Understanding HRM–Firm Performance Linkages: The Role of the “Strength” of the HRM System

“Considerable evidence indicates that individuals desire consistency in organizational life (e.g., Kelley, 1973; Lidz, 1973; Siehl, 1985).”

“First, multiple types of work contexts coexist within a single organization (Bowen and Ostroff 2004), but the more local the context, the more potent its impact on an individual’s behavior.”

“It is suggested that employees digest and interpret the organization’s HRM practices and policies, and will in turn form their perceptions of the organization and its values (Bowen & Ostroff, 2004; Ferris et al., 1998; Kaya, Koc, & Topcu, 2010; Nishii et al., 2008).”

“Bowen and Ostroff (2004)’s model of the features of HR systems that influence employees’ perceptions of HR practices is untested, and thus future research is needed to examine whether their model may be useful for understanding the antecedents of employees’ attributions regarding the why of HR practices.”

“…job group) is likely to reflect a common set of beliefs concerning the nature of the exchange relationship and the cause-and-effect principles governing that collective and is thus likely to be important in eliciting desired outcomes in employees working within that context (Bowen & Ostroff, 2004).”

“…fit (Boxall and Purcell, 2016), about the process whereby HRM can be linked to performance (Jiang, Lepak, Hu and Baer, 2012), about its association with firm performance (Paauwe, Guest and Wright, 2013) and about the challenges of managing effective implementation (Bowen and Ostroff, 2004).”

“Homogeneity of thought is also facilitated in organizations in tight societies by a high degree of alignment or bundling across organizational practices that communicate similar expectations to individuals (Baird & Meshoulam, 1988; Bowen & Ostroff, 2004; Delery, 1998; Wright & McMahan, 1992).”

“High-Performance Work System for Service Quality Bowen and Ostroff (2004) noted that the content of work systems “should be largely driven by the strategic goals and values of the organization” and that “the foci of the human resource management practices must be designed around a particular strategic focus, such as s…”

“As noted by Bowen and Ostroff (2004), the content of HR systems ‘‘should be largely driven by the strategic goals and values of the organization,’’ and ‘‘to be effective in terms of content, the foci of the HRM practices must be designed around a particular strategic focus, such as service or innovation’’ (p.”

“Writers (Kramar 1992; Bowen and Ostroff 2004; Becker and Huselid 2006; Khili and Wang 2006; Purcell and Hutchinson 2007; Teo and Rodwell 2007; Stanton et al. 2010) using an SHRM approach have paid attention to the issue of execution and implementation of HRM policies.”

“…of HRM theory, our findings are aligned with classic HRM assumptions that human resources can improve firm performance (Becker & Gerhart, 1996; Bowen & Ostroff, 2004; Ferris et al., 1999; Guest, 2011), particularly when the focus of analysis is industrial and manufacturing sectors (Santos,…”

“Thus, the group or bundle of people management practices as perceived by employees constitute an important element in overall organisational climate (Bowen and Ostroff, 2004) and have causal powers different from the functional purpose of each practice.”

“Research in this area can build on the recent work of strategic HRM scholars who have examined the role of employee perceptions and interpretations of HRM practices (e.g., Bowen & Ostroff, 2004; Sanders & Yang, 2016; Wright & Nishii, 2007).”

“Furthermore, objective performance standards increase perceptions of fairness (Konovsky, 2000) that lead to greater consensus among organizational members (Bowen & Ostroff, 2004).”

“Thus, jobs in which the outcomes are impactful “send strong signals about what strategic goals are most important and what employee behaviors are expected” (Bowen & Ostroff, 2004: 207), mitigating the degree to which performance differences will be influenced by personality.”

“For example, research exploring the strength of human resource (HR) systems (Bowen & Ostroff, 2004) suggests that strong HR systems may increase the intensity of supply-side mobility constraints in firms.”

“Consensus requires competent leaders who are willing to engage in an open dialogue with workers, which eventually can make workers more motivated in helping the organization achieve its strategic goals during the crisis (Bowen & Ostroff, 2004).”

