HRM Systems, Firm Performance and the Well-being Paradox

Abstract

In this study we attempt to solve the well-being paradox as existing empirical evidence appears conflicted, that is, sometimes supporting the mutual gains model (employers and employees both benefiting from human resource management (HRM) systems) but at others supporting the critical model (employers, not employees, benefiting from HRM systems). Based on our analysis, four main findings were established. First, the three bundles of HR practices constituting HRM systems (employee skills and organizational structures, employee motivation, and organization commitment) were positively associated with firm performance, and this association occurred through work intensification. Second, at low levels of implementation, the three bundles of HR practices were negatively associated with employee well-being (high levels of work intensification and anxiety, and low levels of comfort). At high levels, however, the three bundles of HR practices were positively related to well-being. Third, the three bundles of HR practices were differentially related to well-being and firm performance. Fourth, positive well-being, measured by job satisfaction and comfort, and negative well-being, measured by work intensification and anxiety, were governed by the principle of positive presence and the absence of negative effect; as positive well-being increases, negative well-being decreases. Following this, research implications and future directions are discussed.