The Role of Internal Human Resource Orchestration on Firm Performance

Abstract

The purpose of this research is to measure the mediating role of teamwork andparticipation (T&P) on the relationship between two human resource (HR) practices– “training and development” (T&D) and “performance appraisal” (PA) – andoperational performance (OP). Employing the contingency approach, this studydevelops a research model that validates the assumption that appropriate internalorchestration of HR practices improves firm performance. Using AMOS, data from157 manufacturing firms are analyzed through structural equation modeling (SEM).The results show that T&P fully mediates the relationship between T&D and OP, andpartially mediates the relationship between PA and OP. This study, which providesempirical support for the importance of OP to firm effectiveness, finds that OP ispositively related to financial performance (FP). The study develops a theoreticallogic and empirically demonstrates that T&P is an appropriate practice for mediatingthe impact of T&D and PA on OP. The inclusion of T&P contributes to the theoryand shows that appropriate internal orchestration of HR practices can realize effectiveOP and consequently greater FP of the firm.