The role of deferred action in demystifying the “black box” of human resource management during economic crises

Purpose This research investigates how and why human resource (HR) adjustments are made during times of significant crisis and analyses choices HR managers make to enhance business performance during crises. Design/methodology/approach Qualitative data (23 interviews and four years' financial performance data) were gathered from multiple sources. Organisational documents were also used as secondary data. Collective analysis was undertaken of the above Jordanian banks' data on their performance especially those that survived the global financial crisis. Findings The findings reveal that before the crisis, the investigated banks had made HR policy choices that emphasised flexibility to respond to changes in the business environment during the crisis. We also unveil the role that cultural and economic pressures played in decisions about the deployment and adjustment of HR policies. Finally, HR departments played the role of business partners and employee champions during the crisis. Research limitations/implications Findings confirm the relevance of HR as a business partner and an employee champion. We demonstrate how soft and hard human resource management (HRM) practices can be used to drive firm performance, especially as HR function tends to be viewed less as an organisational asset and more as an administrative cost. Originality/value We uncovered the role of deferred HR action in organisations' crisis response strategies, finding that a combination of soft and hard practices enhances performance under such conditions. We contribute to a new dimension of HR flexibility: policy flexibility and highlight the role played by societal, cultural and economic pressures in the decisions these firms made about their HR practices.