Lepak & Snell (1998)

Please be careful here! There is no one best way for allocating HRM activities to HRM actors. In fact, every organization makes different decisions depending on its strategic goals. Let’s consider the outsourcing of HRM activities, as an example. First of all, an organization has to decide which HRM activities to outsource and which ones to keep in-house. Two important criteria for making this decision relate to whether an HRM activity is valuable to the strategic goals of the organization and whether the HRM activity is unique or specific to the organization. HRM activities that are highly valuable are executed by actors within the organization. Those which have little strategic value are outsourced.

In case outsourced HRM activities are generic across organizations they can be easily outsourced. And as an example, many different companies may make use of an outsourcing vendor that does the payroll administration for them. To ensure that the payroll company offers high quality services, outsourcing contracts contain specific service level agreements that specify when salaries need to be paid or which percentage of transactions needs to be succesfully completed.