HRM Strategic Integration On Organizational Performance

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Chapter -2
Review of Literature

This chapter reviews the literature about the issues surrounding the relative effects
of human resource management (HRM) strategic integration on organizational performance. It begins with a review of the various studies and builds a theoretical and conceptual framework on the effect of HRM strategic integration on organizational performance with two distinctive performance measures—financial performance and non-financial performance. Various organizational characteristics are identified as impact factors to strategic integration and performance.

HRM and Organizational Performance

The strategic human resource management (SHRM) empirical literature has mushroomed in recent years, and there is consistent evidence
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Contribution of HRM or its delivery should
focus on the outcomes and results of HRM activities (Armstrong 2000; Hussey 2002; Ulrich 1997). Examples of performance outcomes from HRM include commitment, competence, congruence, cost effectiveness, flexibility, quality, strategic workforce behaviours, productivity improvements and others. Table 2.3 provides a summary of the outcomes from eight HRM models.

TABLE 2.4 Summary table of performance outcomes from eight HRM
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However, despite the extensive nature of the strategic human resource management (SHRM) literature, there is surprisingly little that instructs how to measure the extent of policy integration between HRM and business strategy and how to achieve such integration. The empirical studies and theoretical development of HRM strategic integration is at the nascent stage. A conceptual or empirical model that gives a clear understanding about the degree of HRM strategic integration is lacking. There has been little attempt to model the transition of HRM strategic integration and identify the relationships between the factors that impact on the transition. Sheehan (2005) proposed a set of relationships attempting to document the change process necessary for the realization of the HRM goal of strategic integration and model the forces at work within an organization necessary to activate and sustain the transition from an old personnel approach towards a HRM

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