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Strategic human resource management

and its linkage with HRM effectiveness
and organizational performance:
evidence from India
a
Feza Tabassum Azmi
a
Department of Business Administration, Faculty of Management
Studies and Research , Aligarh Muslim University , Aligarh, India
Published online: 24 Jun 2011.
To cite this article: Feza Tabassum Azmi (2011) Strategic human resource management
and its linkage with HRM effectiveness and organizational performance: evidence from
India, The International Journal of Human Resource Management, 22:18, 3888-3912, DOI:
10.1080/09585192.2011.561245
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The International Journal of Human Resource Management,
Vol. 22, No. 18, November 2011, 3888–3912
Strategic human resource management and its linkage with HRM

effectiveness and organizational performance: evidence from India
Feza Tabassum Azmi*
Department of Business Administration, Faculty of Management Studies and Research, Aligarh

Muslim University, Aligarh, India
The human resource management (HRM), once responsible for record keeping and
maintenance, has evolved into a strategic partner. This has led to the emergence of the
concept of strategic human resource management (SHRM). Despite the increasing
importance of SHRM, there is still a paucity of empirical evidences from the emerging
nations. Keeping in mind the fact that India is one of the fastest growing markets today,
a need was felt to explore the SHRM terrain in the Indian context. On the basis of an
extensive literature review, four types of fit vis-à-vis SHRM were identified.
Collectively called the SHRM Inventory, these were empirically tested to establish
unidimensionality, reliability, and validity. Thereafter, the four types of fit were linked
to effectiveness of HRM function and organizational performance using Structural
Equation Modeling capabilities of LISREL. Mixed support was found for the
hypothesized relationships. This study has implications for both academicians and
practitioners. The contributions of this study include the development of a reliable
and valid instrument, namely, the SHRM Inventory, which is expected to aid
researchers in the analysis of SHRM in other countries. The study is expected to serve
as a guide in understanding the status of SHRM in India, as opposed to studies in
traditional HR areas that have been the focus of research in India till now.
Keywords: discriminant validity; HR roles – position fit; HRM-cross-functional fit;
HRM-intra-functional fit; HRM-strategy fit; SHRM inventory
Introduction
The concept of strategic human resource management (SHRM) became popular in the
1980s with the development of two models, namely, the Matching model and the Harvard
model that proposed integrating strategy and human resource management (HRM).
Fombrun, Tichy and Devanna (1984) through their Michigan model emphasized the
importance of designing HR strategies to suit organizational strategy. Beer, Spector,
Lawrence, Mills and Walton (1984) as depicted in their Harvard model advocated the need
for a more comprehensive and strategic perspective on managing HR. Thereafter, the
literature shows an increasing emphasis on SHRM (Schuler and Jackson 1987; Lengnick-
Hall and Lengnick-Hall 1988; Hendry and Pettigrew 1992; Storey 1992; Wright and
McMahan 1992; Budhwar and Sparrow 1997; Poole and Jenkins 1997).
SHRM is an area that continues to evoke a lot of debate. This field is still in its
evolutionary phase and it is difficult to identify any crystal clear framework to retrofit the
existing scattered perspectives. The body of work in SHRM is relatively small, and most of
the questions are sorely in need of further attention. It is fashionable to raise questions
about the viability of SHRM because the research stream had mixed results (Chadwick and
*Email: ftazmi@gmail.com
ISSN 0958-5192 print/ISSN 1466-4399 online

