Abstract

This study analyzes the effect of social and economic HRM systems, which are based on different philosophical perspectives and guiding principles, on the employee’s attitudes and behavior and operational capabilities. The panel survey data from 2007 to 2107 of the Human Capital Corporate Panel(HCCP), which was conducted by the Korea Research Institute for Vocational Education and Training(KRIVET), was used to examine the effects of the two contrasting HRM systems. This paper adopted the random effects panel regression model and response surface analysis to examine the congruence effects between the two HRM systems. First, the results showed that the social HRM system has a positive effect on the employee’s attitudes and behavior and operational capabilities, but the economic HRM system had independent and additive effects on the employee’s attitudes and behavior and operational capabilities. Second, this study found evidence that the effect of social HRM systems on the attitudes and behavior and operational capabilities is greater than that of economic HRM systems. Third, no congruence effects have been found between the social and economic HRM systems. That is, this paper confirmed that the effects of the social and economic HRM systems where the levels of the two HRM systems were matched did not always have a greater impact on organizational outcome than the effects where the either HRM system's level is higher or lower. Fourth, this research demonstrated that the positive effects on organizational outcome are higher where the both HRM system levels are higher than where the both social and economic HRM system levels are lower. That is, the social HRM system increases the attitudes and behaviors of employees and operational capabilities by improving their skills, facilitating motivation, and providing new opportunities. On the other hand, the economic HRM system, which is based on individual incentives, competition among employees, and hiring star talents showed clear limits in boosting organizational outcomes. The results that the social HRM systems are more effective than economic HRM systems and the two HRM system ar not congruent provide significant implications for firms to build evidence-based HRM systems from a theoretical and practical point of view.

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