Human resource management systems,employee well-being,and firm performance from the mutual gains and critical perspectives: The well-being paradox

In this study, we explored the additive, interactive, and nonlinear relationships among human resource management (HRM) systems, employee well-being, and firm performance. Based on a sample of 14,384 employees nested within 1,347 firms, we obtained three main findings. First, HRM systems yield a performance effect that exceeds the effect of single practice, suggesting positive synergies among HRM practices. Second, the opportunity bundle has a positive impact on firm performance, but when integrating it with skills and motivation bundles, the result becomes negative, indicating dis-synergy of interactions among HRM bundles. Third, at moderate levels of adoption, HRM practices are positively correlated with employee well-being and higher levels of commitment, job satisfaction, and management relations, as well as lower levels of anxiety. However, at high levels, the relationship is less positive and even turns negative with lower levels of job satisfaction and management relations. To close, we present research implications and future directions after discussing our results.     

Human resource management systems and organizational performance: a test of a mediating model in the Greek manufacturing context

This paper investigates the relationship between systems of HRM policies and organizational performance. The research is based on a sample of 178 organizations operating in the Greek manufacturing sector. A mediation model is tested to examine the link between HRM and organizational performance. The results of this study support the hypothesis that the relationship between the HRM systems of resourcing–development and reward–relations, and organizational performance, is mediated through the HRM outcomes of skills and attitudes. The paper not only supports the theory that HRM systems have a positive impact on organizational performance but also explains the mechanisms through which HRM systems improve organizational performance.     

Human resource management and employee well‐being: towards a new analytic framework

The mutual gains model suggests that HRM should benefit both individuals and organisations. However, the dominant models within HRM theory and research continue to focus largely on ways to improve performance, with employee concerns very much a secondary consideration. Furthermore, pressures at work and in society more widely are creating an increasing threat to employee well‐being. If employee concerns and the threats to well‐being are to be taken seriously, a different analytic framework for HRM is required. The article sets out an alternative approach to HRM that gives priority to practices designed to enhance well‐being and a positive employment relationship, proposing that both elements are essential. Evidence is presented to support the choice of practices and to argue that these also hold the potential to improve both individual and organisational performance. It therefore offers a different path to mutual gains. The research and policy implications of this approach are discussed.     

Human resource management and performance in a developing country: the case of Eritrea

This study investigates the relationship between human resource management (HRM) practices and organizational performance. Results based on a sample of 82 organizations from private and public sectors in Eritrea indicate that some of the practices have a significant impact on employee turnover, absenteeism, grievances and productivity. While compensation was the only independent variable found to be statistically significant in affecting grievances, employee selection had no effect across all performance measures. However, the study's results offer support for the assertion that investments in HRM practices results in better organizational performance.     

Work enrichment and employee voice in human resource management-performance studies

Studies assessing the link between human resource management and performance were spawned by the high commitment or high involvement models. We show that work enrichment and employee voice were central to these models, yet as resource-based theory was increasingly used to justify the association of such models with high performance the seeds for a diminishing role for employee involvement were set. We then assess the associated empirical work, and show how employee involvement is neglected in favour of alternative emphases on skills and knowledge, labour flexibility and extrinsic motivation. It is proposed that future work should abandon the dominant approach of testing a single null hypothesis and instead examine competing models of the HRM–performance relationship.     

HRM systems between control and commitment: occurrence,characteristics and effects on HRM outcomes and firm performance

In the literature, it is often assumed that traditional, control‐oriented HRM systems are increasingly being replaced by commitment‐based HRM systems because the latter generally result in higher firm performance. However, an HRM system's effectiveness may depend on an organisation's external and internal context, and neither control nor commitment HR systems are without disadvantages. Thus, the empirical validity of this claim is not clear ex ante. This paper analyses the empirical diffusion and determinants of control and commitment HRM systems in Germany as well as their impact on HRM outcomes and firm performance. The findings indicate that between the two extreme forms of high‐control and high‐commitment HRM systems, there are two hybrid forms (long‐term‐oriented control system and regulated commitment system) that combine elements of both ‘pure’ systems. Commitment HRM systems outperform the high‐control HRM system concerning many HRM outcomes and firm performance measures. However, in direct comparison, the high and the regulated commitment HRM systems do not show substantially different outcomes, indicating that there is no one best way.     

