yet most deduce legitimacy and institutionalisation are synonymous. Meyer and Scott (1983) take a broad perspective and suggest organisational legitimacy refers to ‘the extent to which the array of established cultural accounts provide explanations for [an organisation’s] existence’. Suchman (1995) builds on this cultural view and chooses to incorporate both evaluative and cognitive dimensions; he states legitimacy is a ‘generalised perception or assumption that the actions of an entity are desirable, proper or appropriate within some socially constructed system of norms, values, beliefs and definitions’. Suchman (1995) states his view ‘explicitly acknowledges the role of the social audience in legitimation dynamics’ thus is linked with Dowling and Pfeiffer’s (1975) proposals regarding legitimacy as being socially constructed when they note that ‘organisations are legitimate to the extent that their activities are congruent with the goals of the superordinate system’. By looking at these definitions we can see that legitimacy is an umbrella term which is easily generalised and heavily weighted on the outcomes of cultural and historical events or norms within wider society.
Organisations’ quest for legitimacy is due to a number of reasons. According to institutional theory, organisational survival (or success) is linked to legitimacy (Meyer and Rowan 1977), thus implying securing and maintaining legitimacy is a substantial priority for organisations. Parsons (1960) suggests ‘legitimacy leads to persistence because audiences are most likely to supply resources to organisations that appear desirable, proper or appropriate’; therefore impacts the way in which individuals or groups act or behave towards a certain organisation. As a consequence, legitimacy increases the chances of acquiring necessary resources needed for growth and survival such as employees, clients, networks, technology and capital (Aldrich and Fiol, 1994).The actions of the organisations target audience are thus important because it affects the way in which organisations are able to build relationships, gain resources and grow; this is acclaimed by Zimmerman and Seitz (2002) when they note that by building legitimacy, organisations have easier access to the strategic resources that are critical for their growth and survival. At the same time however, Suchman (1995) signifies legitimacy also affects how people understand organisations; he suggests ‘audiences perceive the legitimate organisation not only as more worthy, but also as more meaningful, more predictable and more trustworthy. This supports Jepperson’s (1991) view that part of the cultural congruence captured by the term legitimacy involves ‘the existence of a credible collective account of rationale explaining what the organisation is doing and why’. Further encouraging this view Meyer and Rowan (1991) claim ‘organisations that lack acceptable legitimated accounts of their activities are more vulnerable to claims that they are negligent, irrational or unnecessary’; this demonstrates the importance of honesty and meaningfulness (as noted by Suchman, 1995) required for organisations to be legitimate, and thus succeed. Lastly, it is often the case that when a company loses its legitimacy, social support for it disappears (Vanhonacker, 2000), therefore negatively affecting its reputation.
Moreover, it is possible to assert three different types of legitimacy that exist today. These are created and summarised by Scott (2004) in his well-known formulation of three categories of institutional forces; they are known as regulative legitimacy, normative legitimacy and cognitive legitimacy. The regulative pressures focus on the ability of institutions to regularise and constrain the behaviour of organisations; these components stem primarily from government legislation and industrial agreements and standards (Bruton et al, 2010) and are typically based on legal sanctions and conformity. The normative pressure comes from a circulation of ideas about what is appropriate or elected in various social and commercial situations, thus developing certain notions about how outcomes are best achieved. Bruton et al (2010) expands on this and states the normative pillar represents ‘models of organisational and individual behaviour based on obligatory dimensions of social, professional and organisational interaction’. Normative institutions therefore exert influence because of a social obligation to comply which is rooted in the social necessity of what an organisation should be doing (March and Olsen, 1989) and how organisations should morally be governed. Finally the cognitive pressure represents taken for granted ideas about what certain organisations should be like and stresses the shared understanding and conceptions that constitute the nature of social reality. Palthe (2014) suggests cognitive pressures are likely to focus on conceptual beliefs and interpretations of shared meanings; this implies the cognitive pillar may operate on an individual level and is primarily associated with preconscious behaviour that people barely think about (DiMaggio and Rowan, 1991).