q 2011 Taylor & Francis
http://dx.doi.org/10.1080/09585192.2011.561245
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The International Journal of Human Resource Management 3889
Cappelli 1999). One of the most common complaints is that empirical studies lag behind
SHRM’s theoretic underpinnings.
Most studies on SHRM generally focus on normative frameworks on how HRM
should fit with business management processes (Miles and Snow 1984; Baird and
Meshoulam 1988; Lengnick-Hall and Lengnick-Hall 1988; Schuler 1992). Surprisingly,
there are only few studies that look beyond what the ‘fit’ actually comprises (Golden and
Ramanujam 1985; Truss and Gratton 1994; Bennett, Ketchen and Schultz 1998; Wright,
McMaham, McCormick and Sherman 1998). Thus, we know relatively little about what
variables determine this fit. Most scales used by scholars (Budhwar and Sparrow 1997;
Huselid, Jackson and Schuler 1997; Teo 2000; Green, Cindy, Whitten and Medlin 2006)
focus on SHRM narrowly, taking a rather limited view of SHRM. Scales used in SHRM
studies (Chang and Huang 2005; Sheehan 2005; Teo and Crawford 2005; Ozcelik and
Aydýnlý 2006) have primarily emphasized fit between HRM function and corporate
strategy while ignoring other dimensions of SHRM (e.g. fit between HRM and other
functional areas or fit among HR subfunctions). Another noticeable limitation of prior
work in this area has been the failure to take a comprehensive view of the HRM system
(Wright, Gardner, Moynihan and Allen 2005). Much of the research on SHRM has
concentrated on a single or few HR practices (Martocchio 1998; Welbourne and Cyr 1999)
while measuring fit. There is also a dearth of studies in SHRM that are based on reliable
and valid research instruments. In recent times, baring a few exceptions (Ahmad and
Schroeder 2003; Takeuchi, Wakabayashi and Chen 2003; Green et al. 2006; Khilji and
Wang 2006), most studies are silent about reliability and validity issues.
Despite the importance of SHRM, there is dearth of literature in the Indian context. Indian
research (Amba-Rao 1994; Mathur, Aycan and Kanungo 1996; Bordia and Blau 1998) has
focused more on traditional HRM rather than on the interaction between HRM and strategy.
In the recent years, some work on strategic HR dimensions has been reported (Budhwar 2000;
Budhwar and Boyne 2004). There has been a marked shift toward valuing HR in Indian
organizations, as they become increasingly strategy driven. India is being recognized as one
of the most exciting emerging economies in the world. By 2020, India is expected to add
about 250 million to its labor pool, which is more than the entire labor force of Germany. This
so-called demographic dividend has drawn a new interest in HRM in India (Chatterjee 2007).
The volatile and changing business environment of India offers a good testing field for
measuring SHRM. Although a few instruments have been developed in the Western world,
a need was felt to develop a reliable and valid instrument and to test it in the Indian
context. The researcher was motivated by the fact that an empirical study of SHRM will
help broaden our understanding of the concept and its practice. Thus, the objectives of this
study were to develop an instrument for measuring SHRM, to empirically establish the
reliability and validity of the scales, to explore the impact that the dimensions of SHRM
have on the effectiveness of HRM function as well as organizational performance of the
companies in India. Data analysis was done using structural equation modeling (SEM)
capabilities of LISREL version 8.50.
SHRM fit
SHRM is basically concerned with the integration of HRM with corporate strategy (Cook
and Ferris 1986; Storey 1992; Bennett et al. 1998). However, there is divergence of view
on the nature of integration. Definitions of SHRM range from it being a human resource
system that is tailored to the demands of the business strategy (Miles and Snow 1984) to it
being the pattern of planned human resource activities intended to enable an organization
3890 F.T. Azmi
to achieve its goals (Wright and McMahan 1992). In the first definition, HRM is a reactive
management field, but in the latter definition it has a proactive function.
The concept of SHRM is embedded in the notion of complementarity or integration or
‘fit.’ Wright and Snell (1998) opine that fit is the degree to which the needs, demands,
goals, objectives, and/or structure of one component are consistent with the needs,
demands, goals, objectives, and/or structure of another component. The theories of fit are
based on the premise that organizations are more efficient when they achieve fit
(Lengnick-Hall and Lengnick-Hall 1988; Milliman, von Glinow and Nathan 1991).
Researchers (Baird and Meshoulam 1988; Lengnick-Hall and Lengnick-Hall 1988;
Truss and Gratton 1994; Boxall and Purcell 2000) have primarily dealt with fit between
HRM and corporate strategy. SHRM is concerned with integrating HRM with business
strategy (Schuler 1992; Becker and Huselid 1998; Sheehan 2005). Scholars have posited
that an organization needs to adopt HR policies to suit its strategies (Dyer 1985; Lengnick-
Hall and Lengnick-Hall 1988; Jackson, Schuler and Rivero 1989; Schneider et al. 2003).
At the same time, Budhwar and Boyne (2004), Becker and Huselid (1998), and Green et al.
(2006) have emphasized issues like importance of human resource in the organization and
HR inputs forming an integral part of corporate strategy.
Another type of fit that can be identified from SHRM literature deals with fit between role
and position of HR managers. SHRM necessitates that HR managers provide appropriate
input into strategic decisions and participate in strategic decision-making processes
(Fombrun et al. 1984). Others (Becker and Huselid 1998; Baron and Kreps 1999; Teo and
Crawford 2005) also have emphasized the need for the involvement of HR managers in
strategy building. This requires alignment of HR roles and position to make them more
strategic in nature. The Cranet-G 1999–2000 Survey (Cranfield Network on Strategic
International Human Resource Management), which has been the basis of study by Ozcelik
and Aydýnlý (2006), has focused on the two dimensions of fit mentioned above: fit between
HR and corporate strategy and fit in the strategic roles and position of the HR department.
Scholars agree that SHRM also implies ensuring internal fit or consistency in HR
policies and practices (Schuler and Jackson 1987; Milliman et al. 1991; Wright and Snell
1991; Wright and McMahan 1992; Delery and Doty 1996). At the same time, there are
several studies on dimensions of fit between HRM and other functional areas (Cascón-
Pereira, Valverde and Ryan 2006; McConville 2006). The decentralization of
responsibilities to the line has been viewed as a key characteristic of SHRM (Schuler
1992; Budhwar and Sparrow 1997).
Most authors (Schuler 1992; Huselid et al. 1997; Wright 1998) agree that the essence
of SHRM lies in gaining competitive advantage by managing human assets through an
integrated, synergistic set of practices that both complements and promotes the overall
business strategy. SHRM is largely concerned with ‘integration’ and ‘adaptation.’ Its
purpose is to ensure that HRM is fully integrated with strategy, HR policies are coherent,
and that HR practices are accepted by line managers (Schuler 1992). SHRM focuses on
aligning internally consistent HRM practices to build employees’ skills in an effort to
achieve business objectives (Lengnick-Hall and Lengnick-Hall 1988; Huselid et al. 1997).
Thus, based on the above discussion, primarily four types of fit can be identified from
the extant literature on SHRM: fit between HRM and corporate strategy; fit between HR
roles and position; fit within HRM function and fit between HRM and other functional
areas, respectively, called as HRM-Strategy Fit, HR Roles-Position Fit, HRM-Intra-
functional Fit, and HRM-Cross-functional Fit. Various studies have explored fit between
HRM and corporate strategy (Baird and Meshoulam 1988; Lengnick-Hall and Lengnick-
Hall 1988; Truss and Gratton 1994). Similarly, there are several studies on the dimensions
of fit between HRM and other functional areas (Welbourne and Cyr 1999; Cascón-Pereira
et al. 2006) or on fit between HR roles and position (Wei 2006).
Management scholars have become increasingly interested in how SHRM enhances
organization performance (Wright and McMahan 1992; Boxall 1995; Koch and McGrath
1996; Jackson and Schuler 1999; Huselid and Becker 2000). SHRM has become more
central to management literature owing to this link (Delaney and Huselid 1996). Studies
have established positive link between dimensions of fit in SHRM and corporate financial
performance (Huselid 1995), firm profitability (Terpstra and Rozell 1993; Shaw, Tang,
Fisher and Kirkbridge 1993; Pfeffer 1994), return on investment (Delery and Doty 1996),
excellence in cost-oriented manufacturing strategies (Snell and Dean 1992; MacDuffie
1995) or innovation strategies (Bennett et al. 1998), employee productivity, profit-
ability/cash flow and firm market value (Huselid et al. 1997), and achieving greater
economic success (Cook and Ferris 1986). Becker and Huselid (1998) examined the
relationships among HRM practices, organizational culture, and firm performance.

