Abstract
Way, Tracey, Fay, Wright, Snell, Chang, and Gong (2012) proposed that HR flexibility is firm-level capability which is instrumental in fostering the capacity of firms to be responsive to changes in competitive market demands and successful in dynamic industries. Although, scholars (e.g., Way et al., 2012; Wright & Snell, 1998) have proposed that the nature of the HR flexibility—firm performance relationship is contingent upon (moderated by) the dynamicity of a firm’s industry, there are no empirical studies published to date which have investigated the proposed contingent nature of the HR flexibility—firm performance relationship. Hence in this study, using hierarchical linear modeling and data obtained from four distinct sources for 153 for-profit, U.S. firms with 100 or more employees nested in 25 NAICS industries we investigate the proposed cross-level moderating effect of industry dynamism on the HR flexibility—firm performance relationship. Results indicate that the contingent nature of the relationship between HR flexibility and firm performance was as we hypothesized, with the HR flexibility—firm performance relationship positive when industry dynamism was high and negative when industry dynamism was low. Implications and limitations of this current study as well as avenues for future research are discussed.
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