The effect of individual HR domains on financial performance: evidence from Belgian small businesses |
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| Authors: | Dries Faems Luc Sels Sophie De Winne Johan Maes |
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| Institution: | 1. Katholieke U., Leuven, Research Centre for Organisation Studies, Department of Applied Economics , Naamsestraat 69, 3000 , Leuven , Belgium Phone: +32 16 32 68 95 E-mail: Dries.Faems@econ.kuleuven.be Dries.Faems@econ.kuleuven.be;3. Katholieke U., Leuven, Organization Studies, Department of Applied Economics , Naamsestraat 69, 3000 , Leuven , Belgium Phone: +32 16 32 68 72 E-mail: Luc.Sels@econ.kuleuven.be;4. Leuven, Research Centre for Organisation Studies, Department of Applied Economics , Naamsestraat 69, 3000 Leuven, Belgium Phone: +32 16 32 68 94 E-mail: Sophie.DeWinne@econ.kuleuven.be;5. Leuven, Organization Studies, Department of Applied Economics , Naamsestraat 69, 3000 , Leuven , Belgium Phone: +32 16 32 68 68 E-mail: Johan.Maes@econ.kuleuven.be |
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| Abstract: | The contribution of this study, which assesses the influence of HRM on financial performance, is fourfold. (1) We assess the relative contribution of different HR domains to organizational performance. By controlling for the overall HRM intensity in all analyses we try to meet one of the most striking shortcomings of ‘single HR practice research’, namely the neglect of the potential simultaneity that might exist with other HR practices. (2) By studying small Belgian companies, we focus on the importance of HRM for small business management. (3) Relying on bankruptcy prediction models, we optimize the conceptualization of financial performance. (4) Using structural equation modelling, we try to capture the mediating effect of operational performance on the relationship between HRM and financial performance. The analyses indicate mixed results for different HR domains with regard to their impact on operational and financial performance. |
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| Keywords: | HRM-firm performance link operational performance financial performance small businesses |
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