Double-edged effect of talent management on organizational performance: the moderating role of HRM investments

Abstract

More than a decade after the publication of the book The War for Talent, there has been growing interest in the role of talent management in achieving organizational success. Although past studies have empirically investigated the role of talent management and its positive association with organizational performance, few studies have integrated the bright and dark sides of talent management. Using a sample of 444 firms in South Korea, this study finds that talent management has a double-edged effect on firm outcomes, including innovation and voluntary turnover rate. Moreover, it finds that the effect of talent management considerably varies across organizational contexts. Specifically, this study identifies the conditions under which the negative role of talent management changes across different levels of human resource management investments. Demonstrating the dual direct effect and contextual effect of talent management, this study provides reference for future studies on talent management, specifically those that aim to discover the mechanisms influencing the distinguished role of talent management in organizational outcomes. This study further discusses the theoretical and practical implications.