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The HR-Firm Performance Relationship: Can it be in the Mind of the Beholder?

Abstract

This study examined whether respondents’ implicit theories of performance could impact their responses to surveys regarding HR practices and effectiveness. Senior Human Resource and Line Executives and MBA, graduate Engineering, and graduate HR students read scenarios of high and low performing firms and were asked to report on the prevalence of various HR practices and effectiveness of the HR function in each firm. Results indicated that all four groups of respondents held implicit theories that high performing firms were characterized by extensive HR practices and had highly effective HR functions relative to low performing firms. Subjects with substantial work experience reported greater differences between and high and low performing firms than did subjects with relatively little work experience. The implications of these results for research on the HR Practices – Firm Performance relationship are discussed

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