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).”

“…of HPWS, are hypothesised to contribute to enhance individual and organisational performance by sending clear and consistent signals to employees about what is expected from them at work, thereby helping to direct their effort and behaviour to organisational desirable goals (Bowen & Ostroff, 2004).”

“The former view is related to a system view of HRM and considers the overall configuration or aggregation of HRM practices and policies rather than investigating the effects of individual HRM practices on employee or firm performance (Bowen and Ostroff, 2004).”

“The more group members engage in behaviors aimed at improving the situation, the more likely it is that the goals of the group will be achieved (Bowen & Ostroff, 2004).”

“Unit climate is primarily shaped by colleagues, HR practices, organizational culture, and leadership from managers within the units (Bowen and Ostroff, 2004; Schulte et al., 2006).”

“They convey the organizations’ intentions towards its employees and are interpreted as trust-relevant signals by individual employees (Guzzo and Noonan 1994; Rousseau and Greller 1994; Bowen and Ostroff 2004).”

“Bowen and Ostroff (2004) have highlighted that the match among various HR practices may send a clear message to employees about the goals and core values of an organization.”

“Throughout the past decade, researchers have emphasized the need to explore “how Human Resource Management (HRM) practices contribute to superior firm performance” (Bowen & Ostroff, 2004, p. 203).”

“Similarly, in resonance with the social exchange theory, strategic HRM practices elevate improvement practices that strengthen persuasive duties to react in a significant way [71].”

“Hence, differences in social exchange relationships relate to different levels of personnel investment and trust (Brown & Brown, 2006) and explain different levels of outcomes in individual and team performance (Bowen & Ostroff, 2004; Collins & Smith, 2006; Fulmer, Gerhart, & Scott, 2003).”

“…attribute to the implementation of these practices is pertinent as this can influence the extent to which the practices in place are effective (e.g. Bowen and Ostroff, 2004; Nishii, Lepak and Schneider, 2008) and whether they are likely to have a positive or negative effect on employee well-being…”

“Bowen and Ostroff (2004), for example, emphasize the need to establish “an unambiguous perceived cause-effect relationship in reference to the HRM system’s desired content-focused behaviours and associated employee consequences” (p.”

“The findings from this research provide support for the work of Bowen and Ostroff (2004) and Takeuchi et al. (2009) by examining HPWS across multiple levels in order to show how policy is implemented and how employees experience HRM.”

“Research points the strong role that HR practices play in clarifying signals about expected behaviors from employees, and, equally, of signaling the organization’s support of their careers (Bowen & Ostroff, 2004).”

“Indeed, having a talented and flexible pool of employees adds to the human capital value of organizations and, ultimately, to their competitive advantage (Bowen and Ostroff, 2004).”

“Bowen and Ostroff (2004) distinguished between the content and the process of HRM systems and suggested that an HRM system can only affect employee attitudes and behaviors in an expected way when the system is delivered to send unambiguous signals to employees.”

“Despite the central role attributed to line managers in the strategic contribution of HRM to the firm, only recently has a case been made to include the HRM role of line managers in SHRM research (e.g. Gardner, Moynihan, Park and Wright 2001; Bowen and Ostroff 2004; Purcell and Kinnie 2007).”

“Considerable research evidence exists supporting the relationship between internally consistent HR practices and organizational effectiveness (Becker & Huselid, 1998; Bowen & Ostroff, 2004; Huselid, 1995).”

“These practices may develop trust between employees and managers, if consistent messages are delivered to employees (e.g. Bowen and Ostroff 2004; Guerci and Pedrini 2014).”

“HR practices can be viewed as signaling and communications mechanisms from employer to employee (Bowen & Ostroff, 2004), which are then interpreted and responded to by employees in complex ways.”

“upon the same framework, Bowen and Ostroff (2004) propose that individual differences are more likely to exert”

“In addition, previous research has observed that immediate supervisors are the most visible (Cook 2009) © 2014 Australian Human Resources Institute14 and influential (McDonald, Pini and Bradley 2007; Thompson, Brough and Schmidt 2006) representatives of organisational policies.”

“Bowen and Ostroff (2004) argued that HR practices serve as communications mechanisms to employees, and these communications must be interpreted through each individual’s personal lens (Wright & Nishii, 2006).”

“Organizational culture represents a “higherorder” social structure in organizations (Bowen & Ostroff, 2004); it affects the type of employee skills, behaviors, and HR practices that are valued in a firm, encouraging some and discouraging others (Barney, 1986; Schein, 1996).”

“Bowen and Ostroff (2004) argue that ‘agreement among top decision makers can help to foster consensus among employees, since it allows for more visible, relevant and consistent messages to be conveyed to employees’ (p. 212).”

“…and create a “strong climate” (Schneider, Salvaggio, & Subirats, 2002) by providing members with a collective sense of what is expected, desired, and appropriate (Bowen & Ostroff, 2004; Gelade & Ivery, 2003; Kopelman, Brief, & Guzzo, 1990; Ostroff & Bowen, 2000; Sanders & Looise, 2006).”

“According to Bowen and Ostroff (2004), when an HRM system is high in the three features referred to above, employees will tend to have a clearer view of cause (HRM)–effect (a purposeful management) relationships and are likely to be strongly influenced by these system properties, especially where…”

“…in the literature, a number of observers have concluded that no one has yet described where such synergies in HRM systems really come from (Bowen & Ostroff, 2004; Delaney & Huselid, 1996; Delery, 1998; Dyer & Reeves, 1995; Wilk & Noe, 1998).2 Instead, synergy is most often invoked…”

“Bowen and Ostroff’s (2004) attempt to link HR practices to employee reactions via communications theory illustrates this approach.”

