Over the last two decades or so, an increasing
number of HRM academics and practitioners have recognised the critical
role that human resources play in corporate success or failure.
Numerous empirical examinations and theoretical treatments of the
link between human resource (HR) practices and company performance
have been reported. However, the process through which this occurs
has not been well understood. Moreover, previous research on the
HR practices-company performance relationship focused on the manufacturing
sector in developed economies. Based on data collected from hotels
in the PRC, PhD candidate, Mr Liyun Sun, under the supervision of
Prof Samuel Aryee at Hong Kong Baptist Universitys School
of Business, tested a model of the processes that underlie the HR
practices-company performance relationship.
now believe HR practices and policies appear to emerge in bundles
and bundles of HR practices, rather than single, isolated practices,
are requisites for sustained performance.
this line of reasoning, the configuration of HR practices examined
in Mr Suns study consisted of selective staffing, extensive
training, internal mobility, employment security, job design, results-oriented
appraisal, incentive pay and participation (see graphic).
Additionally, he defined company performance in terms of employee
turnover, productivity and sales growth. His findings revealed that:
HR practices are related to employee turnover and productivity (but
not sales growth); and that HR practices are related to these two
performance indicators because they (HR practices) lead employees
to perceive their organisations as supportive.
on the principle of reciprocity, employees reciprocate the organisations
care and concern about their well-being by engaging in discretionary
behaviours that directly lead to reduced turnover and productivity.
findings suggest that investment in employees pays off in the service
sector, and underscores the role of effective HRM as a source of
competitive advantage. To serve as a source of competitive advantage,
HR practices should be designed to emphasise three critical elements:
employee motivation, skills enhancement, and empowerment.
Mr Liyun Sun : firstname.lastname@example.org