Human resource management and performance

Abstract

The study of human resource management (HRM) has been invigorated by the promise that there is a best‐practice, high‐involvement management (HIM) that can guarantee superior organizational performance. None the less, there remain concerns that contingency theory still rules, that is, that the fit between the human resource systems and their context, and particularly the organization's business strategy, is all important and, thus, that HIM will only outperform other systems in certain circumstances. In the 1990s, there has been a spate of research that has sought to test whether HIM is indeed universally relevant. This paper reviews these studies. The paper first introduces the conceptual dimensions of the debate concerning HRM and performance. This shows that the issues go beyond a simple competition between universalism and contingency theory. There are more complicated hypotheses linking human resource practices beneath the surface of the recent literature. The second part of the paper overviews the studies in the light of these hypotheses, revealing that they present an uneven picture. Firstly, there are conceptual differences underlying the studies and, secondly, the results vary between them, and the effects of HIM vary between performance measures even in particular studies. Though a fair number of the studies claim to support universalism, their claims are not always unequivocally supported by their research evidence, and it is premature to conclude in its favour. If anything, there is more support for the ‘lean production’ argument that stresses the interaction effect between HIM and total quality management on performance.