After defining and exploring the institutional idea of legitimacy, it is clear that legitimacy is linked with why organisations use recruitment practices and stress management practices. Scott (2004) proposes organisations incorporate an array of structures, policies and practices because they want to appear legitimate in the eyes of stakeholders. Recruitment and stress management practices fall under the ‘policies and practices’ category of this statement thus introducing the primary reason why organisations incorporate these practices- to build and maintain legitimacy. Legitimacy can be created and sustained in many forms and is and affected by a number of regulative, normative and cognitive pressures in the institutional environment. In the next part of this essay I will discuss in depth the reasons organisations use recruitment and stress management practices according to institutional theory; this will consist of explanations regarding the institutional pressures on organisations to use legitimate recruitment and stress management practices, the well established legitimacy of the ‘person-job fit’ discourse and its influence over the organisational use of selection practices, and why decoupling is relevant with respect to maintaining the legitimacy of recruitment and stress management practices.
I will first discuss the institutional pressures organisations face which affect their decisions to implement recruitment and stress management practices. Kleinmann et al (2010) note that organisations try to legitimise their behaviour by conforming to the norms, requirements and myths of their environment which can ultimately lead to a number of outcomes including increased prestige, protection from public criticism, attraction of skilled personnel and increased access to resources. This implies factors in the environment increasingly encourage organisations to implement recruitment and stress management practices which best satisfy stakeholder needs and expectations, thus offering crucial rewards needed for growth and development.
Furthermore, organisations may implement certain recruitment processes as an opportunity to promote themselves. According to Oliver (1991), ‘organisations seeking legitimacy can endeavour to manipulate the expectations held by stakeholders by influencing these stakeholders via organisational self-promotion activities’ (Klienmann et all, 2010); this suggests that if selection procedures and stress management practices are deemed advantageous for organisations to use self promotion, the organisation is more likely to use this method. For example according to Dipboye (1994), low structure interviews seem to persist in practice because they are more personally satisfying for interviewers; he further states ‘low structure interviews provide interviewers with the opportunity to express their idiosyncratic preferences’. This is likewise mentioned by Lievens & De Paepe (2004) who claim an ‘unstructured interview may leave room for interviewers to praise organisational tactics in conformance with legitimised norms’. This suggests a reason organisations may use recruitment and stress management practices is to positively alter the opinions of external audiences in order to better promote the organisation.
Moreover, another way to achieve legitimacy and thus a reason for implementing policy according to organisations is to mimic the recruitment and stress management practices of other organisations in their field or industry. Mimicking often takes place when organisations are uncertain of their environment due to institutional pressures such as new legal regulations or market unpredictability (Klehe, 2004). This process is also known as ‘diffusion’, Klehe (2004) states ‘the diffusion of comparable selection procedures in the field is likely to influence the perceived legitimacy and hence adoption of a specific selection procedure’, thus implying the more a selection procedure is perceived to be diffused in the field, the more likely it is that an organisation will use that procedure. This brings about the idea that the social validity of institutional norms is mostly unquestioned if these norms have been diffused across an organisational field, therefore attributing to rising legitimacy and increasing the chances of policy adoption amongst organisations. Additionally, DiMaggio and Powell (1983) raise the idea of interconnectedness stating it heightens policy and practice diffusion, and additionally proposed that it promotes institutional conformity. The idea of diffusion can also be applied to stress management practices, such as in Spell and Bum’s (2005) research claiming diffusion has been used to explain the reasons organisations implement substance abuse programs which could be seen as an attempt to combat personal stress in the workplace (Kliennman et al, 2010); this research implies diffusion serves to help organisations conform to institutional elements centred around the procedures which increase legitimacy in the eyes of stakeholders.
Additionally Oliver (1991) introduces the idea that ‘institutional constituents, including the state, professions, interest groups, and the general public, impose a variety of laws, regulations, and expectations on organisations’. Klehe (2004) expanded on this idea, he further states if the organisation is dependant on and has limited control over the constituent then the organisation will impose great efforts to satisfy that constituents demands. This is relevant with respect to applicant reactions to selection processes. It is important to organisations that selection procedures are accepted by job applicants because applicants have the power to raise complaints against the organisation, to refuse job offers or to withdraw their applications (Klienmann et all, 2010). This has a negative impact on organisations because it can decrease an organisations attractiveness which therefore may result in financial losses or skilled applicants withdrawing applications or refusing job offers, which will reduce the organisations’ ability to succeed and grow. This emphasises why organisations need to implement recruitment practices which appear attractive and feasible to potential applicants, thus seeming legitimate. It has also been noted that failure to adhere to applicant reactions has led to applicants perceiving selection practices to be unethical or unfair (Klehe, 2004). This highlights the potentially destructive impacts negative applicant reactions can have on organisations and further accentuating why organisations need to secure legitimate recruitment practices.