Huselid et al. (1997) found that strategic HRM has positive correlation with firm
performance, while technical HRM effectiveness was found not to have any correlation.
SHRM helps attain competitive advantage (Chew and Sharma 2005).
An increasing body of research has addressed the implications of fit within HRM
function for organizational performance (Ichniowski, Shaw and Prennushi 1997;
Ichniowski and Shaw 1999, 2003). Researchers mostly agree that HRM systems, rather
than single HRM practices have an impact on organizational outcomes (Huselid 1995;
Becker and Huselid 1998; Wright and Snell 1991). Researchers in this stream posit that
firms should create a high degree of internal consistency among their HR activities for
better results (Arthur 1992; Becker and Gerhart 1996; Youndt, Snell, Dean and Lepak
1996). At the same time, there are several studies supporting the thesis that the fit between
HRM and other functional areas helps in enhancing organizational performance (Gennard
and Kelly 1997; Thornhill and Saunders 1998). Coordination with line managers in HR
issues helps in improving organizational performance (Baird and Meshoulam 1988;
Arthur 1992; Becker and Gerhart 1996; Guest 1997; Wood 1999; Wall and Wood 2005).
From the above, it can be inferred that the various types of fit identified vis-à-vis
SHRM lead to better organizational performance. This leads to the following hypotheses
of the study:
H1: HRM-strategy fit has a direct and positive impact on the performance of the
organization.
H2: HR roles-position fit has a direct and positive impact on the performance of the
organization.
H3: HRM-intra-functional fit has a direct and positive impact on the performance of the
organization.
H4: HRM-cross-functional fit has a direct and positive impact on the performance of
the organization.
While researchers have emphasized that SHRM leads to better organizational
performance, several authors (Delery 1998; Ferris et al. 1998; Edwards and Wright 2001)
opine that a one-way causation between such fit and organizational performance is
unsatisfactory and that there exists an ‘indirect’ relationship between the two. Thus, there
are variables that mediate a link between such types of fit and business performance
(Huselid 1995; Paauwe 1996; Guest 1997; Fey, Bjorkman and Pavlovskaya 2000).
Dyer and Reeves (1995) suggested that strategic HR practices have their most immediate
impact on HR outcomes since they are in a closer line of sight to HR practice. These HR
3892 F.T. Azmi
outcomes result in organizational-level performance outcomes (Paauwe 1996; Guest 1997;

Fey et al. 2000; Colakoglu, Lepak and Hong 2006). Rogers and Wright (1998) stated that the
more proximal HR outcomes are a means for achieving distal organizational outcomes.
Researchers have investigated the impact of HR on employee-focused outcomes such
as job satisfaction (Seibert, Silver and Randolph 2004; Khilji and Wang 2006), motivation,
competence (Tessema and Soeters 2006), socialization (Klein and Weaver 2000), and
career success (Janasz, Sullivan and Whiting 2003). Many models assume that HR
practices affect performance in part by affecting employee perceptions, attitudes, and
behaviours (Ostroff and Bowen 2000; Wright, Dunford and Snell 2001).
Organizational performance may be viewed as quite distal from HR practices and likely to
be influenced by more proximal measures, for example, effectiveness of HRM function (Teo
2000). Huselid (1995) found a positive impact of HRM effectiveness on firm performance.
Thus, in order to study the impact of dimensions of SHRM fit on organizational performance,
the mediating role of effectiveness of HR function was also examined.

This leads to the next five hypotheses of the study:
H5: HRM-strategy fit has a direct and positive impact on the effectiveness of HRM
function.
H6: HR roles-position fit has a direct and positive impact on the effectiveness of HRM
function.
H7: HRM-intra-functional fit has a direct and positive impact on the effectiveness of
HRM function.
H8: HRM-cross-functional fit has a direct and positive impact on the effectiveness of
HRM function.
H9: Effectiveness of HRM function has a direct and positive impact on the performance
of the organization.
Study variables and research model

Based on an extensive review of the literature, measures and items related to independent
variable (dimensions of SHRM), dependent variable (organizational performance), and
mediating variable (effectiveness of HRM function) were identified.
Independent variables: dimensions of SHRM

