The Relationship Between HR Practices and Firm Performance: Examining Causal Order

Significant research attention has been devoted to examining the relationship between HR practices and firm performance, and the research support has assumed HR as the causal variable. Using data from 45 business units (with 62 data points), this study examines how measures of HR practices correlate with past, concurrent, and future operational performance measures. The results indicate that correlations with performance measures at all three times are both high and invariant, and that controlling for past or concurrent performance virtually eliminates the correlation of HR with future performance. Implications are discussed

What difference does ("good") HRM make?

The importance of human resources management (HRM) to the success or failure of health system performance has, until recently, been generally overlooked. In recent years it has been increasingly recognised that getting HR policy and management "right" has to be at the core of any sustainable solution to health system performance. In comparison to the evidence base on health care reform-related issues of health system finance and appropriate purchaser/provider incentive structures, there is very limited information on the HRM dimension or its impact. Despite the limited, but growing, evidence base on the impact of HRM on organisational performance in other sectors, there have been relatively few attempts to assess the implications of this evidence for the health sector. This paper examines this broader evidence base on HRM in other sectors and examines some of the underlying issues related to "good" HRM in the health sector. The paper considers how human resource management (HRM) has been defined and evaluated in other sectors. Essentially there are two sub-themes: how have HRM interventions been defined? and how have the effects of these interventions been measured in order to identify which interventions are most effective? In other words, what is "good" HRM? The paper argues that it is not only the organisational context that differentiates the health sector from many other sectors, in terms of HRM. Many of the measures of organisational performance are also unique. "Performance" in the health sector can be fully assessed only by means of indicators that are sector-specific. These can focus on measures of clinical activity or workload (e.g. staff per occupied bed, or patient acuity measures), on measures of output (e.g. number of patients treated) or, less frequently, on measures of outcome (e.g. mortality rates or rate of post-surgery complications). The paper also stresses the need for a "fit" between the HRM approach and the organisational characteristics, context and priorities, and for recognition that so-called "bundles" of linked and coordinated HRM interventions will be more likely to achieve sustained improvements in organisational performance than single or uncoordinated interventions

Human Resources and the Resource Based View of the Firm

The resource-based view (RBV) of the firm has influenced the field of strategic human resource management (SHRM) in a number of ways. This paper explores the impact of the RBV on the theoretical and empirical development of SHRM. It explores how the fields of strategy and SHRM are beginning to converge around a number of issues, and proposes a number of implications of this convergence

Do organizational climate and competitive strategy moderate the relationship between human resource management and productivity?

This study examined whether the effectiveness of human resource management (HRM)practices is contingent on organizational climate and competitive strategy The concepts of internol and external fit suggest that the positive relationship between HRM and subsequent productivity will be stronger for firms with a positive organizational climate and for firms using differentiation strategies. Resource allocation theories of motivation, on the other hand, predict that the relationship between HRM and productivity will be stronger for firms with a poor climate because employees working in these firms should have the greatest amount of spare capacity. The results supported the resource allocation argument

Flexibility and Fairness in Liberal Market Economies: The Comparative Impact of the Legal Environment and High Performance Work Systems

This paper compares management flexibility in employment decision-making in the United States and Canada through a cross-national survey of organizations in representative jurisdictions in each country, Pennsylvania and Ontario respectively, that investigates the impact of differences in their legal environments. The results indicate that, compared to their Ontario counterparts, organizations in Pennsylvania have a higher degree of flexibility in employment outcomes, such as higher dismissal and discipline rates, yet do not experience any greater flexibility or simplicity in management hiring and firing decisions. One explanation for this result may lie in the finding that organizations in Pennsylvania experience greater legal pressures on decision making, reflecting the generally more intense conflict in the employment law system in the United States. By contrast, high performance work systems, which some have looked to as a possible management-driven mechanism for enhancing fairness in employment, had more modest effects

SME Performance, Innovation and Networking - Evidence on Complementarities for a Local Economic System

