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).”

“This may help create strong HRM systems with distinctiveness (e.g., visible, understandable, and relevant practices), consistency (e.g., consistent, instrumental, and valid practices), and consensus (e.g., agreement and fairness) across HRM practices (Bowen & Ostroff, 2004; Ostroff & Bowen, 2016).”

“Studies in the realm of HRM research typically argue that HRM investments are appraised positively by employees, and this positive perception of their employer will lead to trust and longterm commitment (Bowen and Ostroff, 2004; Kehoe and Wright, 2013; Van Harten et al., 2016).”

“Because certain signals are sent by reward systems (Bowen & Ostroff, 2004), employees generally engage in behaviors that are rewarded.”

“Keeping in mind that HR practices send signals about the attitudes and behaviours that are expected and rewarded (Bowen and Ostroff 2004; Sanders et al. 2008), HR systems need to convey that the organisation is concerned about employee support and well-being, if they are to contribute to employee retention and civil b…”

“There has also been a growing focus on employees’ perceptions of and attitudes toward HPWS practices that are implemented within organizations (Bowen & Ostroff, 2004; Nishii & Wright, 2008).”

“A team strategic recruitment climate identifies what is important to that team and what recruiting values, beliefs, and behaviors are expected and rewarded (Bowen & Ostroff, 2004).”

“Bowen and Ostroff (2004) argued that the “strength” of an organization’s HR system can impact an organization’s climate.”

“Moreover, with significant advances in multilevel theory and research since the original OCP measure was conceived, considering the additional measurement issues that arise at higher levels of analysis [39], the need to establish its group-level properties could not be overstated; especially when one considers that th…”

“This approach reflects a contingency perspective to HRM in which contextual factors such as industry, firm size, strategy, and structure are assumed to lead to differences in the construction of HR systems (Baird & Meshoulam, 1988; Bowen & Ostroff, 2004; Delery & Doty, 1996).”

“…architecture predicts that workers inside the organization's boundaries are core workers, and therefore subject to the HRM principles of the firm (Bowen & Ostroff, 2004; Lepak & Snell, 1999), while those workers “outside” the organization are non-core and subject to limited or no HRM (principles…”

“…management and organizational behavior journals (see Appendix A for an overview); (2) the references to seminal papers on employee reports of HRM (Bowen & Ostroff, 2004; Khilji & Wang, 2006; Liao et al., 2009; Nishii et al., 2008; Nishii & Wright, 2008; Wright & Boswell, 2002); (3) the reference…”

“Bowen and Ostroff (2004) summarize employees’ knowing, understanding, and accepting of HRM practices under the notion of distinctiveness.”

“…the development of lists of best practices (Pfeffer 1994), we take as our premise the belief in bundling of high performance work practices (see Stavrou and Brewster 2005) or having a system approach to HRM (see Bowen and Ostroff 2004) as most effective in ensuring organisational performance.”

“HR system strength theory emphasizes that HR “practices can be viewed as communications from the employer to employee” (Bowen & Ostroff, 2004: 207) and that these communications occur between members of the top management team, HR professionals, and leaders throughout the firm’s hierarchy.”

“As expected, confusion and disillusionment amongst other negative reactions ensues, ‘as different individuals are subjected to different experiences with the HRM practices’ (Bowen & Ostroff, 2004, p.214).”

“According to Bowen and Ostroff (2004), HRM effects are best understood as an organization-level influence.”

“Limiting disinformation through timely provision of authoritative information may restrict stereotyping and reduce co-worker tension, thereby fostering worker co-operation and making CWA more likely (Bowen and Ostroff 2004).”

“According to the study of Bowen and Ostroff (2004), we consider that the employee perceived HPWS to represent the HR practices of the organization.”

“By contrast, employee perceptions offer a more rounded means to evaluate HRM interventions (Bowen & Ostroff, 2004), providing more proximate indicators of attitudes, behaviour, and wellbeing (e.g., Wood & de Menezes, 2011).”

“…senior management (Sosik & Potosky, 2002), parallel efforts to promote a work climate for leader adaptivity by, for example, tailoring the human resource practices that are used to develop and appraise leaders to clearly convey and support this expectation (Bowen & Ostroff, 2004) would be fruitful.”

“When both forms of i-deals ‘‘complement one another and fit together as a whole” (Bowen & Ostroff, 2004, p. 211), their competence-enhancing signals can be mutually reinforcing such that combined, they send a particularly strong and consistent message that enhances employees’ competence need…”

“Future multilevel studies might explore the ways in which the consistent versus inconsistent administration of HRM practices affects these perceptions and subsequent attitudes and behaviors (Bowen & Ostroff, 2004).”

“Theoretical work on the ‘strength’ of the HR system (Bowen and Ostroff, 2004) suggests that this ‘strength’ is a ‘linking mechanism that builds shared, collective perceptions, attitudes and behaviours among employees’ (Bowen and Ostroff, 2004: 206).”

