Magazine article People & Strategy

A Meta-Analysis of Relationships between Human Resource Practices and Organizational Outcomes: Recent Academic Research on People and Strategy

Magazine article People & Strategy

A Meta-Analysis of Relationships between Human Resource Practices and Organizational Outcomes: Recent Academic Research on People and Strategy

Article excerpt

Scholarly work looking to empirically establish the relationship between HR practices and firm performance continues to advance. A recent study in Academy of Management Journal by Kaifeng Jiang, David Lepak, Jia Hu and Judith Baer makes a significant contribution to this body of work. The authors report the findings of a meta-analysis drawing upon 116 studies addressing the HR/performance linkage. Meta-Analysis refers to a set of statistical methods in which the results of multiple studies/samples are combined for analysis in search for underlying patterns and/or contrasts across the studies.

According to Jiang and associates, while there has been an extensive body of research linking HR practices to various aspects of firm performance, theoretical understanding remains fragmented. They noted three significant limitations of existing research in the field. "First," note the authors, "the theoretical logic underlying the mechanisms linking HRM and organizational outcomes remains fragmented." They elaborate as follows:

   Specifically, some researchers have
   adopted a behavioral perspective to
   suggest that HR practices affect organizational
   outcomes by influencing
   employee role behaviors; if employees
   act in ways that are consistent with
   company goals, performance should
   improve. Other researchers have
   adopted more of a human capital and
   resource-based perspective, focusing
   on the potential contributions of
   employees' competencies--that is
   their knowledge, skills and abilities.

"Interestingly," note Jiang and associates, "although employees contribute through both their competencies and their actions, researchers have typically focused on one perspective to understand how HR systems impact overall outcomes." Consequently, they call for research where multiple perspectives are considered simultaneously.

Second, the authors note that "it remains unclear as to how HRM relates to different organizational outcomes that range from very proximal (i.e. HR outcomes) to more distal (i.e. financial outcomes)." They continue, "Exploring the possible paths between HRM and financial outcomes will likely provide a more integrative model of how HR systems operate to impact a multitude of related and important outcomes."

Their third concern is with the assumption in existing research "that the components of HR systems have identical, as opposed to heterogeneous, impact on outcomes. The intent, therefore, of this study was to "develop an integrative model of the mechanisms mediating between HRM and organizational outcomes through a meta-analytic approach."

In conducting their meta-analysis, Jiang and associates sought to overcome some of these limitations. Hence, drawing upon the results of the 116 studies and 120 associated data sets, the authors conducted a more integrative and comprehensive study, incorporating both the psychological and macro (human capital and resource-based view of the firm) perspectives. Thus, as illustrated in the authors' Exhibit 1, below, the study examined relationships between three sets of constructs. The three on the left side of the exhibit represent three categories of HR practices: skill-enhancing HR practices, motivation-enhancing practices and opportunity-enhancing practices. These are described by the authors as follows:

   Skill-enhancing HR practices are
   designed to ensure appropriately
   skilled employees; they include comprehensive
   recruitment, rigorous
   selection, and extensive training.
   Motivation-enhancing HR practices
   are implemented to enhance employee
   motivation. Typical ones include developmental
   performance management,
   competitive compensation, incentives
   and rewards, extensive benefits, promotion
   and career development, and
   job security. Opportunity enhancing
   HR practices are designed to empower
   employees to use their skills and
   motivation to achieve organizational
   objectives. … 
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