The paper addresses the relevancy of networking activities and R&D as main drivers of productivity performance and ouput innovation, for small and medium enterprises (SME) playing in a local economic system. Given the intangible nature of many techno organisational innovation and networking strategies, original recent survey data for manufacturing and services are exploited. The aim is to provide new evidence on the complementarity relationships concerning different networking activities and R&D in a local SME oriented system in Northern Italy. We first introduce a methodological framework to empirically test complementarity among R&D and networking, in a discrete setting. Secondly, we consequently present empirical evidence on productivity drivers and on complementarity between R&D and networking strategies, with respect to firm productivity and process/product output innovation. R&D is a main driver of innovation and productivity, even without networking. This may signify, in association with the evidence on complementarity, that firm expenditures on R&D are a primary driver for performance. The complementarity with networking is a consequential step. Networking by itself cannot thus play a role in stimulating productivity and innovation. It can be a complementary factor in situations where cooperation and networking are needed to achieve economies of scale and/or to merge and integrate diverse skills, technologies and competencies. This is compatible with a framework where networking is the public good part of an impure public good wherein R&D plays the part of the private-led driving force towards structural break from the business as usual scenario. Managers and policy makers should be aware that in order to exploit asset complementarity, possibly transformed into competitive advantages, both R&D and networking are to be sustained and favoured. our evidence suggests that R&D may be a single main driver of performance. Since R&D expenditures are associated with firm size, a policy sustain is to be directed towards firm enlargement. After a certain threshold firms have the force to increase expenditures. The size effect is nevertheless non monotonous. Then, but not least important, for the majority of firms still remaining under a critical size threshold, policy incentives should be directed to R&D in connection with networking, through which a virtuous circle may arise. It is worth noting that it is not networking as such the main engine. Networking elements are crucially linked to innovation dynamics; it is nevertheless innovation that explains and drives networking, and not the often claimed mere existence of local spillovers or of a civic associative culture in the territory. Such public good factors exist but are likely to evolve with and be sustained by firm innovative dynamics

Human Resource Flexibility as a Mediating Variable Between High Performance Work Systems and Performance

Much of the human resource management literature has demonstrated the impact of high performance work systems (HPWS) on organizational performance. A new generation of studies is emerging in this literature that recommends the inclusion of mediating variables between HPWS and organizational performance. The increasing rate of dynamism in competitive environments suggests that measures of employee adaptability should be included as a mechanism that may explain the relevance of HPWS to firm competitiveness. On a sample of 226 Spanish firms, the study’s results confirm that HPWS influences performance through its impact on the firm’s human resource (HR) flexibility

Relationship between employee involvement and lean manufacturing and its effect on performance in a rigid continuous process industry

Relationship between employee involvement and lean manufacturing and its effect on performance in a rigid continuous process industry DOI: 10.1080/00207543.2014.975852 Juan A. Marin-Garciaa* & Tomas Bonaviab Received: 1 Aug 2013 Accepted: 30 Sep 2014 Published online: 04 Nov 2014 This research aims to empirically test the effect of employee involvement on lean manufacturing (LM), and the effect of LM on production outcomes. Employee involvement is operationalised through four related variables: empowerment, training, contingent remuneration and communication. The effects are tested by recording management perceptions in a different industrial sector from those usually studied in previous research ceramic manufacturers, a highly competitive and internationally successful sector. We obtained data from 101 ceramic tile plants (64% of response rate) in the Valencia region of Spain. This approach is developed using a statistical method called partial least squares. All paths are significant except for contingent remuneration; specifically, relationships were found between empowerment, training, communication and LM, and between LM and performance.This paper has been written with financial support from the Project "Path Dependence and decision-making for selecting LM tools and practices" (PAID-06-12-SP20120717) of the Universitat Politecnica de Valencia.Marín García, JA.; Bonavía Martín, T. (2015). Relationship between employee involvement and lean manufacturing and its effect on performance in a rigid continuous process industry. International Journal of Production Research. 53(11):3260-3275. https://doi.org/10.1080/00207543.2014.975852S32603275531

Human Resource Management in India: Performance and Complementarity

This is a study of the relationship between HR practices and organisational performance of large-scale enterprises in India. The main survey yielded 252 usable replies from the HR directors. Results show that mutually supportive sets of HR practices do not yield disproportionately superior outcomes than limited and focused individual practices. This highlights the limitations of strategic HRM in an Indian context. It seems there is little immediate benefit in developing sophisticated mutually supporting HR systems if particular firm or regionally relevant interventions yield clear benefits on their own right. These results highlight the limitations in national level institutions made for a general lack of complementarities, and/or that firms do not want to take the risk of over-relying on a specific institutional feature that may be subject to change. We also find that innovative firms are not in any way more likely to adopt best HR practices to a greater degree than their less innovative counterparts. India’s weak and uneven institutional coverage may open up more opportunities for HR innovation, but the lack of systemic support means that there are fewer opportunities for the latter to realise its fullest potential

High-Performance Work Systems and Organizational Performance in Emerging Economies: Evidence from MNEs in Turkey

This study examines the association between the usage of high-performance work systems (HPWS) by subsidiaries of multinational enterprises (MNEs) in Turkey and employee and subsidiary level outcomes. The study is based on a survey of 148 MNE subsidiaries operating in Turkey. The results show that the usage of HPWS has a significant positive impact on employee effectiveness. However, their impact on employee skills and development, and organizational financial performance are far less clear. Our findings highlight the extent to which HWPS need to be adapted to take account of context-specific institutional realities. © 2014 Springer-Verlag Berlin Heidelberg