“An organization’s culture reflects deeply embedded values and beliefs, which are conceptually related to HRM philosophies, but such philosophies are a poorly understood element of HRM systems (Bowen & Ostroff, 2004).”

“results are consistent with Bowen and Ostroff’s (2004) intermedi-”

“…the “causal” arrows depicted in Figure 1 are based on theoretical predictions based on theoretical logic and prior findings from strategic HRM and organizational climate literatures (e.g., Arthur, 1994; Bowen & Ostroff, 2004; Huselid, 1995; McAllister & Bigley, 2002; Ostroff & Bowen, 2000).”

“One aspect of this relationship that has been recently examined by Bowen and Ostroff (2004) is Human Resource Management (HRM) strength.”

“Bowen and Ostroff (2004) also view HR practices as communication from the management to the employees that directly shapes how the employees interpret the strategic focus of the organization.”

“Therefore, the third critical HR goal in Boxall and Purcell’s (2003) basic framework is equally important for this proposed ‘balanced HR perspective’: social legitimacy.”

“Instead, bundles of HR practices and their contingent effects have to be analyzed (Bowen & Ostroff, 2004; Delery & Doty, 1996; Wright & Boswell, 2002).”

“Hence, it is appropriate to conceptualize and measure HRM practices at the organizational level, although, as suggested by Bowen and Ostroff (2004), such data would be best collected from individuals to examine contextual effects and employees’ perceptions.”

“Organizational justice can take various forms, but perhaps most relevant in an HR context are procedural and interactional justice perceptions (Bowen and Ostroff, 2004).”

“This approach assumes that HRM is best viewed as a consistent system that has most impact if all practices send consistent signals about the organization’s underlying intentions (Bowen & Ostroff, 2004).”

“To offset this, strong HR systems have the potential to create an organizational climate brimming with congruent perceptions and constructive relationships (Bowen & Ostroff, 2004).”

“unintended ways, and messages can be understood idiosyncratically, whereby two employees interpret the same practices differently’ (Bowen and Ostroff 2004, p. 206). Similarly, Wright and Nishii’s (2007) model proposes that the effects of HR practices on employee attitudes and behaviours occur via employee perceptions…”

“HR practices are most likely to lead to desired outcomes when these are consistently perceived by employees in intended ways (Bowen & Ostroff, 2004).”

“…are prevalent enough in the employee population, then the collective changes in human capital, attitudes, behaviors, and associated organizational climate, should be strong enough to influence organizational performance (Bowen & Ostroff, 2004; Kozlowski & Klein, 2000; Ostroff & Bowen, 2000).”

“As such, the immediate manager serves as an integral part in forming the group’s employee involvement climate, allowing for meaningful variation across units (Bowen & Ostroff, 2004; Richardson & Vandenberg, 2005).”

“That is, we propose that the strength of the HRM system will foster the emergence of organizational climate (collective perceptions) from psychological climates (individual-level perceptions)” (Bowen & Ostroff, 2004, p. 213).”

“Strengths use support will be affected by organizational-level cultural norms and by the managers who serve as the interpretive filters through which most of these norms get operationalized (Bowen & Ostroff, 2004).”

“…way, scholars are interested in understanding how HRM initiatives affect the unit’s HCR, which, in turn, influences unit-level performance (Bowen & Ostroff, 2004; Cappelli & Sherer, 1991; Gerhart, 2005; Huselid & Becker, 2011; Lepak, Liao, Chung, & Harden, 2006; Maltarich, Nyberg, & Reilly,…”

“It is critical that organizations ensure HRM messages are consistent, distinctive and embody consensus (Bowen & Ostroff, 2004).”

“In line with this argument, scholars have maintained that employees’ behavioral flexibility (Bhattacharya, Gibson, & Doty, 2005) and frequent demonstration of dedicated behavior (Bowen & Ostroff, 2004) can promote firm performance.”