Finally, organisations adopt the use of legitimate formal policies relating to recruitment and stress management practices in order to avoid legal sanctions (Bromley and Powell, 2012). Edelman et al (1999) supports this proposal and suggests ‘organisations seek to act rationally in response to laws which are driven by institutionalised stories about the value of particular organisational structures and actions’, this implies by adopting practices which are in compliance with the law, organisations appear more legitimate amongst stakeholders and thus have a more positive reputation which will facilitate increased growth. Further, Klienmann at al (2010) agrees with this and states ‘the interest of organisations in meeting legal regulations regarding their selection procedures is likely to be strong given the high direct and indirect costs associated with charges raised against them’. If charges are raised against organisations for legal reasons, the legitimacy of an organisation will plummet and the organisation will incur huge detrimental damages such as reputation loss and issues with recruitment and retention; other costs directly related to loss would include those associated with litigation or financing the alteration of selection procedures. For example, according to the Equal Employment Opportunities Commission (EEOC) in the US, selection procedures are required to be based on systematic job analysis and are validated for the positions and purposes for which they are used; further, employers must not use such selection processes to discriminate on any grounds (EEOC, 2010), thus reiterating the severe regulations organisations should abide by in order to maintain legitimacy and to avoid legal complications when adopting particular selection practices. Oliver (1991) further supports this when noting that ‘when the force of law or government mandate buttresses cultural expectations, organisations are made more aware of public interests and will be less likely to respond defiantly because the consequences of noncompliance are more tangible and often more severe’. This further emphasises an important reason organisations adopt specific recruitment and stress management practices- in order to avoid negative contact with the law. In closing, organisations often choose to adopt recruitment or stress management practices if there is high perceived legality associated with it.
It is now important to discuss the relevance of decoupling in maintaining the legitimacy of recruitment and stress management practices. Scott (2008) explains decoupling is when organisations adopt policies to conform to external expectations regarding formally stated goals and operational procedures, but in practice did not markedly change their behaviour. Meyer and Rowan (1977) build on this and state ‘decoupling is a process by which institutions seek to protect their core processes from evaluation in order to preserve their legitimacy’. Scholars assert two types of decoupling, these are policy-practice and means-ends. Bromley and Powell (2012) assert that at the policy-practice level, decoupling occurs when ‘rules are unimplemented or routinely violated’, and the focus is primarily on why and how managers fail to or avoid implementing regulations. Moreover, Bromley and Powell (2012) also claim means-ends decoupling occurs when polices are implemented but little evidence exists to show that these formal polices are linked to the intended organisational effectiveness or outcome. Both types of decoupling facilitate an organisations ability to control legitimacy in the external environment and also enables organisations to maintain their legitimacy in the face of conflicting institutional demands (Schoeneborn and Haack, 2015). Further, organisations may be held accountable to a large number of stakeholders such as investors, shareholders, other organisations and customers, thus imposing a greater pressure on an organisations ability to satisfy the needs of all, which is also dependant on the size or status of the organisation.
Firstly, policy-practice decoupling allows organisations to respond to numerous external pressures by adopting several, even conflicting policies; by doing this organisations do not need to disrupt operations by attempting to implement strategies which are inconsistent or not relevant to the core goals of the organisation, this allows them to appear legitimate to stakeholders or other legal entities without actually abiding to norms or regulations in the external environment. Moreover Dick (2015) notes that the enactment of policy-practice decoupling prevents negative reactions feeding back into the institutional environment. For example, evidence of policy-practice decoupling being used to gain legitimacy successfully can be found from Westphal and Zajaz (1994) who demonstrated that some formal employee initiatives such as long term incentives and personal (stress) management programmes could be formally declared without actually being implemented, and thus still aid the organisation to maintain or gain legitimacy from external audiences. Additionally, there has been research into decoupling in hospitals by Covaleski and Dirsmith (1983) who found employees were experiencing being overworked and had limited resources; this prompts the incentive of organisations to appear legitimate and disguise internal operations, which is a potential reason for why stress management policies are adopted and thus decoupled in order to maintain legitimacy to external audiences.
