Relationship between strategic human resource management and firm performance

Abstract

The objective of this study is to argue transition from human resource management (HRM) to strategic human resource management (SHRM). In addition, this study also discusses the theory of SHRM. The research methodology of this study is based on arguments from SHRM literature. The significant of paper is a discussion of SHRM theory. Key terms are personnel, employee, and capital in management of human resources by firms. Practitioners call human resources as personnel in personnel management (PM); and call human resources as an employee in HRM. Practitioners do not clarify the term yet for human resources in SHRM. This paper suggests “capital” term for human resources in SHRM. Secondly, return on investment (ROI) of HRM might be positive organizational attitude and behaviours. HRM makes investment to employees, and ROI of HRM is important to SHRM because positive attitude and behaviours increase individual performance of employees. Thirdly, there is a triangular relation in SHRM theory. This is named as trigonometry of SHRM. There are dependent variables, independent variables, and moderators in this triangular. Finally, SHRM can be described with employee performance and firm performance relationship. In this relation, HRM practices lead to increased individual performance, and individual performance increases performance of business departments such as logistics, supply, finance, marketing, production etc. and performance of business departments has an impact on firm performance. In this SHRM model, HRM has an impact on firm performance through individual performance and business departments. All are described is SHRM theory in this study. For HRM case, HRM has two purposes in firm management. Those purposes are performance and recruitment. HRM aims to increase individual performance of employees. If HRM aims to increase firm performance through individual performance, it is description of SHRM. HRM has an impact on individual performance via HRM practices. HRM practices are keys to increase individual performance. Because employees implement business processes in firm management. Those processes are such as production, marketing, stock, supply, logistics, finance and others. Individual performance of employees increases performance of those business processes in firm management. Therefore, it is important to increase individual performance through HRM practices. This is a HRM theory in this study. Moreover, HRM does recruitment of employees for functioning these business processes. Because all needs human resources to effectively implement processes in firms.

Core competence has become the prevailing term in strategic management (SM) and human resource management (HRM) literature. However, the exact meaning of the “core” term has been ambiguous to researchers, educators, and practitioners. This article addresses the interpretations of “core” in SM and HRM literature and adopts the Strategic Human Resource Management (SHRM) perspective to redefine core competence and human competence as organizational and individual capabilities that create organizational competitive advantage. We build a conceptual framework to show the relationship between core competence and human competence, and provide business and management implications. Key words: Core competence, human competence, competitive advantage.

Since the early 1990s, human resource management (HRM) scholars have sought to specify the link between high performing HRM practices and both individual and firm performance (Becker and Huselid, 2006; Huselid, 1995). This strategic HRM (SHRM) literature has found that organizations practicing SHRM not only increase performance but also decrease turnover (Arthur, 1994; Huselid, 1995; Lepak and Snell, 2002). At the organizational level, the dollars saved and earned through reduced turnover and increased productivity demonstrate the utility of SHRM systems (Ichniowski et al., 1997). When organizations utilize SHRM, integrating HRM systems, and aligning HRM systems with organizational (Huselid, 1995), they place a premium on developing cutting edge practices that retain employees with the best skills and highest levels of motivation (Barney, 1991). Arthur outlines differences between SHRM perspectives, finding that SHRM control systems, which are designed to enforce employee compliance with specified rules and procedures (1994: 671), lead to increased turnover and decreased performance. On the other hand, SHRM systems, which shape desired behaviors and attitudes by forging psychological links between organizational and goals (Arthur, 1994: 671), result in decreased turnover and increased performance. As further empirical research has bolstered these findings (i.e., Huselid, 1995; Ichniowski et al., 1997; Lepak and Snell, 2002), it becomes increasingly important to understand how SHRM effectiveness enhances the critical psychological links between employees and organizations. Moreover, several SHRM researchers have called for explicit examinations of these psychological links not only at the organization level but at the individual level (Becker and Huselid, 2006; Gerhart, 2005). One individual-level factor that can help to explain the psychological impact of SHRM practices is job embeddedness (JE), which Mitchell, Holtom, Lee, Sablynski, and Erez (2001b) validate and use to explain how employees become psychologically and socially enmeshed within the organization and community in which the organization operates. Hailed as an anti-withdrawal theory (Holtom et al., 2006; Mitchell et al., 2001b), JE describes the psychological forces that act like a net or a web in which an individual can become stuck (Mitchell et al., 2001b: 1104); moreover, the process of becoming embedded influences turnover intentions that lead to voluntary turnover (Allen, 2006). Importantly, JE explains unique variability of these important outcomes beyond the effects of job satisfaction and organizational commitment (Mitchell et al., 200lb; Lee et al., 2004). However, because JE has emerged as the most recent construct to explain turnover decisions, researchers have much to discover about the full potential of JE as an important variable in HRM. That is, HRM scholars have yet to determine how SHRM effectiveness can build JE as a means to develop the critical psychological links between employees and organizations. Although a direct relationship between H RM practices and J E appeals intuitively to many HRM scholars (Allen, 2006), proponents of social exchange theory (Blau, 1964) consistently demonstrate the important role that individual-to-individual interactions play in human behavior at work (Cropanzano and Mitchell, 2005). In terms of organizations, researchers consistently find that leader-member exchange (LMX) relationships more proximally predict turnover intentions (Gerstner and Day, 1997) than does support from the organization (e.g., HRM), which tends to predict job satisfaction and commitment (Settoon et al., 1996). In terms of understanding how HRM effectiveness influences JE, the inclusion of direct LMX relationships should either enhance or inhibit the effectiveness of an organization's HRM processes to capitalize on the benefits of JE. …

