The Relationship Between Human Resource Management and Organizational Performance

This paper presents a theoretical and empirical analysis of the relationship between human resource management (HRM) and organizational performance. Theoretically, we discuss the importance of HRM for the development of resources and its impact on business performance. Empirically, we evaluated articles published on Brazilian academic journals that addressed such relationships. The results showed a lack of studies conducted at this intersection. From the universe of 2,469 articles, only 16 (0.6%) sought to relate HRM and organizational performance. We observed a dominance of isolated HR practices, which does not consider HRM as a system, and of operational performance measures, relative to financial and efficiency variables. Most studies show a positive relationship between HRM practices and performance, in line with the literature. However, we point out some methodological issues, such as the difficulty of isolating the HR practices from its context, the failure to consider the temporality of this relationship, and the comparison between companies from different industries.


INTRODUCTION
ne of the main themes in the field of business strategy concerns the competitiveness and determinants of organizational performance (BESANKO et al., 1996;GHEMAWAT, 2002). Amongst the main theoretical strands seeking to explain business competitiveness, the Resource Based View (RBV), which focuses on the development and exploitation of valuable, rare, and non-imitable resources, gives base to the hypothesis about the importance of human resource management (HRM) to companies' competitiveness (BARNEY, 1991;BARNEY;WRIGHT, 1998). Specialized human resources are valuable and potentially rare asthey detain tacit knowledge built by socially complex mechanisms. Imitating these resources is also challenging, since its relationship with organizational performance is uncertain and imprecise or, in other words, because they contain a causal ambiguity (BARNEY; WRIGHT, 1998;COFF, 1997).
Human resource management (HRM), as a key player in the creation and development of a highly productive workforce, lies in the center of the debate on the competitiveness of businesses (LEPAK et al., 2006). Practices that promote employee motivation and effort, knowledge, skills, and abilities, and opportunities for employee's contribution (JIANG et al., 2012) generate favorable conditions for the development of resources and capabilities that create value for organizations (BARNEY; WRIGHT, 1998), contributing to their performance and to the emergence of sustained competitive advantages (HUSELID, 1995;WRIGHT;MCWILLIAMS, 1994). This set of practices has been called, among other denominations, high-performance work systems (HPWS), following a line of study initiated by Huselid (1995). From this legacy, various studies tried to relate HRM systems or practices with organizational performance variables (COMBS et al., 2006;SHAW;PARK;KIM, 2013;WRIGHT et al., 2005). However, it is known that we are not dealing with a direct relation and of simple verification.
The study of organizational performance involves challenges regarding the interaction between the theoretical approach and the empirical observation of the concept (COMBS; CROOK;SHOOK, 2005). Organizational performance is a multidimensional and complex concept whose excessive simplification can prevent the assessment of management results (COMBS;CROOK;SHOOK, 2005;RICHARD et al., 2009;VENKATRAMAN;RAMANUJAM, 1986). On the one hand, the large number of variables used in the O BBR, Vitória, v. 13, n. 3, Art. 5, p. 90 -110, maio-jun. 2016 www.bbronline.com.br operationalization of performance leads to different results and a large variance in conclusions, limiting knowledge accumulation (BOYD; GOVE; HITT, 2005). On the other hand, the use of unique variables of profitability brings an oversimplification of a complex and multivariate construct (COMBS; CROOK; SHOOK, 2005;RICHARD et al., 2009).
Furthermore, financial performance measures do not represent the operational performance of the company and are more subject to the process of value appropriation on the part of actors involved (COFF, 1999;CROOK et al., 2011). Therefore, to support research on organizational performance the choice of performance measures should not desregard a theoretical discussion about the adopted approach.
Given the acknowledged importance of HRM for organizational performance, this article makes a theoretical analysis on these subjects and assesses empirical studies that address the relationship between HRM and performance. In the theoretical framework, we discuss challenges and difficulties inherent to research in this field, such as the need for a broader assessment of organizational resources and other causal antecedents of performance.
In the empirical stage, we evaluated articles published in major national journals that sought, somehow, to address such relationships, detailing the characteristics of samples, methods and measures and of the variables used in the operationalization of the two constructs. Finally, we discuss the results and the evidence of the impact of HRM on strategic resources development and its effect on organizational performance.

