The influence of human resource management strength on organisational performance

Abstract

The strategic management of human resources (HR) is of critical importance to organisational effectiveness. The aim of this study was to assess the model designed by Bowen and Ostroff (2004). Firstly, by developing an instrument to assess the nine attributes of the strength of the HR system. Secondly, by exploring the impact of the strength of the HR system on organisational performance through the strength of the situation. Finally, by adding a new variable to the model: leadership. In the first phase, a psychometric approach was used to validate the nine attributes that define the strength of the HR system. The final instrument comprises 3 dimensions and 43 items: 1) visibility, 2) understanding, 3) legitimacy and 4) relevance (from the distinctiveness dimension); 5) instrumentality, 6) validity, and 7) consistency of messages (from the consistency dimension); 8) agreement between senders, and 9) fairness (from the consensus dimension). In the second phase, a quantitative approach was used to test the whole model. 521 questionnaires were returned by a multinational corporation operating in the hotel industry. Overall, all the scales showed good internal consistency and good results were obtained from the exploratory and confirmatory factorial analysis. However, the distinctiveness dimension stood out and the coherence and consensus dimensions revealed themselves to be determiners of this dimension. A multilevel analysis showed that: a) situational strength is a moderating rather than mediating variable, which agrees with the findings of other authors (Sanders at al. 2008); b)leadership is more important than HR system strength.