Human Resource Management and Organisational Performance: The Mediating Role of Social Exchange

Abstract

This study seeks to explore the impact of specific set of HRM practice on organisational performance in a Middle Eastern emerging market. It aims to examine the mediating role of social exchange within the healthcare sector in Jordan, which is presently reeling under pressure from the refugee crisis from Syria and neighbouring countries. Both, HR and hospital managers were targeted in all private and public hospitals through two separate questionnaires. We find, as predicted, that recruitment, training, and internal promoting from within have a positive and significant effect on performance. However, contrary to expectations, we found performance appraisal and rewards and benefits not linked with performance. Notably, whilst researchers argue that a better theoretical understanding of the mechanisms describing the relationship between HRM and performance should be developed, the results indicate that social exchange can play an essential role in explaining the HRM‐performance indirect relationship – a result that partly unlocks the elements of so‐called ‘black box’ in HR research. The theoretical and applied implications of these findings are explored.