BUSINESS STRATEGY AND HUMAN RESOURCES
The heterogeneity of the organizational performance can be explained by the choice and positioning in a given sector (PORTER, 1985), by the development of valuable, rare and nonimitable resources (BARNEY, 1991) there is a causal ambiguity between resources and performance (BARNEY, 1991;DIERICKX;COOL, 1989). Resources and capabilities bring focus to inside the organization and its interaction with a changing and unstable environment. Competitive advantage is set up within this business-environment interaction and the development of resources and responses superior to that of competitors.
According to the RBV, human resources of an organization can contribute to superior performance and become a source of sustainable competitive advantage as long as they are valuable, rare and difficult to imitate (BARNEY; WRIGHT, 1998). Human resources have the potential to contain these attributes if we consider the value of a highly skilled workforce, the relative scarcity of qualified professionals, and that the explicit and tacit knowledge of employees are built over time and through socially complex mechanisms (CROOK et al., 2011).
In this case, the role of human resources management would reside precisely in the construction and development of a workforcealso referred to as human assets (COFF, 1997) or human capital (CROOK et al., 2011)competent, motivated and able to generate superior results (BARNEY; WRIGHT, 1998;COFF, 2002). This is called strategic human resources management, as discussed below.

STRATEGIC MANAGEMENT OF HUMAN RESOURCES
The literature on strategic human resources management (SHRM) is based on two fundamental principles. The first concerns the strategic importance of human resources, their competencies and behaviors, whilst the second refers to the role of human resource management practices in the development of these very resources (COLBERT, 2004;GERHART, 1996).
Research on SHRM takes into account HR systems as a whole and their impact on the organization, as opposed to the traditional perspective, which assesses HR practices separately and considers their impact on individual performance (BECKER; HUSELID, 2006 With respect to empirical studies in the field of SHRM, the matter that still does not seem to have been fully understood concerns the set of HR practices that effectively would contribute to higher organizational performance. Delery and Doty (1996) highlight the existence of three different theoretical perspectives (universalist, contingent and configurational), each one with implicit assumptions in this regard.
According to the universalistic perspective, certain practices would always be superior to others, regardless of the company's strategic positioning. The concept of high-performance work systems or high commitment work systems seems to have emerged from this line of research. However there has been no consensus in relation to practices that should be included in these systems and, consequently, surveys have been conducted with different sets of practices (DELANEY; HUSELID, 1996;LEPAK et al., 2006), which makes it difficult for knowledge accumulation (JIANG et al., 2012). The contingency approach, best aligned with the premise of vertical alignment, assumes that HR practices should be consistent with other characteristics of the organization, including its strategies. Finally, the configurational perspective focuses on the identification of unique patterns of factors that would have a synergistic and superior effect, built theoretically from ideal types (DELERY; DOTY, 1996).
Both contingent and configurational perspectives align with the RBV approach, as they understand HRM as a set of idiosyncratic resources used by the organization to achieve its strategic goals (BARNEY; WRIGHT, 1998).
In an attempt to identify dimensions or categories of practices that make up HPWS, the structure called skills-motivation-opportunity, originally proposed by Guest (1997), has been highlighted in literature. According to this framework, HR practices can be evaluated by their impact on employees' skills, their motivation and effort, and the opportunities they have to contribute (JIANG et al., 2012). Table 1 shows examples of HR practices associated with each of these categories.

Competencies
Recruitment and selection; training, development and education.
Motivation and effort Evaluation of performance, rewards, incentives, benefits, promotion and career development, and job security.

Opportunities to contribute
Workflow design, work teams, employee involvement policies, sharing information and formal systems of complaints and claims.  Jiang et al. (2012) also point out that little is known about the interrelationships between the various practices, highlighting the possibility of additive, synergistic or substitute effects.
In the first case, the practices have independent effects, so that each one contributes to the effectiveness of the system. If the relationship is substitutive, it implies that one practice may be replaced by another without losses, and that one of them is generating higher operating costs without adding benefits. Finally, the relationship between practices is synergistic when one contributes to enhancing the effectiveness of the other.
In Since organizational performance is a multidimensional concept, it seeks to measure companies' success in achieving the objectives proposed for different stakeholders in a given period (RICHARD et al., 2009). The various dimensions of organizational performance seek to encompass the diversity of interests in the company's success. One of the most influential approaches states that organizational performance is made up of three dimensions that can be considered as spheres that superimpose and complement each other (VENKATRAMAN; RAMANUJAM, 1986 VENKATRAMAN; RAMANUJAM, 1986).