Likewise, Bromley and Powell (2012) allege that means-ends decoupling is created by the external environment due to generating myths of causality, coherence and control which organisations are primarily structured around. They add to this and suggest that these ‘rationalising accounts provide organisations with appropriate means and ends, particularly in highly rationalised and fragmented environments’. This idea introduces that concept of ‘rational myths’ which are defined by Edelman et al (1999) as ‘belief systems that embody stories about cause and effect and successful solutions to problems’. These belief systems put pressures on organisations to follow such beliefs and thus enabled the development of the ‘person-job fit’ discourse; this discourse is highly legitimate in that most people believe the process of recruitment practices is to assess the ‘fit’ of an individual to the core goals and values of that particular organisation. The discourse assumes ‘fit’ can be assessed and that the interview is the primary tool in assessing it, these ideas comprise the rational myth of recruitment practices. This discourse is relevant to means-ends decoupling because this type of decoupling captures the practice of recruitment interviews in that the interviewing of a candidate is implemented by organisations, but there is no evidence to suggest the interview fulfils the function of fitting the right candidate to the right job role in the organisation, or that the candidate is suited to the organisations core goals and values. Moreover, Bromley and Powell (2012) argue that the influence of ‘audit cultures’ through ‘increasing emphases on monitoring and tracking organisational activities’ force organisations to conform to certain practices such as interviews and assessment centres; this highlights why organisations are now using means-ends decoupling to pursue legitimacy while also attempting to protect their core activities from external disruption (Meyer and Rowan, 1977). Furthermore, Dick (2015) supports that means-ends decoupling is becoming more prevalent in organisations when noting that organisations are confronted with increasing demands for accountability and are facing the brunt of progressively institutionalised environments, thus they attempt to gain legitimacy from a fragmented range of uncoordinated stakeholders (Kraatz and Block, 2008). This suggests that potential job applicants along with others are putting pressure on organisations to implement recruitment practices according to the way deemed most legitimate and diffused amongst other organisations; thus forcing organisations to decouple from means to ends which leaves fragmented, inconsistent organisational practices. Despite this, organisations continue to try to gain legitimacy from their external environment by creating symbolic and visible recruitment and stress management practices which demonstrate their compliance with societal norms, while simultaneously often decoupling those structures from their core processes. This perspective therefore explains how decoupling certain policies such as recruitment and stress management practices enhances perceptions of organisational legitimacy held by external audiences without significantly changing organisational practice (Behnam and MacLean, 2010), and hence another reason organisations adopt and implement those practices.
In conclusion, it is clear in this essay several relevant points have been discussed in answer to why organisations adopt recruitment and stress management practices. I have argued that the central reasons for this are based upon ideas introduced through the institutional theory of legitimacy, mainly regarding the ever growing pressures organisations face from their external environment and chiefly in relation to societal norms, the quest for legitimacy and increased monitoring through the legal system. Bromley and Powell (2012) strongly support this argument noting that in recent decades, ‘external influences on organisations have intensified, perhaps nowhere more notably than in potent movements toward accountability, assessment, and transparency’; I have argued that this has led organisations to become more responsive and alert to their external environment and has altered the way they perceive themselves to outside audiences in order to be understood as legitimate. I have also discussed the ways in which these efforts have created a decoupling of formal polices and practices, and further why this decoupling is extremely relevant in maintaining the legitimacy of recruitment practices, stress management practices, and other organisational policies as a whole. Furthermore I have also discussed the highly legitimate person-job fit discourse and its relevance to organisations when adopting recruitment practices. Finally, the pursuit for legitimacy is the fundamental reason why organisations incorporate an array or structures, policies and practices such as those used for recruitment and stress management; in order to gain legitimacy organisations must comply and conform to an array of pressures from the external environment and may also experience some form of decoupling in order to satisfy the needs of many, often conflicting stakeholders.