Strategic human resource management effectiveness and firm performance

Abstract

This study tests whether strategic human resource management (SHRM) effectiveness significantly affects organizational level outcomes. Using the resource-based view of the firm, this study examines the effective use of human capital on organizational performance. Further, the role that a contextual factor - capital intensity - plays in modelling is explored. Results show that SHRM effectiveness significantly reduces employee turnover and increases overall market performance assessment. However, SHRM effectiveness affected both firm productivity and return on equity only when moderated by capital intensity.