From shr to_op_ispa_250211

From Strategic HR to Organization PerformanceFrom Strategic Human Resources to Organization Performance

Ana Rita Oliveira 25 Fevereiro 2011

Authors:

Ana Rita Damas Oliveira

[email protected]

ISPA

Paulo Alexandre Guedes Lopes Henriques

[email protected]

ISEG

Teresa Cristina Clímaco Monteiro d´Oliveira

[email protected]

ISPA

Open the black-box...between HR and Performance

mailto:[email protected]



SHRM Literature Review

HR acting strategically/aligned with Business Strategy

Integrated approach linking HR to performance, (Paul & Anantharaman, 2003, Katou & Budhwar, 2010)

Most pressing theoretical and empirical challenge in SHRM literature, (Becker & Huselid, 2006)

State of the ArtWhat makes HR strategic?

Business Strategy HR Strategy



No single HRM practice has direct causal connection with organizational financial performance , (Paul & Anantharaman, 2003)

We need more theoretical work on the black-box between HR and performance and less on the black-box within the HR... (Becker & Huselid, 2006)

Strategy implementation as the central mediating variable between HR and Performance (Becker & Huselid, 2006)

State of the ArtIs there a direct impact between HR and performance? NO



90’s approach – literature dominated by Best-Practices approach

Replication approach = competitive advantage?... and integration approach? ... and business strategy approach?

Best-Fit Stream (Katou & Budhwar 2010)

“It is not the HR practices that determine the organization performance”… it is the impact of those practices on people that represent the source of sustainable advantage, (Messermith & Guthrie 2010).

State of the ArtWhy Best-Practices or Best-Fit Stream?



State of the ArtPeople as Strategic Assets – “VRIN” concept

VRIN resources - “valuable, rare, inimitable, and non substitutable”, (Barney, 1991 cited in Locket et al, 2009).

Strategic assets - “set of difficult to trade and imitate, scarce, appropriable, and specialized resources and capabilities that bestow the firm´s competitive advantage”, (Ami & Schoemaker, 1993 cited in Becker & Gerhart, 1996).

“The source of competitive advantage... is the people who are selected, and developed via SHRM practices... while presumably the human and social capital created by these HR practices”, (Messersmith & Guthrie ,2010)



State of the ArtHuman Capital created by SHRM practices??

RBV theory and Dynamic capabilities: resources difficult to imitate and with the ability to be renowable, ( Ambrosini & Bowman , 2009), (Locket et al, 2009) .

Human capital as an intangible resource, related with company performance outcomes … that refers to the skills and knowledge obtained through education, training and experience, (Sturman & Cheramie, 2008).

Major criticism in human capital area is the “preoccupation with individual-levels” instead of “short-term organizational effectiveness (e.g., return on investment, stock value) and long term organizational effectiveness (e.g. long-term growth, increased market share, innovation, social responsibility), (Avey et al, 2010).



Operational model and hypotheses

H4

H3H1

H2

Fig 1. Conceptualization for the HR-Performance link Source: Author

H1: SHRM indicators will be positivelyrelated with organizational commitmentvariables(company satisfaction, job

satisfaction and job retention).

H2: SHRM indicators will be positivelyrelated with employee levels ofpsychological capital

H3: Organizational commitmentvariables will be positively relatedwith organization performance

H4: Employee levels ofpsychological will be positivelyrelated with organizationperformance



Methodology/Case Study:

Since the study scope is the HR-Performance link…

“Case study design also involves decision about the time frame forresearch, particularly the period of time which the research will relate, andthe number of episodes of data collection required”, (Ritchie & Lewis, 2003).

A qualitative design needs to be flexible and allow changes during thephenomenon understudy takes place, and the challenge “to figure out whichdesign and methods are most appropriate, productive and useful in a givensituation”, (Pattou, 2002).

The selection of the case method considers the investigationcharacteristics.



We want to challenge the study design by using longitudinaldata, in order to draw relationship conclusions.

Research about HR-Performance relationship has been “paidinadequate attention to temporal precedence and/or alternativeexplanations”, (Wright et al, 2005).

Most of the studies are post-predictive and few studies consider apredictive design, where “HR practices assessed at one point in time wererelated to subsequent firm performance”, (Huselid, 1995; Youndt et al,1996; and Youndt & Snell cited in Wright at , 2005).

Study Design: HR measures precendent to organization performance:



Data Collection timeframe

SHRM indicatorsCompanyPerformanceOrganizational CommitmentPsychological Capital

SHRM indicatorsCompanyPerformanceOrganizationalCommitment

SHRM indicatorsCompanyPerformanceOrganizational CommitmentPsychological Capital

StrategyImplementation

StrategyImplementation

Year 1 Year 2Year 3

Source: Author

The data collection will be done during a 3 years period (3 business cycles),before and after SHRM implementation, and, at the same time trackingSHRM indicators, company performance, organizational commitment andpshycological capital indicators.



Company Performance: Financial Measures, such as, Gross Margin, Operational Costs, EBITDA, Market Share (depending on company business)

Strategic HRM: Company HR records: performance records, training participation, competencies assessment, bonus and merit increases: as indicators of quality and effectiveness of HR practices and work related outcomes (Ulrich, 1997; Luthans & Avolio, 2007; Youseef & Luthans, 2007)

Organizational Commitment Variables: Company satisfaction, Job Satisfaction and Job Retention from employee survey data(Ulrich, 1997).

Psychological Capital: assessed through PsyCap questionnaire (Luthanset al, 2007)

Measures:



Expected results and contributions

Deeper understanding of the variables that affect the process stream, starting with HR practices and their impact on people and the consequent psychological capital creation that impacts business performance.

Contribute to increase knowledge in one of the major criticism that presently exists concerning the relationship between human capital and performance (lack of relationship with short-term and long term performance outcomes)

Contribute to human resources improvement, allowing them to be prepared to face major challenges in the near future, having in consideration the

present economic constraints of the Portuguese economy.

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