At present, there are three modes studying on the relationship between strategic human resource management and organizational performance. These modes are universality mode, form mode and contingency mode. The paper firstly analyses on the characteristics of these three modes. And then, it infers the need for the use of contingency mode studying on the relationship between strategic human resource management and organizational performance. Secondly, it measures the standard of the organizational performance. At last, the paper takes the qualitative research method to study on the relationship between strategic human resource management and organizational performance, what factors influence on the relationship between the two, and the mediating variables and how to influence the process. It tries to provide a basis for subsequent research.

Very little systematic research today has examined synergistic relationships of human capital (HC), strategic human resource management (SHRM) and human resource management (HRM) in relation to the development, utilization, and dissemination of knowledge and learning capabilities in organizations. Findings from a series of in-depth qualitative interviews with 35 nonprofit executives from 22 Australian nonprofit organizations revealed that synergistic relationships of HC, SHRM and HRM created value that was larger than the total sum of all three concepts, and that relationships acted as catalysts in developing, utilizing and diffusing organizational knowledge and learning capabilities. The paper helps to build a nascent body of literature arguing that synergistic relationships exist among the three salient concepts and resources should be invested in the three concepts not only separately, but also synergistically. Also, it assists to clarify the three seemingly very similar and yet different concepts. The paper is considered as a starting point and serves as a milestone for understanding the significance of synergistic relationships of the three concepts in nonprofit organizations. The increased awareness of the synergistic relationships likely generates further research both within and outside the nonprofit sector. Research limitations and future research directions will be discussed.

The purpose of the article is to generalize theoretical approaches to the concepts of “strategic management” and “human resources”. Methodology of research. Generalization of the system of concepts and categories, fundamental provisions of modern economic theory, graphic, tabular methods, methods of analysis and synthesis. Findings. The article identifies theoretical approaches to the definition of “human resources”, which allowed to define it as a set of quantitative and qualitative characteristics of the enterprise (organization), the effective indicator of which is personal professional development, efficiency and competitiveness of the enterprise as a whole. The quality of human resources in the context of ensuring the competitiveness of the enterprise is studied, among which the main ones are determined: value, individuality, impossibility of copying, talent and motivation. The essence of the concept of “strategic human resource management”, which arises when the enterprise is aimed at increasing competitiveness through the unique competencies of staff. The algorithm of formation of strategic management of human resources which provides external factors, challenges for the enterprises, reaction of the enterprises, strategic management of the enterprise which consists in strategic management of human resources, formation of organizational culture and corporate social responsibility is considered. Practical value. The purpose, subject, object and functions of strategic human resources management are substantiated. Among the general functions it is suggested to use planning, organization and coordination, control, communication (communication), evaluation, motivation. The specific functions of strategic human resource management are proposed to be divided into: prognostic, analytical, target orientation, resource provision, social. Keywords: human resources, strategic management, strategic human resources management, competencies. REFERENCES 1. Levycz`ka, O. (2010). Sutnist`, genezys ta evolyuciya ponyattya “lyuds`ki resursy”: systemno-konceptual`nyj pidxid [The essence, genesis and evolution of the concept of “human resources”: a system-conceptual approach]. Ukrayina: aspekty` praci – Ukraine: aspects of work, 1, 37–42 [in Ukrainian]. 2. Avtonomov, B. C. (1998). Model` cheloveka v эkonomicheskoj nauke [The human model in economics]. Saint Petersburg : School of Economics [in Russian]. 3. Heathfield, S. (2016). What Is a Human Resource? Retrieved from https://www.thebalance.com/what-is-a-human-resource-1918144 (accessed 28 November 2020) [in English]. 4. Raznodezhina, E. N. (2011). Chelovecheskiye resursy: ikh rol' i znacheniye [Human resources: their role and significance]. Upravleniye ekonomicheskimi sistemami: elektronnyy nauchnyy zhurnal – Management of economic systems: electronic scientific journal, 1, 43–49 [in Russian]. 5. Bogynya, D. P. & Grishnova, O. A. (2000). Osnovy ekonomiky praci [Fundamentals of labor economics]. Kyiv : Znannya-Pres [in Ukrainian]. 6. Shhekin, G. V. (2000). Social`naya teoriiya i kadrovaya politika [Social theory and personnel policy]. Kyiv : MAUP [in Ukrainian]. 7. Pochynok, N. (2010). Lyuds`ki resursy v oblikovij teoriyi ta praktyci [Human resources in accounting theory and practice]. Ekonomichnyy analiz – Economic analysis, 6, 141–144 [in Ukrainian]. 8. Bol`shoj encyklopedicheskij slovar’[Large encyclopedic dictionary]. Retrieved from http://dic.academic.ru/misc/enc3p.nsf/ListW (accessed 28 November 2020) [in Russian]. 9. Schendel, D. E. & Hatter, K. J. (1972). Business Policy or Strategic Management: A Broader View for an Emerging Discipline. Academy of Management Proceeding, August, P. 4 [in English]. 10. Higgins, J. M. (1983). Organizational Policy and strategic Management: Text and Cases. Chicago: The Dryden Press [in English]. 11. Pearce, J. A. & Robinson, R. B. (1985). Strategic Management. Homewood, III: Richard D. Irvin [in English]. 12. Petrova, I. L. (2013). Strategichne upravlinnya lyuds`kymy resursamy [Strategic human resource management]. Kyiv : KNEU [in Ukrainian]. Published: 2021-05-27