RELATIONSHIP BETWEEN HRM AND PERFORMANCE
The main premise of studies on SHRM is that human resource management practices are causal antecedents of performance (BARNEY; WRIGHT, 1998;HUSELID, 1995).
Therefore, to analyze the causal relationship among constructs, it is necessary to evaluate longitudinal data. Furthermore, due to the very nature of the process by which people management practices develop resources and capabilities that impact performance, it is argued that there is a maturation period for the results to be observable. Therefore, it is Finally, it is important to consider that the relationship between investments in HRM and performance is mediated by resources and capabilities generated in the process. This aspect can be even more relevant when one observes only the financial performance of the organization. This is because the value created may not revert into superior profitability if appropriated by transaction partners (COFF, 1999). In the bargaining process for the value created, employees increase their bargaining power as they become more specialized and not easily replaceable (COFF, 1999). In addition, managers are recognized as actors in privileged condition of appropriating value, given their access to important information (COFF, 1999;COFF;LEE, 2003). The influence of employees and managers in the process of distribution of the value created has an impact on the costs of the company and, consequently, on its profitability (BLYLER; . In this sense, the relationship between HRM and operating performance can be more easily observed, both from the direct relationship between the two concepts and the fact that the operational performance precedes the process of appropriation (COMBS et al., 2006;CROOK et al., 2011). Financial variables, however, are more impacted by the process of appropriation and may not reflect the value created by the resources.
Taking into consideration the theoretical and methodological challenges presented here, in the second stage of this work, we sought to evaluate, by means of a meta-study, how the relationship between human resource management and organizational performance has been addressed in the main Brazilian publications in the field of administration.

METHODOLOGICAL PROCEDURES
The term meta-analysis, according to Hedges (1992)   In the third stage, we read the abstracts of the articles identified in the previous stage, in order to identify adherence with the objective of the study. In this process, we discarded the papers that mentioned keywords only tangentiallyin the contextualization of the study, for example -or when these had different meanings. For example, "employed" can refer to an employee of an organization or be a synonym of "used". Finally, 66 articles were selected for the final evaluation stage, which consisted in integrally reading them. In the fourth and final stage, all the 66 studies were fully read by the authors, and it was verified that only 16 (0.6% out of the total) effectively proposed to analyze the relationship between human resource management and organizational performance, from a qualitative or quantitative empirical approach. Table 1 contains data relating to the process of filtering and selection.

ANALYSIS AND DISCUSSION OF RESULTS
In the 16 selected articles, we found both quantitative (10) and qualitative (6) approaches. As for the method, the quantitative studies made use of structural equation models (4), linear regression (4), ANOVA (1), correlation analysis (1) and exploratory factor analysis (1). The six qualitative studies adopted the case study method. The samples varied both in number of companies as well as in relation to their sectors. In the analysis that follows, we discuss HRM topics, constructs and variables, approaches to organizational performance and, subsequently, the relationship between HRM and organizational performance.

HUMAN RESOURCES MANAGEMENT
The analysis of the constructs and variables of HR was initially divided into HRM practices and results, that is, resources developed by HRM. In the HRM practices analysis, we adopted the categorization proposed by Jiang et al. (2012), according to which the organization's performance would be impacted by the performance of employees, which in turn would be explained from the impacts of HR practices on their levels of competence, motivation and effort, and opportunity to contribute.
As shown in Table 3, nine studies addressed HR practices -four related to employees' skills, two concerning the creation of an environment propitious to contribution and only three focused on the set of HR practices.  Gomel and Sbragia (2011) Program's effects on the individual, the team and the management of the company. Perin et al.(2009) Performance assessment and skills development. Ubeda and Santos (2008) Opportunity to contribute Employee-management relationship; responsibility, freedom, decision making, control exercise for managers; use of power. Kirjavainen et al. (2010) Confidence, commitment; teamwork. Moori and Domenek (2007) Set of Practices Recruitment; training; performance evaluation; reward system; benefits system. Jabbour et al. (2012) Ability to keep staff well trained and motivated to work (single item).
Maciel and Camargo (2009) Effectiveness of HR management in relation to competition (single item).