“HR practices have been recognised as an important factor, which influences organisational performance (Bowen & Ostroff, 2004; Delaney & Huselid, 1996), such as service quality, customer satisfaction, and employee engagement (Boxall & Macky, 2007; Dean, 2004; Evans & Davis, 2005; Purcell &…”

“For example it has been suggested that HRM practices do not directly impact firm performance but instead contribute to the creation of organizational climates that foster superior performance (Bowen and Ostroff, 2004; Collins and Smith, 2006).”

“The latter can be explained by the notion that HRM practices can neutralize one another when sending out different signals (Bowen & Ostroff, 2004).”

“The HRM behavioral literature suggests that the effects of HRM practices on employee attitudes and behaviors vary with the attributes of HRM practices (Bowen and Ostroff 2004; Lengnick-Hall et al. 2009; Nishii et al. 2008).”

“An alternative to this view is that like other HRM policies (e.g., Bowen & Ostroff, 2004; Ferris et al., 1998), the implementation of LGBT-supportive policies and practices can influence the values and beliefs held by employees.”

“We also interviewed employees because social exchange theory (Blau 1964; Eisenberger, Hungtington, Hutchison and Sowa 1986) and signaling theory (Bowen and Ostroff 2004) argue that HR practices affect employees by supporting them, or by functioning as ‘signals’ of the organization’s intentions…”

“The majority of HPWS studies have attempted to demonstrate the positive linkage between HPWS and organizational performance (Bowen and Ostroff 2004), with the innovative HRM field being dominated by examining the nature of HPWS and their impact upon organizational financial performance (Delbridge and Keenoy 2010; Drum…”

“Fifth, because implementation of work–life flexibility policies hinges on various factors associated with the strength of the organization’s HRM system (Bowen & Ostroff, 2004); we entered the terms “system strength,” “strength,” and “HRM system strength.””

“Finally, even though HR practices exist at the firm or unit level and employee attitudes, behavior, and cognition are formed at the individual level (e.g., Bowen & Ostroff, 2004; Gerhart, 2005), most studies do not adopt a multilevel perspective.”

“So far we have some understanding of the mechanism underlying the HR processes (Becker and Huselid, 2006; Bowen and Ostroff, 2004; Collins and Smith, 2006; Neal et al., 2005; Pauuwe, 2004; Sun et al., 2007; Truss and Gratton, 1994) though some issues remain under-explored.”

“However, there is a call for more research efforts to uncover the processes mediating the relationship between high-commitment HRM and firm performance (Becker and Gerhart, 1996; Bowen and Ostroff, 2004).”

“…the progress in the macro-level strategic HRM research from a managerial focus, growing attention has been recently paid to understanding the effect of HR practices from an employee perspective (Bowen & Ostroff, 2004; Lepak & Boswell, 2012; Nishii & Wright, 2008; Paauwe, Wright, & Guest, 2013).”

“Adopting a strategic approach entails analysing a particular fit between various HRM practices and the competitive strategy of the firm (Bowen and Ostroff, 2004).”

“Thus, whereas Bowen and Ostroff (2004) view the HRM process primarily as influencing the clarity of the signals that the practices send to employees about desired behaviours, we adopt the following extended definition: ‘The “HRM process” refers to the generic process qualities of HRM practices…”

“In line with the work of Bowen and Ostroff (2004), we argue that if the perceptions of line managers and trade union representatives regarding each of the constructs presented in Table 1 are positive, the likelihood that they help the HR department in effectively installing a strong organizational…”

“Here we find that BPTW certification signals explain key organizational outcomes beyond the effects of existing systems ofHRpractices,whichmight be “stronger” and more immutable in BPTW-participating companies (Bowen & Ostroff, 2004).”

“Climate perceptions are believed to provide an important intermediate measure linking organizational programs with employee attitudes and behaviors and, ultimately, firm performance outcomes (Bowen and Ostroff 2004; Ferris et al. 1999).”

“Moreover, Kramar [22] acknowledges the critical role of a manager for the strength of sustainable HRM system [83].”

“Employee contributions to firm-level outcomes has been discussed in research linking HR practices to firm performance (Bowen & Ostroff, 2004) through the lenses of multilevel relationships among HRM practices, individual employee attitudes, and firm performance.”

“The second states that the interaction between satisfaction with HR practices and LMX relates to innovative behaviour: LMX and satisfaction with HR practices stimulate each other and this leads to more innovative behaviour [12].”

“…and performance (Guest, 1997; Wright & Nishii, 2007) and that it is employees’ perceptions of how and why HRM is implemented in the organization that determine their attitudes and behaviors that influence HRM outcomes (Bowen & Ostroff, 2004; Nishii, Lepak, & Schneider, 2008; Wright & Nishii, 2007).”

“Traditionally, this process of implementation of HRM activities was seen as unfolding through a design, implementation, and experience stage (Bowen & Ostroff, 2004; Jackson et al., 2014; Trullen et al., 2020), usually occurring within the ‘HR triad’ between HRM professionals, line managers, and…”

“In spite of such types of arguments, some researchers still noted a need to develop better theories explaining how HPWS functions (Bowen & Ostroff, 2004; Delery & Shaw, 2001).”