The Impact of Strategic Human Resource Management on Employee Outcomes in Private and Public Limited Companies in Malaysia

Abstract

This study investigates the interaction effects of two business strategies (differentiation and low cost) and human resource (HR) management (HRM) practices (recruitment and selection, training and development, compensation, performance management, employment security and work–life balance) on employee outcomes (organizational commitment, turnover intention, employee involvement and job satisfaction). These relationships are further analyzed on the extent of differences between public and private limited companies in Malaysia. Structural equation modelling (SEM) is used to examine the effect of the three variables and the invariance effect of the two types of companies. The results show that HRM practices mediate the interaction of business strategy and employee outcomes. Furthermore, the effects of business strategy and HRM practices on employee outcomes in public limited companies are only slightly different from the ones implemented in private limited companies. Specifically, the moderation analysis shows invariance between differentiation strategy and variance in low-cost strategy.