Abstract

PurposeThis study aims to examine whether are there human resources (HR) practices that influence firm performance of companies operating in the Mediterranean region and, specifically, in Greece. Existing literature comes mostly from American studies, leaving a research gap what happens when HR practices are applied by companies in the Mediterranean region.Design/methodology/approachThe author reviewed the existent literature and examined six HR practices, which were initially proposed by Pfeffer. Using a self‐reported questionnaire, the author surveyed managers in Greece. The author used univariate and hierarchical multiple regression models to analyse the data.FindingsAnalysis of data provides overall support for all HR practices except of job security. Selective hiring and compensation policy were significant predictors for all performance variables.Research limitations/implicationsResults from studies on a specific industry may have limitations to generalising to other sectors of the economy. More research is necessary to examine HR practices not covered by this study.Practical implicationsThis study has practical implications particularly for small and medium enterprises (SMEs) that proliferate in Mediterranean countries. SMEs often find it difficult to see all the connections between antecedents (such as recruiting, compensating and training personnel) and consequences (such as turnover, financial performance). This study shows that there are high‐performance workplace practices that clearly pay off and thus, it is worthy investing on them.Originality/valueThis research is valuable to Mediterranean companies by highlighting the role of practices such as selective hiring and compensation policy in order to increase the overall firm performance.

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