The measures of the study were drawn from the extant literature on the subject. A
comprehensive view of SHRM was taken to incorporate the various perspectives that exist
in the area. As mentioned in the preceding section, SHRM is embedded in the concept of
complementarity or integration or ‘fit.’ Thus, the above-mentioned four types of fit were
taken up as independent variables in the study:
. HRM-strategy fit (HSF): Several authors, for example, Becker and Huselid (1998),
Baron and Kreps (1999), Khatri (2000), and others, have pointed out the need for a
fit between business and HR strategies. Budhwar and Boyne (2004) and Green et al.
(2006) suggest that HR issues should be taken up in corporate strategy formulation.
Teo and Crawford (2005) point out that HR activities and plans must be consistent
with organizational vision. Khatri (2000) and Sheehan (2005) pointed out the need
for information sharing between the HR manager and the top management. The
importance of human resource as an asset is considered vital to HR-strategy link
(Schuler and Jackson 1987; Bae and Lawler 2000; Teo 2000; Finegold and Frenkel
2006). Researchers (Green et al. 2006; Valverde, Ryan and Soler 2006) have opined
that some form of training and sensitization of top managers in HR is vital for
establishing linkage between HRM and strategy. Based on the above, the HSF scale
was designed focusing on how integrated the HR function was with the overall
strategic management process. It focused on issues like importance given to HR,
explicit efforts to align business and HR strategies, consistency of HR activities
with organizational vision, HR inputs forming an integral part of corporate strategy,
top management’s role in HR issues, etc.
. HR roles-position fit (HRF): Another important dimension of SHRM, namely,
strategic fit of HR roles and position can be identified from the works of Kelly and
Gennard (1996), Hope-Hailey, Gratton, McGovern, Stiles and Truss (1997), Baron
and Kreps (1999), Truss (2003), Chang and Huang (2005) and Sheehan (2005). This
dimension of SHRM reflects on the status and position of HRM department’s vis-à-vis
strategic affairs. Truss (2003) and Karami, Analoui and Cusworth (2004) pointed out
the need for HR staff’s involvement in overall strategic decision-making.
Interestingly, a number of researchers (Kelly and Gennard 1996; Hope-Hailey et al.
1997; Truss 2003) have used board-level representation as a measure of role and
position of HR department. Representation on the board of directors is critical if HR
managers are to have appropriate input into strategic decisions (Budhwar and Boyne
2004; Ozcelik and Aydýnlý 2006). Several authors have talked about changing role of
HR managers as business partners (Ulrich 1997; Bowen, Galang and Pillai 2002;
Sheehan 2005). This warrants developing general skills and capabilities among HR
managers (Brockbank 1999). Based on the above, the HRF scale was designed. It
focused on issues like position of HR departments, representation of HR department at
board, role of HR executives in strategic decisions, relationship of HR executives with
CEO, general managerial training to HR executives, etc.
. HRM intra-functional fit (depicted by HIF): Internal fit of HR policies or practices is
another important dimension of SHRM (Schuler and Jackson 1987; Wright and
McMahan 1992; Wright and Snell 1998; Khilji and Wang 2006; Wei 2006). Baron and
Kreps (1999) pointed out the need for a clear HR vision for internal fit. Khatri (2000),
Truss (2003), Chang and Huang (2005), and Green et al. (2006) talked about the
presence of an explicit HR strategy, while others such as Budhwar and Sparrow (1997)
and Budhwar and Boyne (2004), extended this idea to emphasize that HR strategy
needs to be translated into clear work programmes. Baird and Meshoulam (1988) and
Khatri (2000) opined that for a perfect fit, HR activities should be fully integrated with
each other and Khatri (2000) also focused on the criticality of free information flow
among constituents. The HIF scale included items related to how integrated the various
sub-functions of HR were. It focused on issues relating to the presence of HR vision,
existence of a coherent HR strategy, information sharing among HR managers, inter-
linkages between HR sub-functions, and allocation of budget for HR sub-functions.
. HRM-cross-functional fit (HCF): The fourth dimension of SHRM relates to ensuring fit
between HRM function and other functional areas (Becker and Gerhart 1996;
Welbourne and Cyr 1999; Wei 2006) as well as devolving HR responsibility to line
(Baird and Meshoulam 1988; Budhwar and Sparrow 1997; Cascón-Pereira et al. 2006;
Green et al. 2006). Brewster and Larsen (1992), Wood (1995), Budhwar and Sparrow
(1997), and Budhwar and Boyne (2004) emphasized the devolvement of responsibility
for HRM to line. Budhwar and Sparrow (1997) studied issues like primary
responsibility with functional managers for HRM and the percentage of managers
trained in HR issues. Khatri (2000) identified the importance of free information flow
3894 F.T. Azmi
between HR managers and others. Green et al. (2006) studied issues like the extent of
cooperative partnership between HR managers with the managers of other areas. The
HCF scale included items related to the transfer of HR responsibility to line managers,
the involvement of other departments in HR policies and activities, the integration of
the HR function with other functional areas of the organization, training to line
managers in HR, inter-linkages between HR function and other functional areas, and
information sharing between HR managers and line managers.
Dependent variable: organizational performance

Prior studies by survey method have warned that objective criteria (profit, sales, etc.) alone
cannot capture a firm’s actual performance (Boliko 1997). Similarly, only subjective or
perceptual criteria may increase measurement error and potential for common method bias
(Chan, Shaffer and Snape 2004). Researchers (Powell 1992; Takeuchi et al. 2003; Chand
and Katou 2007) recommend adopting both objective and subjective criteria for corporate
performance.
Thus, this study is based on both objective (published performance data) and
subjective (evaluation of corporate performance by the respondent) criteria for measuring
organizational performance. While perceptual data were obtained from respondents, the
researcher relied on published data to gather objective performance indicators.
. Subjective performance measure: It involved measuring the respondents’ evaluation
of the improvement in overall performance of the company in the past 1 year.
. Objective performance measure: Objective performance measures included three
measures published in Business World,1 namely, return on capital employed, sales,
and shareholder returns.
Thus, a composite scale, rather than one indicator, was used to capture performance.
Mediating variable: HRM effectiveness

