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The associations between organisational performance, employee attitudes and human resource management practices

[Chin-Ju Tsai], Paul Edwards and Sukanya Sengupta
Journal of General Management, 36, 1, 1-20

Abstract

Most research on the associations between organisational performance, employee attitudes and Human Resource Management (HRM) practices has adopted a theoretical framework that proposes that HRM practices lead to HR outcomes (e.g. job satisfaction, skills, etc.) which in turn affect organisational performance. Building on theoretical frameworks and empirical evidence from the fields of organisational psychology-performance and HRM-performance, thispaper presents a study that develops and tests an alternative view of the association. This model depicts the influence of organisational performance on employee attitudes and the role of HRM practice as a mediator between the two. It was tested using data collected from employee surveys and management interviews in 32 small firms. The results suggest that employees in firms with better business performance have more positive attitudes towards three attitude measures (overall perceptions of work, job autonomy and the perceived link between reward and performance) and that the association between business performance and employee attitudes is partially mediated by HRM practices. The findings are discussed with respect to the nature of the complex performance-attitude-HRM relationship and their implications for management and future research.