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Modes of Theorizing in Strategic Human Resource Management: Test of Universal, Contingency and Configuration Performance

This article examines the differences among three perspectives - Universalistic, Contingency, and Configuration - in the context of HR practices and their impact on organizational performance. The study tests hypotheses using data from a sample of 1,050 banks and analyzes the relationships between HR practice, organizational strategy, and performance measures. The results suggest that each perspective leads to different assumptions about the relationship among HR practice, strategy, and performance, and that managing HR in alignment with each perspective enhances organizational performance.

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Modes of Theorizing in Strategic Human Resource Management: Test of Universal, Contingency and Configuration Performance

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  1. Modes of theorizing in strategic Human Resource management: test of universal, Contingency and Configuration performance prediction Delery, John E; Doty, D Harold Academy of Management Journal; Aug 1996; 39, 4; ABI/INFORM Global pg. 802

  2. Perspective

  3. HR practices(Osterman, 1987; Sonneferd, peiperl 1988; Kerl, Slocum 1987, Miles and Snow 1984) • internal career opportunities • formal training systems • appraisal measures • profit sharing • employment security • voice mechanisms • job definitions

  4. HRM Practice on employment system (Sonneferd, peiperl 1988; Kerl, Slocum 1987, Miles and Snow 1984)

  5. Strategic type characteristics(Doty et. al., 1993) • Prospectors • Constant search for new product and markets • Analyzer • Operate in both stable product domain and change product domain • Defender • Narrow and stable product market • Makes major adjustment in technology and structure • Get better and more efficient to produce the product or service on defending market • Does little research and development

  6. Strategic of HR on employment system (Miles and Snow 1984; Doty et. al., 1993)

  7. Ideal Type(Govindsrajan, 1988; Sagev, 1998; Doty and Glick 1994)

  8. Article objective • Articulating the differences among 3 perspectives: Universalistic perspective, Contingency perspective and Configuration perspective • Testing hypothesis of ‘HR practice’ with Universalistic perspective, Contingency perspective and Configuration perspective

  9. Hypothesis

  10. METHODS • Samples: in a single industries (1.050 bank) • Participant: Senior HR Manager (HR Practice) and President of the bank (organizational Strategy) • Measure: • HR Practice • Organizational Strategy (Segev, 1989) • Performance: ROA, ROE • Control variables: Call reports, Sheshunoff bank search database • Ideal profile (Doty & glick, 1994, Sagev, 1989, Govindarajan 1988

  11. Participants • 216 usable questionnaires (21% response rate), 12.24 years old, 5.32 years occupied; 114 usable president questionnaires (53% response rate), 5.89 years president occupied,

  12. Result

  13. Result

  14. Result

  15. Result

  16. Result

  17. Discussion The result provided relatively strong support for universalistic perspective and some support for contingency and configuration perspectives • Profit sharing, result oriented appraisal and employment security had relatively strong universalistic relationships with accounting measure performance. • Different HR Practice are associated with difference financial performance. HR Practice estimate financial performance, approximately 30% higher for above mean deviation bank

  18. Discussion • Contingency result provide support for strategic focus of the SHRM Literature • Contingency relationship between strategy and participation, result oriented appraisals and internal career opportunity explain a significant portion of the variation in the same performance measure, as contingent on strategy • Bank align their HR practices with strategy estimate 50% higher ROA and ROE

  19. Discussion • The Configuration result suggest that some configuration of HR practice are better than others. • Employment system was also positively related to firm performance Managing HR as prescribed by each of the different perspectives enhances organizational performance.

  20. Conclusions • The result indicates that each of perspectives is viable and leads to different assumptions about the relationship among HR practice, strategy and organizational performance. • This study contribute links characteristics of employment system to organizational performance • Organization adopt best HR Practices can generate greater returns

  21. Limitation • Banking industry may different to others on HR practice • Job limitation used may different to other occupations on HR practice • Small set of HR practice population • Cross sectional research design effect on indicate performance

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