Strategic human resource management and managerial practices directly link with the service design and delivery process. Recent studies and the based theories have discussed the interconnection of such human resource perspectives and service performance highlighting empirical and practice significance. However, studies found in the scope of strategic human resource management practices for service performance still suggest the need for further studies since service performance and strategic human resource management practices are transforming with different industrial dynamics. Having said, this paper also addresses the importance of reviewing strategic human resource management perspectives with the service performance by explaining related variables and concepts. Alongside, service performance, service climate, front line employee performance and service quality were reviewed to explain their interconnections. It has followed comprehensive literature review as the main research tool to produce a conceptual review. Alongside, journal articles, book chapters and case studies were mainly associated to explain the concepts, variables and key inputs of relevant theories as well to support for the conceptual review and discussions. This paper includes a discussion to navigate future research works by highlighting how service performance, particularly service quality, is influenced by the relevant variables found within the scope of strategic human resource management. In addition, the notion of internal marketing has also been reviewed and discussed to support the main insights presented in this paper. It has explained the relevant variables for the notions encouraging future researchers to steer empirical investigations. This study concludes the insights of new research avenues highlighting modern transformations that took place in the human resource management and market dynamics within the service sector. Additionally, the importance of revisiting the fundamental theories related to strategic human resource management, and the service management aspects were also posited as a conclusion remark.

Human resource management is to attract and use the best services and provide services, benefits, training and development for success in an organization. However, strategic human management takes these issues one step further with the goals of other departments and the goals of the organization. Human departments that practice strategic management also ensure that all of their resources are aligned with the mission, vision, values, and organizations of which they are a part. The present research has been conducted by examining the effect of strategic human resources management on job performance with the mediating role of Islamic work ethics of Jawzjan University employees. The method of this research is descriptive-survey and practical in terms of the nature of the goal. The study population of this research was formed by all the administrative staff of Jawzjan University in the number of 78 people in 1402, and 65 people were selected using the Cochran sample size formula using the relative random sampling method. To measure the variables of the research, questionnaires of strategic human resources management (Edavar et al., 2006), job performance (Hersey and Goldsmith, 1890) and Islamic work ethics (Yosef, 2001) have been used. The data were analyzed using the structural equation model. The results showed that there was a direct and meaningful relationship between the strategic management of human resources and the job performance of Jawzjan University employees and Islamic work ethics as an effective mediating variable. According to the findings of the research, it can be concluded that the Islamic work ethic in the employees of Jawzjan University plays an important role in improving the effect of strategic management of human resources on their job performance.

