Customer service-focused HRM systems and firm performance: evidence

from the service industry in Taiwan

Abstract

Human resources is a firm-specific asset that an organization possesses (Wright, Dunford, &
Snell, 2001; Wright et al., 1994). In the contemporary world of business, HRM should play a
strategic role and should be an internal resource to help organizations increase their competitive
advantages (Schuler, 1992; Wright, Gardner, & Moynihan, 2003; Wright et al., 2001). we
examine employee competency as the ‘black box’ between service focused HRM systems and
firm performance. Externally, we examine the effect of the interplay of a service-focused
strategy and service-focused HRM systems in predicting firm performance. We collect data from
different sources (i.e. executives, human resource members, and line managers). Using a final
sample included 2120 respondents from 175 firms in the service industry in Taiwan, The results
suggest that the region of non-significance on the moderator ranges from −.013 to 295.62,
indicating that any given simple slope outside this range is statistically significant. Our findings
provide new insights into conventional theories in SHRM in that the fit between strategy and HR
practices results in increased firm performance; however, our research suggests that a service-
focused strategy has a negative moderating effect on the relationship between service-focused
HRM systems and firm performance.

Introduction

A firm’s human resources are believed to provide a unique source of competitive advantage that
is difficult to replicate (Barney & Wright, 1998; Delery, 1998; Wright, McMahan, &
McWilliams, 1994). Strategic human resource management (SHRM) has been defined as ‘the
pattern of planned human resource deployments and activities intended to enable the firm to
achieve its goals’ (Wright & McMahan, 1992, p. 298). SHRM researchers have used various
labels to portray HRM systems, such as high-performance work systems (HPWS; Huselid,
1995), high-involvement HRM systems (Batt, 2002), and commitment-based HRM systems
(Arthur, 1994). In addition to these commonly used terms that target general managerial
objectives, recent research has developed other HRM systems targeting more specific objectives.
For example, a study of orthopedics units introduced HRM systems promoting cross-functional
coordination among medical care providers to improve the quality and efficiency of patient care
(Gittell, Seidner, & Wimbush, 2010). In doing so, this study investigates how internal customer
service-focused HRM systems enhance firm performance by improving customer service-
focused employee competency and through an external interplay with customer service-focused
strategies. Figure 1 presents our research framework.

Methodology

Data for this study were obtained from the service industry in Taiwan in 2006. Firms included in
the survey were service-oriented firms that emphasize customer service in their business
strategies, deploy a significant percentage of their financial revenue from customers, and, with
more than 100 employees each, were highly relevant to formally established HR systems
(Huselid, 1995; Lee, 2012). Access to participating companies was obtained through personal
contacts.

Strength

In the methodology, the author came up with survey type of questionnaire instrument developed
specifically for this study. The survey instrument consisted service-oriented firms that emphasize
customer service in their business strategies, deploy a significant percentage of their financial
revenue from customers, and, with more than 100 employees each, were highly relevant to
formally established HR systems (Huselid, 1995; Lee, 2012). `This study collected data from
different sources within each firm for the studied constructs HR managers were asked to provide
data on customer service-focused HRM systems and general information about the company.
Line function managers were asked to provide data on customer service-focused employee
competencies, top management executives and senior managers were asked to provide
information on customer service-focused strategies and firm performance.

Evaluation
The author has adequately established the significance of the research. Based on studies that
have been conducted, the author has discussed and makes some analysis and also explanation of
the study. Most of the points that have been discussed in this study, have met the requirement of
the research objectives from this article the author already state that Marketing Strategies and
Related Factors has positive and significant effect on Organization Performance of firms across
Taiwan.

Literature review were not developed appropriately for the research in addition empirical and
conceptual frame works are not well emerged.

The variables are not appropriately stated in empirical review part it means that both dependent
and independent variables are not clearly stated.

The good argument for this article was that the author used survey of this implies that the author
use an un appropriate sampling technique due this reason the author get below average response
from the total of 2000 questionnaires.

Data collection techniques used by the author was survey but if additional data collection
mechanism like closed ended likert scale form of questionnaire if implied in order to collect
reliable and valid data.

The author used more of descriptive statistical value for analysis of the date however, in my
opinion it is better to include inferential statistics and model in order to clearly show the strength
and direction of relationship between dependent and independent variables and to test association
of variables with each other and the extent of variance in the dependent variable as a result of
one unit change in the independent variable.

Contradictions

This study has data collection challenges. To reduce the possibility of common method bias, data
collection in this study involves a broad range of participants, including executives, HR
managers, and line managers, to provide comprehensive information on business strategy,
service-focused HR practices, employee competency, and the firm-level performance of each
firm. In addition, a sample within the same industry is required to control for industry effects,
and thereby, to limit sample size.

The author does not cheeked content validity and reliability of data.

The research lack appropriate recommendation for the stated objective and variables.

Elements for the given variables are not shown in the research and there is only two research
hypothesis were developed.

There is only two variables for the study and it is not enough to analysis the case in standard
way.

Result

The results show that the null structure model and the hypothesized model generate a significant
difference by using chi-square (Δχ2=251.08, Δdf = 8, p < .001). The results indicate that this did
not significantly alter the hypothesized model (Δχ2=2.93, Δdf = 1, n.s.), suggesting that customer
service-focused employee competency might fully mediate customer service-focused HRM
system and firm performance. Therefore, our empirical results did not support Hypothesis 2.
However, we then computed the magnitude of the indirect effect and found that the percentage of
the total effect mediated through employee competency was about 53% (.231/.434), thereby
indicating that employee competency did not account for 100% of the total effect.

Conclusion

SHRM researchers have argued that HR practices positively affect a firm’s performance (e.g.
Jackson et al., 2014; Wright & Snell, 1998), and such researchers have been devoted to seeking
the ‘black box’ relationship between these two factors. Prior studies have rarely specified or
tested specific HR practices and underlying organizational capabilities to establish these links
(Wright et al., 2001). Our research represents an initial step in this direction. Human capital
scholars have suggested that research should consider the organizational setting in which human
capital is studied because context plays a crucial role in the emergence of unit level human
capital resources and can influence the relationship between human capital resources and unit
outcomes (Nyberg et al., 2014; Ploy hart & Moliterno,2011). This study examined HRM in the
service context and conceptualized HRM systems as service focused. We found that service-
focused HRM systems have direct effects on employee service competency, echoing the
argument that strategy-focused HRM systems can increase employees’ strategy-focused
competency (Becker, Huselid, Pickus, & Spratt,

References

Aiken, L. S., & West, S. G. (1991). Multiple regression: Testing and interpreting interactions.
Newbury Park, CA: Sage.

Anderson, J. C., & Gerbing, D. W. (1988). Structural equation modeling in practice: A review
and recommended two-step approach. Psychological Bulletin, 103, 411–423.

Arthur, J. B. (1994). Effects of human resource systems on manufacturing performance and

turnover. Academy of Management Journal, 37, 670–687.

Aryee, S., Walumbwa, F. O., Seidu, E. Y. M., & Otaye, L. E. (2016). Developing and leveraging
human capital resource to promote service quality: Testing a theory of performance. Journal of
Management, 42, 480–499.

Bae, J., Chen, S. J., Wan, T. W. D., Lawler, J. J., & Walumbwa, F. O. (2003). Human resource
strategy and firm performance in Pacific Rim countries. The International Journal of Human
Resource Management, 14, 1308–1332.

Baird, L., & Meshoulam, I. (1988). Managing two fits of strategic human resource management.
Academy of Management Review, 13, 116–128.

Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of

Management, 17, 99–120