The HR function's influence on organizational performance beyond high-performance work practices paradigm: an HRM whole system perspective

Abstract

PurposeThis paper analyzes the influence of HR function on organizational performance through the effective deployment of high-performance work practices. Although researchers have examined the relationship between these constructs, extant literature demonstrates contradictory findings. Thus, building on contemporary strategic HRM literature this study expands previous frameworks adopting a system thinking perspective, namely the concept of maturity of HRM system.Design/methodology/approachIt is a cross-sectional study, having collected primary data from 424 managers and employees working in 135 organizations. The research model and hypotheses were tested at unit level using structured equation modelling.FindingsThe results support a positive impact of the HR function on perceived organizational performance. Furthermore, demonstrating that the mediation through high-performance work practices is partial, supporting that the HR function has an incremental value over HR practices on organizational performance. Inspired by system thinking, this study tested an integrated model that combines the HRM system, HR function and organizational performance. Overall, it contributes to the literature by providing additional evidence to the influence of HR Function for organizational performance.Research limitations/implicationsThe data were collected using a questionnaire at a single point in time, and thus, not allowing cause-effect inferences.Practical implicationsThe results provide guidance to organizational leaders interested in designing and implementing effective HRM systems and building successful HR departments.Originality/valueThis study advances the understanding of the mechanisms by which HR function, HR practices and HRM system interact to explain organizational performance. Furthermore, it suggests that organizational decision-makers to benefit the most from high-performance work practices should embedded them on mature HRM systems.