However, there is some distinct evidence to prove HRM’s impact on performance is not as strong as supporters believe. Redman and Wilinson(2009:31) put forward a question “which practices should be included? ” They pointed out it is probably easier to pick up so-called negative practices that have a negative impact on performance, but it is difficult to agree on what the best practices are. In addition, all the best practices may be unsuitable for every employee (Atkinson 1984, in Redman and Wilkinson,2009:31).Accordingly, there seems to be some difficulties in choosing best practices.
According to Wall and Wood(2005:451), who evaluated key empirical studies, the evidence about HRM’s positive impact is weakened by the lack of consistency. Multiple indicators in performance and HRM measurement mean multiple relationships between HRM and performance. “Only a few studies explored the effect of HR practices on performance in the correct way by assessing HR practices at one point in time and relating them to subsequent performance”(Huselid, 1995; Youndt 1996, in Jaap Paauwe,2009:135).Therefore, it may be difficult to establish whether performance improvement is due to HRM or any other aspects. In terms of “best fit” theory as mentioned above, Redman and Wilkinson(2009:35) also put forward some inevitably fickle situations, namely the complicated external and internal environment.
Meanwhile they believe it is probably impossible to predict what will happen in the future and predict the direction of the changes. Also, HR practices find it hard to keep up with the speed of changes.For this reason, it is even unlikely able to identify exactly what and how HR practices could adapt to the company strategy. This factor moreover suggests if the practices cannot be identified, then the measurement may be questionable. To continue, not only the two main discussions above are needed, but also there are some other negative aspects which should be discussed below.
Researchers call the link between HRM and performance “black box”. “When we begin to look inside the ‘black box’ we find that there are differences between the espoused practices and the practices in use”.There are probably some differences between what HR department plans to do and what HR department actually does.
Although most companies believe training could improve employee skills, fewer than half feel training is relative to their real work (Redman and Wilkinson, 2009:39). Hence, the belief in the positive impact of HRM lacks of practical evidence. Another issue, which should be considered, is the “effect size”, namely what exactly HRM’s contribution to performance or how big is HRM’s impact.“Effect sizes are typically small, and the criteria used to judge statistical significance, and hence to draw conclusions about the reliability of findings, are often lenient, even in large sample studies”(Wall and Wood, 2005:451). Consequently, the small effect size indicates the literature towards exaggeration of HRM’s impact.
Conclusion In conclusion, this essay has attempted to demonstrate that although there are supporters of HRM’s impact on performance, it is obvious that the empirical evidence they provided is not yet sufficiently strong to justify the positive influence implied.Indeed, the measurements of HRM and performance are hard to reconcile and probably difficult to measure precisely. Multiple indicators lead to vague links between HRM and performance. If it is unpractical to measure, it is impossible to judge whether HRM has an impact on performance or judge HRM’s strategic contribution. The “best practice-best fit debates have largely been sidelined by the realization that both fit and flexibility are needed”.
For HR to have an advantage it will need to rely on implementation of best practices.Therefore, “looking for a link between HR practices and performance may be a misguided activity”, because the scholars probably should also study the link between organizational performance and policy, processes, implementation as well. (Redman and Wilkinson, 2009:44) In spite of the small effect size, HR could still function if a company treats its employees as their expected way. At the same time, line managers’ prominent role in the delivery of HR practices has been observed. It probably will be more studies about how line managers could help to improve HRM’s impact on organizational performance.(Redman and Wilkinson, 2009:41) There is no doubt that more research will continue to examine the link between HRM’s impact and performance.
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