Based on the suggestions by previous researchers (Huselid 1995; MacDuffie 1995; Ferris
et al. 1998; Edwards and Wright 2001), this research model assumes a mediating variable
in the link between the dimensions of SHRM and organizational performance, that is,
effectiveness of HR function. Teo and Crawford (2005) have tested three measures of
effectiveness of HRM, which were also used in this study.
. Influential effectiveness: Influence of HR department on the organization.
. Relationship effectiveness: Relationship of HR department with other stakeholder.
. Overall effectiveness: Overall effectiveness of HR department.
Moderating variables: organizational profile

Previous studies in this area have investigated the influence of a number of moderating
variables such as size, sector, level of technology, ownership, nationality, lifecycle stage,
and unionization (Jackson et al. 1989; Snell 1992; Easterby-Smith, Maihia and Yuan 1995;
Huselid 1995). There are evidences that HR practices and their resultant impact may differ
depending on these variables (Snell and Dean 1992). To assess the impact of HRM on
performance, one should first isolate HR practice effects by controlling the rest of the
variables bearing on performance; otherwise the results may be overstated or understated
(Guest 1997; Fey et al. 2000; Wright, Gardner and Moyniham 2003).
For this study, four dimensions of organizational characteristics were deemed to be

moderating variables, namely, the sector to which the company belongs (manufactur-
ing/service), ownership pattern (public/private sector), nationality or country of origin
(Indian/foreign), and the size of the company determined by the number of employees
(small/medium/large).
Ownership of an organization significantly influences the understanding of HRM
systems (Bjorkman and Fan 2002) in that multinationals, due to a greater availability of
resources and a global presence, are more likely to invest in HRM systems. Firm size (in
terms of total number of employees) is also associated with the use of ‘more sophisticated’
HR practices (Jackson and Schuler 1999; Zhu 2000; Datta, Guthrie and Wright 2005).
Research in the area (Sharma 1992; Mathur et al. 1996; Bordia and Blau 1998) has shown
differences in the pattern of HR practices of private- and public-sector organizations too.
Likewise, Marginson, Edwards, Martin, Purcell and Sisson (1988) and Othman and Ismail
(1996) argued that firms in the service sector were more likely to have a strategic approach
to HRM than manufacturing firms.
These variables have been used by other scholars in the area too (Jackson et al. 1989; Snell
1992; Shaw et al. 1993; Easterby-Smith et al. 1995; Huselid 1995; Lawler, Jain, Venkata
Ratnam and Atmiyanandana 1995; Khilji and Wang 2006). Moreover, these were simple,
objective, and easy-to-quantify measures as compared to more subjective moderating
variables used in other studies, for example, life-cycle stage, technological sophistication,
maturation effects, market trend, industry characteristics, HR capability, values, culture, etc.
The specification for the conceptual research model is given as:
PERF ¼ f fHSF; HRF; HIF; HCF; EFFg;
and
EFF ¼ f fHSF; HRF; HIF; HCFg;
where
PERF ¼ organizational performance (endogenous/dependent variable)
EFF ¼ HRM effectiveness (endogenous and exogenous/mediating variable)
HSF ¼ HRM-strategy fit (exogenous/independent variable)
HRF ¼ HR roles-position fit (exogenous/independent variable)
HIF ¼ HRM intra-functional fit (exogenous/independent variable)
HCF ¼ HRM cross-functional fit (exogenous/independent variable).
Research methodology
Sample
Primary data were obtained from the companies in India through a single cross-sectional
design based on survey methodology. The sampling frame for this study was derived from
the ranking of top 450 companies in India published in Business World. Taking such
organizations that are high performing, researchers could assume that HRM is at least
nominally supported (Sheehan 2005). Other researchers in the area have also followed a
similar methodology believing that top performing companies were assumed to have some
HR system in place and thus fulfilled the requirements of the study (Wan, Kok and Ong
2002; Chan et al. 2004).
Since this study was conducted on top 450 organizations across industries, it covered a
wide range of business sectors (including both public and private sectors, and also
manufacturing and service industries) so as to allow generalizations. The use of multiple
3896 F.T. Azmi
industries can help extend the generalizability of the findings (Purcell 1999). In order to
collect data from the companies that comprised the sample frame, a census approach was
used. Thus, all 450 companies were contacted. These organizations are relatively large in
size (. 250 employees), which supports the suggestion of researchers (Jackson et al. 1989;
Huselid 1995; Youndt et al. 1996; Chang and Huang 2005 and others) that small firms
(, 100 employees) have immature HRM practices and should be excluded from the sample.
The respondents for the study were senior HR managers. They are the ‘subject matter
experts’ and are believed to be in a good position to provide the required information
(Chan et al. 2004). Senior HR executives have been used as respondents in other studies
too (Budhwar and Sparrow 1997; Huselid et al. 1997; Teo 2000; Karami et al. 2004;
Chand and Katou 2007). Several scholars (Huselid and Becker 2000; Becker and Huselid
2006; Arthur and Boyles 2007) have supported the appropriateness of the use of a single
‘key’ informant since it provides researchers more valid and reliable data than that
gathered from multiple respondents.
Research instrument
In order to collect primary data, a research instrument, the SHRM Inventory, was designed,
which contained the following items:
Independent variables: SHRM dimensions