“…employees’ reactions to HR practices as experienced by them.2 Individual HR practices have a functional role (assessment, training, involvement, etc) but, taken together, they can have a non-instrumental role in both reflecting and reinforcing wider organisational climate (Bowen and Ostroff, 2004).”

“…there is considerable variability in howany organizational initiative is implemented, and this variability affects signal strength, or the extent to which an initiative sends clear and unambiguous messages regarding what an organization is like (Bowen & Ostroff, 2004; Ostroff & Bowen, 2000).”

“In addition, we identify the innovative climate of an organization as a moderator that may change the strength of the association between learning practices and organizational innovation (Bowen & Ostroff, 2004).”

“We conducted two studies to test our EOR mediation model with middle managers, who execute corporate strategies by serving as “linking pins” to translate corporate goals and motivate staff to pursue such goals (Bowen & Ostroff, 2004).”

“This is in line with the approach endorsed by Bowen and Ostroff (2004), who argued that by taking account of employee ratings of important dimensions of HRM, researchers gain a deeper insight into the extent to which HRM practice is likely to impact upon organizational effectiveness.”

“The work environment is a rather general concept that has been conceptualized in terms of “strong situations” (Bowen and Ostroff, 2004), social climate (Collins and Smith, 2006), interpersonal relations (Kase et al.”

“In line with prior research, we argue that in order to achieve a distinct climate (e.g., a positive age-diversity climate), organizations must install suitable and focused HR practices (Bowen & Ostroff, 2004).”

“It is recognised that HRM affects organizational performance through its influence on employee attitudes and behaviour (Bowen and Ostroff 2004; Paré and Tremblay 2007; Nishii et al. 2008).”

“As such, organizations experience structural inertia or path dependence, such that consistency of HPWS over time is expected (Bowen & Ostroff, 2004).”

“Although these focal dimensions are commonly examined at individual level, they can also define relational climates to the extent the HR system signals distinct and consistent messages about normative interpersonal processes (Bowen & Ostroff, 2004).”

“Research shows that organizations not communicating their goals and not encouraging employees to share information can lead to negative outcomes because employees perceive this as procedurally unfair (Bowen & Ostroff, 2004).”

“…& Berdahl, 2002; Chen, Lee-Chai, & Bargh, 2001), helping behavior among employees who work in stronger and weaker cultures (e.g., Saffold, 1988; Sørensen, 2002), and conformity in organizations that differ in the degree of formalization (e.g., Aryee, Chen, & Budhwar, 2004; Bowen & Ostroff, 2004).”

“This issue is crucial for continued theoretical development in SHRM.’ Furthermore, Bowen and Ostroff (2004) argue that the question still left unanswered is the process through which HRM systems impact on organizational performance.”

“Similarly, an organization with weak HR alignment might employ its practices inconsistently across people and time (Bowen & Ostroff, 2004).”

“…the most significant conceptual issue involves understanding how the central construct in this literature, the human resource system, affects firm performance outcomes (Becker & Huselid, 2006; Bowen & Ostroff, 2004; Evans & Davis, 2005; Ferris, Hochwarter, Buckley, Harrell-Cook, & Frink, 1999).”

“A strong HRM system can promote a climate that supports KITwork by communicating and signaling the knowledge-centered activities that contribute toward the achievement of the company goals (Bowen & Ostroff, 2004).”

“Specifically, a human resource practice may formally be in place, but it may be delivered only sparingly, especially when delivery has been devolved to line managers and/or is not consistently applied to all employees (Legge, 2005; Bowen and Ostroff, 2004; Guest and Conway, 2011).”

“…posited to advance the SHRM research by building a bridge between macrolevel SHRM (i.e., firm) and microlevel (i.e., individual) outcomes (e.g., Bowen & Ostroff, 2004; Wright & Boswell, 2002; Wright & Haggerty, 2005).4 As Wright and Nishii (2007) suggested, to provide a deeper understanding of…”

“These positive messages are also known as signaling effect (Bowen & Ostroff, 2004; Ehrnrooth & Björkman, 2012), which suggest that HRM systems send messages to employees who, in turn, align their efforts toward the organization goals.”