Fits in strategic human resource management and methodological challenge: empirical evidence of influence of empowerment and compensation practices on human resource performance in Canadian firms

Abstract

This study attempts to answer three questions: 1) How does the methodological approach used to measure fit among practices influence the results obtained? 2) To what extent do bundles of empowerment and compensation practices individually influence human resource outcomes? and 3) Does the fit between these bundles of practices increase the prediction of the level of discretionary effort, turnover and productivity? Following a two-wave survey strategy, statistical analyses performed on 128 Canadian companies suggest that the statistical methods used to measure fit are not interchangeable. The findings reveal that the use of an extensive relational empowerment strategy is significantly and negatively related to voluntary turnover when accompanied by a compensation program that rewards performance. In contrast, a compensation strategy that supports good working conditions or the use of financial incentives seems sufficient to influence human resources performance. Nonetheless, the results militate in favour of adopting a configurational approach with empirical deviation profile to fit to better understand the complexity of the equifinality effect of HR strategies. Lastly, the polynomial regression results question the linearity assumption of the relationship between empowerment, working conditions and productivity.