. HRM-strategy fit (HSF) scale: 12 items
. HR roles-position fit (HRF) scale: 11 items
. HRM-intra-functional fit (HIF) scale: 8 items
. HRM-cross-functional fit (HCF) scale: 14 items.
Dependent variable: organizational performance (PERF) dimensions

. Subjective performance measure (SRANK): single item.
In addition, the three objective performance measures, namely, ROCE (denoted by
ROCE), Sales (denoted by SALES), and shareholder returns (denoted by SHARE) were
obtained from a published source (Business World) and were not part of the survey
instrument.
Mediating variable: HRM effectiveness (EFF) dimensions

. Influential effectiveness (E1): single item
. Relationship effectiveness (E2): single item
. Overall effectiveness (E3): single item
Moderating variables: organizational profile dimensions

. Sector (manufacturing/service)
. Ownership (public/private sector)
. Nationality/country of origin (Indian/foreign)
. Size (small/medium/large based on the number of employees)
The SHRM Inventory utilized a five-point Likert scale anchored with end points
labeled as strongly agree (5) and strongly disagree (1). Five-point scale has been
commonly used in HR research (Budhwar and Sparrow 1997; Ahmad and Schroeder 2003;
Khilji and Wang 2007).
After extensive literature review, a preliminary draft questionnaire was prepared. Face
validity of the questionnaire was ensured by having two different researchers suggesting
items for the questionnaire, a method suggested by Ahmad and Schroeder (2003). In light
of the above, some minor modifications were made in the questionnaire. Thereafter, two
other researchers in the same field were then asked to review the questionnaire items and
guess what the questionnaire was intended to measure in order to ensure that the
questionnaire appeared reasonable and acceptable.
Pilot testing and data collection

The questionnaire was administered to a panel of HR practitioners who were asked to give
not only their responses, but also provide their comments on the questionaire and its items.
The respondents were asked to critique the questionnaire and its items. After pilot testing,
some of the items were refined, re-worded, or changed to be more representative of the
intended constructs, thus enhancing its content validity.
Final data were collected from the selected organizations through mail methodology
(both postal and email). This methodology has also been used by other researchers in the
field, for example, Budhwar and Sparrow (1997), Takeuchi et al. (2003), and Wood
(1995).
Response rate and non-response bias

The study received a 24% response rate, which is relatively high when compared to similar
researches. The response rates in similar studies have generally been low (mean rate
17.4%) as reported by Becker and Huselid (1998). Harmon, Brown, Widing and
Hammond (2002) reported a 10.8% response rate from a mail methodology. Given the
Indian context, postal surveys result in poor response rates (Budhwar and Sparrow 1997).
Several measures were taken to improve the response rate. The covering letter was
personalized, it assured anonymity of the respondent and offered a simple executive
summary. Since HR managers were assumed to be time-pressed, a short (one-page),
closed-ended, user-friendly questionnaire was used. Addresses were obtained from
business directories and from databases of different professional sources. Apart from this,
the researcher is a life member of several leading HR associations and professional bodies
in India. These associations served as valuable gateways in contacting HR executives.
Response rate of managers contacted through this channel was 100%. Executives enrolled
in PhD programs at the same university as that of the researcher and who were part of the
sample were also contacted. Several alumni of the University, in which the researcher is
working, were also contacted. Due to personal contacts, response was very high in this
case also.
Keeping in mind all of the above, a response rate of 24% can be considered to be
satisfactory as it provides a substantial number of respondents in absolute terms to yield
reliable statistical outcomes. For proceeding with SEM with LISREL, the suggested
sample size is a minimum of 50 and preferably 100– 200 (Lindquist, Vida, Plank and
Fairhurst 2001). Since this study had a sample of 108 companies, SEM procedure could be
conveniently adopted.
Testing for non-response bias helps in identifying any potential bias due to the failure
of elements in the sample to respond. Non-respondents have been found to descriptively
resemble late respondents (Armstrong and Overton 1977). Lambert and Harrington (1990,
3898 F.T. Azmi
p. 21) suggested comparing early and late respondents and assuming that ‘non-response
bias is non-existent if no differences exist on the survey variables’. Following this
approach, respondents were categorized as responding to either the initial (55.5%) or the
two follow-up requests (44.5%) sent subsequently. A comparison of the two groups was
conducted for each construct using independent sample t test. It was found that the two
groups exhibited responses that did not have statistically significant differences. Thus,
non-response bias has not negatively affected the data.
Assessment of common method bias

When data are collected from single informants, common method bias may lead to inflated
estimates (Podsakoff and Organ 1986). Podsakoff and Organ (1986) described ‘scale
reordering’ as a procedural option for minimizing this bias. It requires that the
measurement items related to the independent variable precede the dependent variable in
the questionnaire. The survey instrument used in this study was structured such that the
SHRM fit items preceded the effectiveness and performance items. Additionally, as
Podsakoff and Organ (1986) have recommended, Harman’s one-factor test was used to
examine any bias. All variables were entered into a principal components factor analysis.
Common method variance is signaled by the emergence of a single factor that explains a
majority of the variance. Nine principal components were extracted that accounted for
71.13% of the total variance. Thus, it can be said that this study does not suffer from
common method bias.
Measurement model: dimensionality, reliability, and validity

