This document discusses a proposed study to examine the relationship between strategic human resource management (SHRM) and organizational performance. The study would collect longitudinal data over 3 years to assess how SHRM indicators relate to company performance, organizational commitment, and employee psychological capital both before and after the implementation of an HR strategy. The expected results are a deeper understanding of how HR practices impact employee attitudes and capabilities, and how these factors influence organizational performance over time.

1. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
Open the black-box...between HR and
Performance
Authors:
Ana Rita Damas Oliveira
anaritadamasoliveira@gmail.com
ISPA
Paulo Alexandre Guedes Lopes Henriques
lopeshen@iseg.utl.pt
ISEG
Teresa Cristina Clímaco Monteiro d´Oliveira
teresa.oliveira@ispa.pt
ISPA
Ana Rita Oliveira 25 Fevereiro 2011

2. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
State of the Art
What makes HR strategic?
Business Strategy HR Strategy
SHRM Literature Review
HR acting strategically/aligned with Business Strategy
Integrated approach linking HR to performance, (Paul & Anantharaman,
2003, Katou & Budhwar, 2010)
Most pressing theoretical and empirical challenge in SHRM literature,
(Becker & Huselid, 2006)
Ana Rita Oliveira 25 Fevereiro 2011

3. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
State of the Art
Is there a direct impact between HR and performance?
NO
No single HRM practice has direct causal connection with organizational
financial performance , (Paul & Anantharaman, 2003)
We need more theoretical work on the black-box between HR and
performance and less on the black-box within the HR... (Becker & Huselid,
2006)
Strategy implementation as the central mediating variable between HR
and Performance (Becker & Huselid, 2006)
Ana Rita Oliveira 25 Fevereiro 2011

4. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
State of the Art
Why Best-Practices or Best-Fit Stream?
90’s approach – literature dominated by Best-Practices approach
Replication approach = competitive advantage?
... and integration approach? ... and business strategy approach?
Best-Fit Stream (Katou & Budhwar 2010)
“It is not the HR practices that determine the organization
performance”… it is the impact of those practices on people that represent
the source of sustainable advantage, (Messermith & Guthrie 2010).
Ana Rita Oliveira 25 Fevereiro 2011

5. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
State of the Art
People as Strategic Assets – “VRIN” concept
VRIN resources - “valuable, rare, inimitable, and non substitutable”, (Barney,
1991 cited in Locket et al, 2009).
Strategic assets - “set of difficult to trade and imitate, scarce, appropriable,
and specialized resources and capabilities that bestow the firm´s competitive
advantage”, (Ami & Schoemaker, 1993 cited in Becker & Gerhart, 1996).
“The source of competitive advantage... is the people who are selected, and
developed via SHRM practices... while presumably the human and social capital
created by these HR practices”, (Messersmith & Guthrie ,2010)
Ana Rita Oliveira 25 Fevereiro 2011

6. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
State of the Art
Human Capital created by SHRM practices??
RBV theory and Dynamic capabilities: resources difficult to imitate and with
the ability to be renowable, ( Ambrosini & Bowman , 2009), (Locket et al, 2009) .
Human capital as an intangible resource, related with company performance
outcomes … that refers to the skills and knowledge obtained through education,
training and experience, (Sturman & Cheramie, 2008).
Major criticism in human capital area is the “preoccupation with individual-
levels” instead of “short-term organizational effectiveness (e.g., return on
investment, stock value) and long term organizational effectiveness (e.g. long-
term growth, increased market share, innovation, social responsibility), (Avey et
al, 2010).
Ana Rita Oliveira 25 Fevereiro 2011

7. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
H3
H1
Operational model and hypotheses
H3: Organizational commitment
H1: SHRM indicators will be positively
H2 H4
variables will be positively related
related with organizational commitment with organization performance
variables(company satisfaction, job
satisfaction and job retention).
H4: Employee levels of
H2: SHRM indicators will be positively psychological will be positively
related with employee levels of related with organization
psychological capital performance
Fig 1. Conceptualization for the HR-Performance link Source: Author
Ana Rita Oliveira 25 Fevereiro 2011

8. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
Methodology/Case Study:
The selection of the case method considers the investigation
characteristics.
Since the study scope is the HR-Performance link…
“Case study design also involves decision about the time frame for
research, particularly the period of time which the research will relate, and
the number of episodes of data collection required”, (Ritchie & Lewis, 2003).
A qualitative design needs to be flexible and allow changes during the
phenomenon understudy takes place, and the challenge “to figure out which
design and methods are most appropriate, productive and useful in a given
situation”, (Pattou, 2002).
Ana Rita Oliveira 25 Fevereiro 2011

9. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
Study Design: HR measures precendent to
organization performance:
We want to challenge the study design by using longitudinal
data, in order to draw relationship conclusions.
Research about HR-Performance relationship has been “paid
inadequate attention to temporal precedence and/or alternative
explanations”, (Wright et al, 2005).
Most of the studies are post-predictive and few studies consider a
predictive design, where “HR practices assessed at one point in time were
related to subsequent firm performance”, (Huselid, 1995; Youndt et al,
1996; and Youndt & Snell cited in Wright at , 2005).
Ana Rita Oliveira 25 Fevereiro 2011

10. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
Data Collection timeframe
Year 1 Year 2
Year 3
SHRM indicators
SHRM indicators Company SHRM indicators
Company Strategy Performance Company
Performance Implementation Organizational Strategy Performance
Organizational Commitment Implementation Organizational
Commitment Psychological Commitment
Capital Psychological
Capital
Source: Author
The data collection will be done during a 3 years period (3 business cycles),
before and after SHRM implementation, and, at the same time tracking
SHRM indicators, company performance, organizational commitment and
pshycological capital indicators.
Ana Rita Oliveira 25 Fevereiro 2011

11. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
Measures:
Company Performance: Financial Measures, such as, Gross Margin,
Operational Costs, EBITDA, Market Share (depending on company
business)
Strategic HRM: Company HR records: performance records, training
participation, competencies assessment, bonus and merit increases: as
indicators of quality and effectiveness of HR practices and work related
outcomes (Ulrich, 1997; Luthans & Avolio, 2007; Youseef & Luthans,
2007)
Organizational Commitment Variables: Company satisfaction, Job
Satisfaction and Job Retention from employee survey data(Ulrich, 1997).
Psychological Capital: assessed through PsyCap questionnaire (Luthans
et al, 2007)
Ana Rita Oliveira 25 Fevereiro 2011

12. From Strategic Human Resources to Organization Performance
From Strategic HR to Organization Performance
Expected results and contributions
Deeper understanding of the variables that affect the process stream, starting
with HR practices and their impact on people and the consequent
psychological capital creation that impacts business performance.
Contribute to increase knowledge in one of the major criticism that presently
exists concerning the relationship between human capital and performance
(lack of relationship with short-term and long term performance outcomes)
Contribute to human resources improvement, allowing them to be prepared
to face major challenges in the near future, having in consideration the
present economic constraints of the Portuguese economy.
Ana Rita Oliveira 25 Fevereiro 2011