Human resource management in relation to generic strategies: a comparison of chemical and food&drink companies in the Netherlands and Great Britain

In this paper, specific personnel policies and their relationship to generic strategies are examined in the light of the concept of human resource management (HRM). Since data from twelve Dutch and eight British companies in the food&drink and chemical industries reveal that the implementation of HRM components is subject to a societal effect–and thus HRM has a different meaning in Dutch companies than in their British counterparts–a typology of HRM at a more strategic level is proposed to facilitate the analysis of the relationship between HRM and generic strategies. Although in the majority of cases the HRM policy supports the generic strategy pursued, many problems and paradoxes remain in the analysis of an HRM–strategy fit.     

The role of employee HR attributions in the relationship between high‐performance work systems and employee outcomes

Although research has shown that the use of high‐performance work systems (HPWS) is associated with employee outcomes, our knowledge of the meanings employees attach to HPWS systems and how these shape employee outcomes is still limited. This study examines the signalling impact of enacted HPWS on HR well‐being and HR performance attributions, and how these influence happiness‐ and health‐related outcomes. Using multilevel data (1,065 employees nested within 150 work units) obtained from multiple sources (line managers and employees), our results show that coverage of HPWS was positively associated with the two HR attributions. In addition, HR well‐being attributions were associated with higher levels of commitment and lower levels of job strain. HR performance attributions were associated with higher levels of job strain. The findings of this study highlight the importance of taking into account how employees attach meaning to enacted HPWS in order to predict employee outcomes.     

Human resource management practices and psychological contracts in Swiss firms: an employer perspective

This article investigates the relationship between HRM practices and organisational performance, considering the fulfilment of the psychological contract as an intermediate variable. Apart from testing the influences of a high-investment HRM system index on the psychological contract, the influence of individual HRM practices and their interaction was examined. The sample consisted of HR managers of 92 firms in Switzerland and the data were collected for the Cranfield Network project. The results showed that the high-investment HRM system index predicted the fulfilment of the psychological contract, and some of the individual HRM practices were correlated with the fulfilment of the psychological contract. The interaction effect of performance appraisal and performance-based pay on the fulfilment of the psychological contract showed that performance appraisal is only effective in combination with a tangible consequence in the form of performance-based pay. We neither found a mediation effect for the psychological contract nor an association with organisational performance. This might be due to the fact that the questionnaire was filled in during the financial crisis in 2008 and that the organisational performance was assessed in an economic crisis. Our study sheds light on the relationship between HRM practices and the psychological contract and contributes to the body of research on psychological contracts from a macro level perspective.     

A meta‐analytic investigation of the relationship between HRM bundles and firm performance

Human resource management bundles consisting of multiple complementary practices are typically considered superior to individual best practices in influencing firm performance. This study investigates the relationship between three such bundles (empowerment, motivation, and skill‐enhancing) and business outcomes (retention, operating performance, financial performance, and overall performance ratings). A meta‐analysis of 239 effect sizes derived from 65 studies reveals that HRM bundles have significantly larger magnitudes of effects than their constituent individual practices, are positively related to business outcomes, and display effect sizes that are comparable to or larger than those of high‐performance work systems. These findings reaffirm the case for firm‐level investments in synergistic HRM combinations and highlight the importance of investing in complementary practices. © 2009 Wiley Periodicals, Inc.     

Human resource management and performance: lessons from the Netherlands

The relationship between HRM and firm performance has been a hotly debated topic over the last decade, with the great bulk of the primary scientific research coming from the USA and, to a lesser extent, the UK. We start with an overview of this research to give a frame of reference to compare the findings from the Netherlands. By comparing the results of research in the Netherlands with those in the USA and the UK we hope to reveal the secret of achieving 'competitive advantage through people' (Pfeffer, 1994) in the Netherlands. The comparison may further allow us to supplement resource-based approaches with a more institutional perspective.     

