A Meta-Analysis of Relationships between Human Resource Practices and Organizational Outcomes: Recent Academic Research on People and Strategy
Hanks, Steven H., People & Strategy
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. …