A Model for Conformity of HRM Practices, Based on Transactional Cost Theory and Internal Labour Market Approach

In this paper, with usage of translational cost theory and internal labor market approach, two basic aspects in organizational jobs – measurability and competence – were defined. Next, by combining these attributes, four internal organizational structures were identified as the following: Relational team, primitive team, spot market, obligational market. Afterwards, the proper human resource practices were explained for each of these structures. Data were collected from one of the largest service organizations of Iran. Using checklist, 400 out of 4463 job titles, which were supposed to share more similarities with the mentioned structures were selected. A group of 156 managers and HRM specialists of ‘NAJA’ were chosen for explaining the suitable HRM practices for each of the structures. Analysis of the data revealed: in ‘primitive teams’ and ‘spot markets,’ job compensation was only limited to the wage, and human resource planning encompasses a short period. Conversely, in ‘relational teams’ and ‘obligation markets,’ compensations were various in type and were not just limited to the wage, also, the HRM planning was for longer terms. Moreover, HRM control over ‘relational team’ and ‘primitive teams’ took more internal forms such as socializing and building commitment, while in ‘spot market’ and ‘obligation markets’ it was external and formal.