HRM-performance perspectives: An overview of theoretical challenges and prospects

Abstract

The research on human resource management (HRM) and performance claims a significant positive relationship. However, some researchers doubt this relationship. The purpose of this paper is to review existing available literature regarding the nature of HRM, nature of performance, and how these two are linked? This paper evaluates the literature on HRM-Performance relationship and concludes that there are significant theoretical challenges. The review of available literature pertaining to HRM practices reflects that there is a long list of HRM practices but researchers have no consensus on common practices. The review of high performance work system (HPWS) helps us to conclude that in spite of substantial research work on bundling of HPWS, consensus could not be arrived at some common structure. Similarly, the paper provides an overview of existing theoretical perspectives and concludes that some perspective provides good theoretical and practical base for the HRM-Performance linkages. However, there is deficiency in literature concerning the alternative perspective. This paper also reviews Organizational Justice (OJ) as an alternative option and concludes that OJ has great scope and it could be one of the most realistic perspective in the future HRM-Performance relationship. Likewise, the review of the black box helps us to conclude that there are theoretical gaps and misconceptions in HRM-Performance relationship. The paper also provides an insight of performance and concludes that majority of researchers have focused on shareholders approach, while the stakeholders approach is largely disregarded.