HR Practices, Organisational Climate and Organisational Performance: A Conceptual Review and Research Model

Author

Kavitha S R, Dr. Ganesha H R


Abstract

 The notion of human resource (HR) practices affecting organisational performance is backed by empirical evidence but the links between the impact and the mechanisms are not fully understood. The theoretical and empirical research related to HR practices and organisational performance through organisational climate is reviewed and a conceptual model in which organisational climate is a mediating variable is developed. The paper is based on the resource-based view, ability-motivation-opportunity framework, social exchange theory and signalling theory, suggesting that HR practices influence performance indirectly by influencing the shared perceptions of the employees' organisation of the value of the organisation, employees' expectations, and the value of the reward. Meta-Analytic and multilevel studies are review and a small amount of evidence for partial mediation is found. Five propositions are advanced: Practices and climate are linked, the relationship between the two is moderated by the strength of the HR system, as reflected by its distinctiveness, consistency and consensus. The paper identifies four evidence gaps: firstly, there is a lack of longitudinal designs; secondly, the majority of samples is from the West; thirdly, there is limited operationalisation of HR system strength; and fourthly, there is a lack of the employee wellbeing outcome measure distinct from measures of firm performance. Consequences for HR practice concerns the internal logic of HR systems, the role of communication as a way of interpretation, and the role of line managers as agents of interpretation.



Keywords

Human resource practices; Organisational climate; High-performance work systems; Organisational performance



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References


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