Causal relationship between HRM policies and organisational performance: evidence from the Greek manufacturing sector

Anastasia A. Katou, Pawan S. Budhwar

Research output: Contribution to journalArticle

Abstract

Blending insights from the contingency theory, the resource-based view, and the AMO theory, the purpose of this paper is to investigate the HRM-performance causal relationship in the Greek context. The empirical research is based on a sample of 178 organisations operating in the Greek manufacturing sector. Using structural equation modelling the results of the study revealed that the ability to perform (resourcing and development), motivation to perform (compensation and incentives), and opportunity to perform (involvement and job design) HRM policy domains are moderated by business strategies (cost, quality, innovation), and additionally, the motivation to perform is further moderated by managerial style and organisational culture. Further, the results indicate that the impact of HRM policies on organisational performance is fully mediated by employee skills, attitudes, and behaviour. The paper concludes that although the motivation to perform HRM policy domain causes organisational performance, through employee attitudes, it may be supported that organisational performance positively moderates the effectiveness of this HRM policy domain, raising thus the question of reverse causality.
Original languageEnglish
Pages (from-to)25-39
Number of pages15
JournalEuropean Management Journal
Volume28
Issue number1
DOIs
Publication statusPublished - Feb 2010

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Manufacturing sector
Organizational performance
Employees
Employee attitudes
Quality costs
Innovation
Job design
Business strategy
Structural equation modeling
Empirical research
Resource-based view
Incentives
Causality
Organizational culture
Contingency theory

Keywords

  • HRM policies; HRM outcomes;
  • causal relationship
  • AMO theory
  • organisational performance

Cite this

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title = "Causal relationship between HRM policies and organisational performance: evidence from the Greek manufacturing sector",
abstract = "Blending insights from the contingency theory, the resource-based view, and the AMO theory, the purpose of this paper is to investigate the HRM-performance causal relationship in the Greek context. The empirical research is based on a sample of 178 organisations operating in the Greek manufacturing sector. Using structural equation modelling the results of the study revealed that the ability to perform (resourcing and development), motivation to perform (compensation and incentives), and opportunity to perform (involvement and job design) HRM policy domains are moderated by business strategies (cost, quality, innovation), and additionally, the motivation to perform is further moderated by managerial style and organisational culture. Further, the results indicate that the impact of HRM policies on organisational performance is fully mediated by employee skills, attitudes, and behaviour. The paper concludes that although the motivation to perform HRM policy domain causes organisational performance, through employee attitudes, it may be supported that organisational performance positively moderates the effectiveness of this HRM policy domain, raising thus the question of reverse causality.",
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Causal relationship between HRM policies and organisational performance : evidence from the Greek manufacturing sector. / Katou, Anastasia A.; Budhwar, Pawan S.

In: European Management Journal, Vol. 28, No. 1, 02.2010, p. 25-39.

Research output: Contribution to journalArticle

TY - JOUR

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T2 - evidence from the Greek manufacturing sector

AU - Katou, Anastasia A.

AU - Budhwar, Pawan S.

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AB - Blending insights from the contingency theory, the resource-based view, and the AMO theory, the purpose of this paper is to investigate the HRM-performance causal relationship in the Greek context. The empirical research is based on a sample of 178 organisations operating in the Greek manufacturing sector. Using structural equation modelling the results of the study revealed that the ability to perform (resourcing and development), motivation to perform (compensation and incentives), and opportunity to perform (involvement and job design) HRM policy domains are moderated by business strategies (cost, quality, innovation), and additionally, the motivation to perform is further moderated by managerial style and organisational culture. Further, the results indicate that the impact of HRM policies on organisational performance is fully mediated by employee skills, attitudes, and behaviour. The paper concludes that although the motivation to perform HRM policy domain causes organisational performance, through employee attitudes, it may be supported that organisational performance positively moderates the effectiveness of this HRM policy domain, raising thus the question of reverse causality.

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