Purpose The optimization of product innovation performance (PIP) is paramount to achieving sustained profitability in the face of current organizational challenges. In this study, as researchers, the authors investigate within the context of Saudi Arabian manufacturing firms’ entrepreneurial orientation (EO) direct impact on PIP and its indirect influence mediated by strategic human resource management (SHRM) and technology capability (TC). Design/methodology/approach This co-relational study used cross-sectional data. The authors collected the data from the manufacturing firms’ top management team, chief executive officers and other staff members, including human resource (HR) managers and chief information officers. This study’s conclusions are based on 307 cases. Findings Using SmartPLS4, this study’s findings demonstrate that EO exerts a positive and significant impact on SHRM, PIP and TC. SHRM has a positive and significant effect on PIP. In addition, TC is a positive and significant predictor of SHRM but not PIP. Turning to the mediating impacts, SHRM plays a positive mediating role between TC and PIP and a negative role between EO and PIP. Finally, TC reinforces the negative connections between EO and PIP. Practical implications This study's insights offer valuable guidance to firms and policymakers. They underscore the importance of investing in TC to reinforce SHRM and drive innovation. Moreover, these findings emphasize the need for firms to adopt a dynamic approach that comprises continuous monitoring, adaptation and tailored HR strategies supported by performance metrics. This proactive stance ensures that innovation remains a consistent and impactful element of their long-term strategy. Originality/value This study stands out by addressing existing gaps through its innovative integration of EO, SHRM, TC and PIP within a unified framework. It does so within the specific context of Saudi Arabian manufacturing firms and provides a unique and contextually relevant perspective that contributes to the knowledge body of the area.

Retracted.

This study sought to verify strategic human resources management’s influence on hotel performance by analysing data on managers of hotels located in Grande Florianopolis, Brazil. Bibliographical research was conducted to provide a theoretical framework to support the analysis, and a descriptive methodology approach based on the positivist paradigm was applied. The proposed model was subjected to exploratory factor analysis, confirmatory factor analysis and structural equation modelling. The sample consisted of 70 hotel managers, and the data were collected with a closed-ended questionnaire. The results show that, of the 32 variables studied, 13 variables are connected to high performance in medium-sized hotels in Grande Florianopolis. In addition, the analyses confirmed the validity of the proposed model, in which strategic human resources management is directly related to hotel performance. The findings include that employee training and development, as well as workplace structuring, are strategic human resources management practices essential to achieving higher performance.

Previous research has investigated the relationships between intellectual capital (IC) and human resource management (HRM). Others have described the link between IC and strategic initiatives in an organization including strategic human resource management (SHRM). However, little systematic work has been done to develop a holistic overview of connections between the three concepts. Through an analysis of the recent IC literature and the literature that discusses IC, SHRM and HRM, this paper argues that not only are the three concepts closely connected, but also IC should play a key role in SHRM processes and HRM practices in organizations. The strategic connections also demonstrate that IC can be conceptualized as a holistic partner to both SHRM and HRM; thus, adding strong support for the need to measure IC accurately. A theoretical framework is proposed to illustrate IC, SHRM and HRM connections. Finally, the paper suggests directions for future research.

This paper aims to develop a theoretical framework on the link between Strategic Human Resource Management (SHRM) and firm performance, with special attention given to the banking industry. This paper adopts the systematic review method to review the existing frameworks and constructs a new one for the banking sector. Amongst the major theories considered include the resource-based view and meta-theory to delineate the relationships between SHRM practices and bank performance. The review suggests fourteen SHRM practices that are relevant to the banking sector. They include recruitment and selection, training and development, work design, performance appraisal, compensation and benefits, promotion, encouragement, high commitment, high performance, strategic communication, participation in management, grievance handling, facilitating teamwork and  enhancing quality. These practices are argued to be especially relevant to bank performance.The development of knowledge on SHRM has been focusing mainly on traditional manufacturing organisations, with little attention rendered to service-based organisations. A better understanding of how the SHRM practices relate to the performance of the banking sector allows banks to compete in this competitive environment through appropriate utilisation of the practices. The results also provide a guide to banking practitioners in evaluating their performance from the lens of the SHRM practices. This is amongst the first study that examines the SHRM practices and their relations to performance of banks. An empiricalanalysis will further provide support to which practices that the banking industry should focus on to drive performance.

This article describes the concept of strategic human resource management (SHRM); the concept of electronic human resource management (e-HRM); the importance of SHRM in modern organizations; and the current trends of organizational learning and knowledge management (KM) in modern organizations. SHRM is the strategic practice of attracting, developing, rewarding, and retaining employees with the important goal of increasing various benefits to both employees as individuals and organization as a whole. SHRM strategically utilizes organizational resources and talent within HR functions to make organizations more effective in the modern workforce. Organizational learning and KM allow for organizational employees to share knowledge and learn exactly what is relevant to their specific tasks toward encouraging human capital and knowledge creation. The article argues that promoting SHRM, organizational learning, and KM has the potential to enhance organizational performance and achieve strategic goals in modern organizations.