“…(Larsen and Brewster, 2003; Mayrhofer et al., 2004b); is clearly aimed at improving organisational performance (e.g., Becker and Gerhart, 1996; Bowen and Ostroff, 2004; Wright et al., 2003; Huselid et al., 1997; Delaney and Huselid, 1996) and involves a shift from collective to…”

“First, it is easier for employees to understand the cause–effect relationship between behavior and results based on the internal consistency of HR practices, thus promoting the distinctiveness of the HRM system [19].”

“A fourth, and somewhat related outcome, is organisational climate: the degree to which employees have shared perceptions of what is important and what behaviours are expected and rewarded (Schneider 1990), the strength of which is likely to be influenced by features of the HRM of the corporation (Bowen and Ostroff 200…”

“We initially did not prefer any particular sectors, since it is supposed that meta-features of HRM are not industry-specific (Bowen and Ostroff, 2004).”

“For over a decade, scholars have devoted a great deal of attention to examining the link between human resource management (HRM) and organizational performance (Guest 1997; Wood 1999; Wright, McCormick, Sherman and McMahon 1999; Paauwe and Boselie 2003; Bowen and Ostroff 2004; Boselie, Dietz and Boon 2005; Wall and Wo…”

“These findings do not align well with well-established HR concepts such as internal alignment, strategic fit, and HRM system strength, all of which stress that the success of HRM activities depends on how well they converge towards realizing and signaling one consistent goal (Bowen & Ostroff, 2004).”

“However, as Bowen and Ostroff (2004) argue, representation alone does not lead to action.”

“Thus, our findings both support and extend previous studies in this area (Batt 2002; Bowen and Ostroff 2004; Collins and Clarke 2003; Collins and Smith 2006; Huselid, Jackson, and Schuler 1997) and suggest that commitment-based HRM practices on their own do not directly contribute to generate firm…”

“All efforts should be addressed to re-establish the psychological contract between individual and organization, to create a positive climate of mutual acknowledgement and trust that could encourage employees’ engagement toward change, their performance and consequently organizational success [128,129].”

“We believe that HR capabilities are necessary to create a ‘strong HR system’ (Bowen & Ostroff, 2004) and reduce the gap between intended and implemented HR practices and systems (Nishii, Lepak, & Schneider, 2008; Woodrow & Guest, 2014).”

“The talented employee: seen as a central character, but are they heard? Significant literature exists examining the employee organisation relationship (EOR) and employee attitudes such that the work-attitude-behaviour link has explained much of the exchange-based responses of employees in the workplace (Coyle-Shapiro…”

“…valid attributions associated with HRM and beneficial individual and organisational outcomes Consistent HRM messages Consensus between decision makers Agreement among principal HRM decision makers Fairness of HRM practices Source: Bowen and Ostroff (2004) Table I. HRM strength JHOM 24,2 186”

“This is consistent to studies which propose that the effectiveness of HRM should be based upon the employee’s responses to the HR practices (Bowen & Ostroff, 2004).”

“So, rather than drawing from models designed for large firms, small firms are advised increasingly to generate their own models and systems that align business goals (Boxall and Purcell, 2000; Henemann and Tanskey, 2002) with employee capabilities (Bowen and Ostroff, 2004; Cardon and Stevens, 2004).”

“This is arguably related to the absence of multi-level theories and multi-level research in SHRM (Bowen & Ostroff, 2004; Gerhart, 2005; Wright & Nishii, 2006), as well as the failure of HRM researchers to collect multi-source individual level data, which would allow controlling for differences in…”

“Recently, there has been some research into “why” HR practices lead to sustainable competitive advantage (Bowen and Ostroff, 2004); however, there is still little HR theory helping to explain “how” HRM practices lead to desired organisational outcomes, especially if the research focus is extended beyond organisational…”

“On the other hand, value-based outcomes appeal to employees ’ personal values to produce “strong cultures” (Bowen & Ostroff, 2004), and so must also appeal to senses of equity and procedural justice that appear to transcend cultures (Jiang, et al., 2017).”

“Employees’ performance has implications for a firm’s performance (Huselid 1995; Huselid, Jackson and Schuler 1997; Wright, McCormick, Sherman and McMahan 1999; Bowen and Ostroff 2004; Wall and Wood 2005; Guest and Conway 2011).”

“For example, drawing on Bowen and Ostroff (2004), Kehoe and Wright (2013, p. 370) argue, “some level of consensus in perceptions of HR practices in a collective (e.g., a job group) is likely to reflect a common set of beliefs concerning the nature of the exchange relationship. . ..””

“Why this may be so is theorized more fully by Bowen and Ostroff (2004).”

“In the field of human resource management literature, this dichotomy can be explained as a problem of perceptions regarding “intended” human resource practices desired by the company and “perceived” human resource practices as seen by employees [42,43].”

“It should also be noted that the dominant trend in current research on HRM-firm performance linkages has been to take a systems view of HRM by considering the overall configuration of HRM practices rather than the effects of individual HR practices on firm performance (Bowen & Ostroff, 2004).”