Human Capital
Relationship between workers, employer-employee relationship, turnover, problems when someone leaves the company, difficulty in assessing the consequences of decisions. Ferreira and Martinez (2011) Learning culture Opportunities for continuous learning; questioning and dialogue; collaboration and team learning, systems to capture and share learning; delegation of power and responsibility; development of the organization's systemic vision; stimulating strategic leadership towards learning. Menezes, Guimarães and Bido (2011) Knowledge management Informality in the communication, horizontal hierarchical structure, teamwork, quality of leadership, support from senior management. concomitantly. This result differs from that found in international studies, in which financial performance variables are more frequent (COMBS et al., 2006;CROOK et al., 2011). The use of operational performance variables best captures the impact of HRM and resources on the performance, since the operational performance is a direct mediator of this relationship and it does not suffer from the impact of the appropriation of value (COMBS et al., 2006;WRIGHT et al., 2005). The combination of financial and operational variables, however, allows both the evaluation of HRM results as well as the impact of value appropriation in the process.
The most common variables were innovation and profitability, but, in general, we verified a low repetition of variables and of the metrics employed. The use of different psychometric scales (seven articles) and subjective analysis (five articles) for performance variables reduces the comparability of results between the studies. Among the studies, there was also the use of metrics that do not correspond to the organization as unit of analysis (teams, for example) and, for the purposes of this study, we did not considered these metrics.
Despite arguing that HR practices and resulting resources can lead to competitive advantage, few studies presented analyses of competitiveness. The analysis of the effects of HRM on the performance of the organization does not allow conclusions about the competitiveness of practices or their capacity to lead to competitive advantage. Finally, we note that the operationalization of the organizational performance construct is not preceded by a theoretical definition, leading to an obscure process of choice of variables.  Gomel and Sbragia (2011) Satisfaction with respect to investment Psychometric scale Maciel and Camargo (2009)
The positive result among the constructs corroborates to the theoretical discussions about the ability of HRM to develop resources that create value for businesses (BARNEY; WRIGHT, 1998;GERHART, 1996) and to the empirical studies that demonstrate the positive relationship between HRM and organizational performance (COMBS et al., 2006;CROOK et al., 2011;OLIVEIRA;OLIVEIRA, 2011).
However, it is necessary to discuss some relevant aspects of the relationship between these constructs, because by ignoring aspects of endogeneity in the choice of HRM investments, the resulting parameters and coefficients may be biased (ANTONAKIS et al., 2010). Therefore, we discuss aspects that require further investigation.
The first observation, which constitutes a contribution of this study, concerns the analysis of competitiveness of HRM in relation to other resource development practices in companies. There is a wide range of resources and capabilities that can be identified as antecedents to performance, but not all are able to lead to superior performance (NEWBERT, 2007). The positive result of practices and resources on the performance of a single company does not allow conclusions about their competitiveness, as those practices and resources may simply be competitive parity factors. Furthermore, as the relevance of resources also varies across different sectors and industries, studies that mix different industrial sectors do not allow acknowledging whether the strategy is idiosyncratic to the company or a self-selection process, inherent in the industry. Among the eight studies with positive and significant results, three studies combine different sectors and none of them use control variables to deal with the effect of omitted variables, aspects that limit conclusions on the effectiveness of HRM practices.
The analysis of the competitiveness of resources also demands the observation of performance measures in accordance with their potential for appropriation. This aspect is particularly relevant in the analysis of HR practices, because managers and employees have great ability to identify value, generating an information asymmetry that favors them in the process of appropriation (BLYLER, COFF, 2003;COFF, 1999 DOTY, 1996). On the other hand, the non-observation of the larger context of the practices also does not refute the hypothesis that there are superior HRM systems or even other omitted resources and variables that may lead to superior performance. Without a more comprehensive analysis of HRM, including the different interrelations between the practices (JIANG et al., 2012) and their impact on the dimensions of performance, a conclusion about the strategic importance of human resources for the organization becomes questionable.

FINAL CONSIDERATIONS
The aim of this study was to analyze how the Brazilian scientific production deals with the relationship between human resource management and organizational performance. Its relevance is in the acknowledgment of the importance of people in the development of resources and capabilities (BARNEY; WRIGHT, 1998;HELFAT;PETERAF, 2003) and in the creation of sustainable competitive advantages (BARNEY, 1991). As a limitation, we highlight the time frame and the initial screening, done only from the abstracts.
The literature review showed a wide range of relations between HRM practices and operating and financial performance of organizations (HUSELID, 1995;WRIGHT et al., 2005), as well as practical and methodological issues. The empirical part of the study showed that the subject is not yet dominant in national production and that there are few attempts to measure the relationship between these constructs. The results also showed gaps in the design and implementation of researches.
With regard to performance measures, there are important deficiencies in the measurement of variables, in the combination of more than one dimension of performance, in the comparative analysis between companies, and in the temporal analysis of performance.
With respect to HRM, we verified the concomitant use of variables related to HR practices and results, which is not recommended (JIANG et al., 2012). We also identified the use of a wide range of variables, a point also noted in the international literature (DELANEY; HUSELID, 1996) and that has been the target of criticism, since it imposes limitations on knowledge accumulation (BOYD; GOVE; HITT, 2005).
In the analysis of the few studies that seek to assess the impact of HRM on performance, we observed a dominance of positive results, in line with evidence found in the international literature (CHADWICK; SUPER; KWON, 2014;COMBS et al., 2006;CROOK et al., 2011;RAZOUK, 2011;SUN;ARYEE;LAW, 2007). However, considering the dispersion of variables and the methodological issues, we could not draw more thorough conclusions about the Brazilian reality, suggesting a fruitful field for future research.