Innovative human resource management and corporate performance in the context of economic liberalization in India

The Indian economy was forced to adopt a structural adjustment programme at the beginning of 1991. The structural adjustment programme or liberalization initiated the process of the opening up of an otherwise closed economy of India. Liberalization created a hyper-competitive environment and to respond to this turbulence, Indian organizations adopted innovative changes in their HRM practices. Current research shows that HRM practices are important for enhanced corporate performance but little has been reported on the effect of HRM practices and corporate performance in the context of economic liberalization of India. This study tries to understand the role of innovative HRM practices and specifically questions how HRM practices, such as the role of HR department, recruitment, retraining and redeployment, performance appraisal and compensation, enhance corporate performance during the change process. A multiple-respondent survey of 69 Indian organizations was undertaken to study the impact of innovative HRM practices on firm performance. The survey found that the innovative recruitment and compensation practices have a positive significant relationship with firm performance. It was observed that recruitment, the role of the HR department and compensation practices seem to be significantly changing within the Indian firms in the context of India's economic liberalization. The synergy between innovative HRM practices was not significant in enhancing corporate performance during the liberalization process.     

Bundles of HRM practices and performance: empirical evidence from a Latin American context

This article examines the extent to which the configuration of HRM practices in bundles and the interactions among them have a significant impact on manufacturing outcomes. Using a unique data set from a survey of a representative sample of the whole Uruguayan manufacturing industry, several hypotheses related to interactions between ability–motivation–opportunity bundles of HRM practices are tested. Analysis of 150 manufacturing plants partially highlights the existence of hierarchy between bundles, being the bundle of motivation‐enhancing HRM practices the most important to explain the enhanced manufacturing outcomes. Based on this bundle of practices, synergistic interactions with both ability and opportunity bundles of HRM practices were observed to explain different performance measures.     

Virtuous circle: Human capital and human resource management in social enterprises

The majority of the extant research on human resource management (HRM) draws conclusions based on evidence from for-profit organizations. In response to calls for the exploration of HRM in different contexts, this study focuses on understanding HRM in the context of social enterprises. The unique context of social enterprises and their unique workforce raise questions about the direct applicability of frameworks developed from examining HRM in for-profit organizations. The narratives provided by 20 CEOs, HR directors, and managers of social enterprises in the United Kingdom highlight the importance of “ethics of care” as the core of the HRM-related decisions in the “third sector.” In addition, we identify five distinct workforce categories and propose a typology of differentiated HRM systems that enable social enterprises to achieve their dual mission. Finally, we propose a “virtuous circle” model, highlighting “ethics of care” as the main driver for organizational outcomes, using differentiated HRM systems that better serve their needs.     

Environmental dynamism,human resource flexibility,and firm performance: analysis of a multi-level causal model

While strategic HRM scholars have conceptualized HR flexibility as an important source of sustainable superior firm performance in dynamic environments, the process through which HR flexibility creates value for the firm has not been empirically investigated. Based on a study of 98 manufacturing and 103 service firms from a wide array of industries in India, this paper attempts to illuminate the black box of causal linkages between environmental dynamism, flexibility of human assets, and firm level human-, operational-, and financial-outcomes by developing and testing a multi-level causal model. Evidence indicates that HR flexibility mediates the influence of environmental dynamism on firm performance and that irrespective of the nature of the industry and the degree of environmental turbulence, superior firm performance ensues when HR flexibility as actually possessed by the firm matches the environmental demands for such flexibility as perceived by the firm managers. The results also support the notion of HR value chain that postulates that HR system has direct impact on firm-level HR outcomes which are most proximal, and its effects on increasingly more distal operational- and financial-outcomes are mediated by HR outcomes. The findings of the study suggest that HR practices as a system have both direct and indirect (mediated by behavioral flexibility) effects on firm-level HR outcomes. Existence of significant direct effects signifies that HR practices play an important role as a structural mechanism in achieving superior firm performance.     