Following the approach of Anderson and Gerbing (1988) and Gerbing and Anderson
(1988), the measurement model for the four scales was first estimated before testing the
study hypotheses. Measurement model estimates the unidimensionality, reliability, and
validity of each construct (Green et al. 2006). The concept of unidimensionality checks the
extent to which items on a scale estimate one construct. Lack of unidimensionality
warrants purifying the scale by removing those items that reduce unidimensionality.
Confirmatory factor analysis (CFA) procedure was deployed to assess the unidimension-
ality of the scales. CFA was performed on the scales with the objective of determining the
fit of the one-factor model. Separate measurement models were estimated for each
construct within the SHRM Inventory, following the suggestions of Jöreskog and Sörbom
(2002). The HRM effectiveness scale (EFF) used in this study has been developed and
tested in previous research (Teo and Crawford 2005). Moreover, it consisted of three
single-item sub-scales, which cannot be subjected to a measurement analysis as suggested
by Jöreskog and Sörbom (2002) and Hennig-Thurau, Gwinner and Gremler (2002). The
same applies to organizational performance scale (PERF) also.
The measurement model was estimated based on standardized solutions. When using
LISREL, fit indices should ideally correspond to the recommended values (for the
recommended values of fit indices; see Table 1). Fit indices were assessed based on the
values recommended by researchers (Carmines and McIver 1981; Steenkamp and van
Trijp 1991; Garver and Mentzer 1999; Hu and Bentler 1999; Jöreskog and Sörbom 2002;
Schumacker and Lomax 2004). Since fit indices in LISREL for the scales, namely, HSF,
HRF, HIF, and HCF did not give satisfactory values, the scales were surmised to lack
unidimensionality and hence, it was decided to obtain purified scales with the help of item
reduction. This is a well-documented practice in business research (Churchill 1979;
Goodwin, Purwar and Rogers 1985; Bawa 2004). CFA was performed repeatedly to get a
unidimensional model. The method of standardized residuals was used to purify the scale
and achieve unidimensionality, as recommended by Anderson and Gerbing (1988),
Mentzer, Flint and Kent (1999), and Yelkur, Chakarbarty and Bandyopadhyay (2006). The
iterative process helped to obtain stronger fitting single-factor model. During each
iteration, one item was reduced based on the highest standardized residuals till p value
became greater than 0.05, that is, until there was no statistically significant difference
between items.
The above process of item reduction resulted in purified scales signifying that the
unidimensionality was attained. As each item that was deleted affects all others, a very
cautious approach was taken, deleting only one item per run. The iterative process helped
to obtain stronger fitting single-factor models. The fit indices improved after scale
refinement. The fit indices for the original and purified scales are given in Tables 1 and 2,
respectively.
The improved fit indices and p value in the refined scales support the case for
unidimensionality of the scales. The cumulative measurement model based on
standardized solution for the refined scales, namely, HSF, HRF, HIF, and HCF are
shown in Figure 1.
After unidimensionality was established, the scales were subjected to tests of
reliability and validity. Two types of reliability estimates were calculated in this study: (1)
indicator reliability and (2) scale reliability. Indicator reliability refers to the reliability of
individual indicators. These are the squared factor loadings for an indicator. By
convention, indicator reliability should preferably be 0.5 or greater (Jöreskog and Sörbom
2002; Schumacker and Lomax 2004; Wu 2005). In this case, indicator reliability was also
more than 0.5 or close to it in most cases.
The most popular method to assess the reliability of a scale is by computing the alpha
coefficient of internal consistency. A value of Cronbach’s alpha of 0.7 or more is used as a
criterion for a reliable scale (Nunnally and Bernstein 1994). Reliability assessment of the
four scales returned high Cronbach’s alpha values suggesting high reliability.
However, coefficient alpha tends to underestimate and sometimes overestimate scale
reliability (Garver and Mentzer 1999). Thus, apart from Cronbach’s alpha, Garver and
Mentzer (1999) recommended computing the SEM construct-reliability (CR) and
Table 1. CFA model fit indices for the original scales.

Original HSF Original HRF Original HIF Original HCF
Ideal scale scale scale scale
Fit indices value (12 items) (11 items) (8 items) (14 items)
GFI . 0.90 0.826 0.751 0.822 0.739
AGFI . 0.90 0.748 0.627 0.679 0.644
NFI . 0.90 0.931 0.854 0.814 0.881
NNFI . 0.90 0.946 0.852 0.789 0.898
CFI . 0.90 0.956 0.882 0.849 0.914
Chi-Square , 3.00 2.510 4.420 4.630 3.440
/degrees of
freedom
RMSEA , 0.08 0.119 0.179 0.184 0.151
SR , 2.58 Largest ¼ 5.410 Largest ¼ 7.010 Largest ¼ 4.530 Largest ¼ 5.320
Notes: GFI, goodness of fit index; AGFI, adjusted goodness of fit index; NFI, normed fit index; NNFI, non-
normed fit index; CFI, comparative fit index; RMSEA, root mean square error of approximation; and SR,
standardized residual.
3900 F.T. Azmi
variance-extracted (VE) measures for scale reliability. Fornell and Bookstein (1982) stated
that CR value higher than 0.6 and VE of 0.5 or higher imply that there is high internal
consistency. In this study, the CR and VE values exceeded or were close to the
recommended values. The indicator and scale reliability estimates for all scales are given
in Table 3.
Validity of a scale may be defined as the extent to which differences in observed scale
scores reflect true differences among objects of the characteristic being measured
(Malhotra 2005). For a convergent validity check, Bagozzi, Yi and Phillips (1991) and
Garver and Mentzer (1999) suggested that all items should have positive and significant
loadings (i.e. preferably greater than 0.50) on their hypothesized constructs. Most
parameter estimates of the scales had standardized loadings of more than 0.50 (Figure 1),
indicating high convergent validity. Ahire, Golhar and Waller (1996) and Green et al.
(2006) recommended assessing convergent validity using the Bentler –Bonett coefficient
(Bentler and Bonett 1980), with values greater than 0.9 indicating strong validity. In this
case, the scales had Bentler – Bonett coefficient values (i.e. normed fit index and non-
normed fit index) of greater than 0.9 as can be seen from Table 2, thus indicative of strong
convergent validity.
Anderson and Gerbing (1988) stated that convergent validity is assessed through t
values for the factor loadings. If all t values are over 2 ( p ¼ 0.001) then convergent
validity is said to be existing (Anderson and Gerbing 1988). It is to be noted that in all
cases, t values were more than 2 (see Table 2), thus indicating that convergent validity was
high.
Discriminant validity is the extent to which the items representing a latent variable
discriminate that construct from other items representing other latent variables (Mentzer
et al. 1999). That is, despite correlation, each scale represents a distinct concept (Garver
and Mentzer 1999). As suggested by Ahire et al. (1996), CFA was first run on all possible
pairs of scales fixing the correlation to one and then run a second time allowing for
correlation between the constructs. The difference between chi-squares from the two
factor analyses was computed and tested for significance. A statistically significant
Table 2. CFA model fit indices for the refined scales.
Refined Refined Refined Refined

