Strategic human resource management and its linkage with HRM effectiveness and organizational performance: evidence from India

Abstract

The human resource management (HRM), once responsible for record keeping and maintenance, has evolved into a strategic partner. This has led to the emergence of the concept of strategic human resource management (SHRM). Despite the increasing importance of SHRM, there is still a paucity of empirical evidences from the emerging nations. Keeping in mind the fact that India is one of the fastest growing markets today, a need was felt to explore the SHRM terrain in the Indian context. On the basis of an extensive literature review, four types of fit vis-à-vis SHRM were identified. Collectively called the SHRM Inventory, these were empirically tested to establish unidimensionality, reliability, and validity. Thereafter, the four types of fit were linked to effectiveness of HRM function and organizational performance using Structural Equation Modeling capabilities of LISREL. Mixed support was found for the hypothesized relationships. This study has implications for both academicians and practitioners. The contributions of this study include the development of a reliable and valid instrument, namely, the SHRM Inventory, which is expected to aid researchers in the analysis of SHRM in other countries. The study is expected to serve as a guide in understanding the status of SHRM in India, as opposed to studies in traditional HR areas that have been the focus of research in India till now.