Strategy, human resource management and performance: Sharpening line of sight

This paper builds on previous theory and research on strategy and human resource management to identify important linkages between the firm's strategy, its human resources, and performance outcomes. First, we review the relevant literature focusing in particular on the role of human resources in creating competitive advantage. We then present a multi-level model illustrating how human resource management practices can effectively align organizational, group and individual factors with the organization's strategy. We redefine line of sight as the alignment of organizational capabilities and culture, group competencies and norms, and individual KSAs, motivation and opportunity with one another and with the organization's strategy. Further, we propose that such alignment contributes to the creation of human capital and social capital, both of which are necessary to achieve and sustain superior performance. We conclude the paper with some implications for future research and practice.     

Customer service-focused HRM systems and firm performance: evidence from the service industry in Taiwan

Abstract

This study adopts a resource-based view, attraction–selection–attrition theory and a focused approach to examine the link between service-focused human resource management (HRM) systems and firm performance. Internally, we examine employee competency as the ‘black box’ between service-focused HRM systems and firm performance. Externally, we examine the effect of the interplay of a service-focused strategy and service-focused HRM systems in predicting firm performance. We collect data from different sources (i.e. executives, human resource members, and line managers). Using a final sample included 2120 respondents from 175 firms in the service industry in Taiwan, the results show that customer service-focused employee competency transmitted 53% of the effect of customer service-focused HRM systems on firm performance. In addition, when a firm implements a less service-focused business strategy, service-focused HRM systems leads to significant improvement in firm performance. Implications for research are discussed.     

Well‐being‐oriented human resource management practices and employee performance in the Chinese banking sector: The role of social climate and resilience

Drawing upon positive psychology and a social relational perspective, this article examines the relationship between well‐being‐oriented human resource management (HRM) practices and employee performance. Our multilevel model examines relationships among collectively experienced well‐being‐oriented HRM practices, social climate (characterized by trust, cooperation, and shared codes and language that exist among individuals within the organization), employee resilience, and employee (in‐role) performance. Based on the two‐wave data obtained from 561 employees and their managers within 62 bank branches in 16 Chinese banks, our multilevel analyses provide support for our four hypotheses. First, we found a positive relationship between well‐being‐oriented HRM practices and social climate. Second, social climate mediated the relationship between well‐being‐oriented HRM practices and employee resilience. Third, we found a positive relationship between resilience and employee performance. Finally, employee resilience mediated the relationship between social climate and employee performance. This study is one of the first to unpack the social mechanisms through which well‐being‐oriented HRM practices increase development of resilience and subsequent employee performance at the workplace, namely through influencing group feelings of social climate.     

Clarifying the construct of human resource systems: Relating human resource management to employee performance

Strategic human resource management researchers have strongly advocated a system perspective and provided considerable evidence that certain systems of human resource practices have a significant impact on individual and organizational performance. Yet, challenges of understanding the construct of human resource systems still remain in the literature. Specifically, few efforts have been made to explicate the internal fit in human resource systems referring to how the practices in human resource systems work together. For the purpose of clarifying human resource systems construct, we review the components of human resource systems and delineate how the parts of human resource systems work together to influence employee performance. Theoretical and empirical implications for future research are also discussed.     

How and when matter: Exploring the interaction effects of high‐performance work systems,employee participation,and human capital on organizational innovation

Existing research on the relationship between high‐performance work systems (HPWS) and organizational innovation has paid insufficient attention to the boundary effects of employee participation and human capital. Bridging the human resource management (HRM) and employment relations literature, this study contributes to the contingency view of HRM and China‐specific research by investigating how human capital and employee participation, direct voice mechanism, and corporate governance participation jointly moderate the relationship between HPWS and organizational innovation. We test our three‐way interaction model using a sample of 108 firms and 1,250 employees in China. The results suggest that HPWS are positively associated with organizational innovation when employees with relatively less human capital are coupled with more direct voice mechanism or less corporate governance participation. In contrast, HPWS are negatively related to organizational innovation when employees possessing greater human capital are coupled with more direct voice mechanism. The theoretical and managerial implications and future research directions are discussed.