Ideal HSF scale HRF scale HIF scale HCF scale
Fit indices value (8 items) (5 items) (6 items) (7 items)
GFI .0.90 0.933 0.973 0.970 0.972
AGFI .0.90 0.879 0.919 0.930 0.943
NFI .0.90 0.965 0.967 0.962 0.977
NNFI .0.90 0.979 0.979 0.993 1.000
CFI .0.90 0.985 0.989 0.996 1.000
Chi-square/ ,3.00 1.540 1.470 1.100 0.780
degrees of
freedom
RMSEA ,0.08 0.071 0.0669 0.0312 0.000
SR ,2.58 Largest ¼ 2.480 Largest ¼ 2.470 Largest ¼ 1.710 Largest ¼ 1.420
T-value range .2.00 7.27 –11.35 6.51– 9.26 4.66– 9.15 5.65– 9.35
Notes: GFI, goodness of fit index; AGFI, adjusted goodness of fit index; NFI, normed fit index; NNFI, non-
normed fit index; CFI, comparative fit index; RMSEA, root mean square error of approximation; and SR,
standardized residual.
Figure 1. Measurement model with correlations.
difference in chi-squares was found for all pair of scales, thus suggesting the existence of
discriminant validity.
Ahire et al. (1996) and Garver and Mentzer (1999) recommended assessing
nomological validity by determining whether the scales of interest correlate as expected.
3902 F.T. Azmi
Table 3. Indicator and scale reliability of the four scales.
Scale reliability estimates

Indicator reliability
Scales range Cronbach’s alpha CR VE
HSF 0.46– 0.73 0.90 0.91 0.57
HRF 0.40– 0.67 0.82 0.80 0.55
HIF 0.42– 0.56 0.79 0.80 0.56
HCF 0.28– 0.68 0.88 0.85 0.46
The correlation value between the scales was positive and significant (Figure 1), thus
giving proof of nomological validity.
Structural model fit

The structural model was assessed using independent variables (HSF, HRF, HIF, and
HCF), dependent variable (PERF) and mediating variable (EFF).
For this study, four dimensions of organizational characteristics were taken up as
moderating variables, namely, sector, ownership, nationality, and size of the company. All
the variables were included in a correlation matrix along with the study constructs as
suggested by Green et al. (2006). None of the moderating variables were found to be
significantly correlated with the study variable (all correlation values indicate weak
correlation). Thus, the hypothesized moderating variables did not have a significant
influence on the relationships and hence, none of them was incorporated in the structural
model.
When the structural model was ascertained using LISREL, it was found that the
structural model fits the data well. This indicates that there existed a positive and
significant relationship between the independent and dependent variables. The fit indices
were found to be satisfactory. Figure 2 illustrates the model based on standardized values
as structurally assessed.
The standardized path coefficients of the structural model depict the magnitude and
direction of relationships. Path coefficients (Figure 2) are used for testing the research
hypotheses:
H1: HRM-Strategy Fit had a significant direct and positive impact on the performance
of the organization as indicated by the significant path from HSF to PERF. Thus,
hypothesis H1 was not rejected.
H2: HR Roles-Position Fit had no significant direct and positive impact on the
performance of the organization as indicated by the non-significant path from HRF
to PERF. Thus, hypothesis H2 was rejected.
H3: HRM-Intra-functional Fit had no significant direct and positive impact on the
performance of the organization as indicated by the non-significant path from HIF
to PERF. Thus, hypothesis H3 was rejected.
H4: HRM-Cross-functional Fit had a significant direct and positive impact on the
performance of the organization as indicated by the significant path from HCF to
PERF. Thus, hypothesis H4 was not rejected.
H5: HRM-Strategy Fit had no significant direct and positive impact on the effectiveness
of HRM function as indicated by the non-significant path from HSF to EFF. Thus
hypothesis H5 was rejected.
H6: HR Roles-Position Fit had a significant direct and positive impact on the
effectiveness of HRM function as indicated by the significant path from HRF to

EFF. Thus, hypothesis H6 was not rejected.
H7: HRM-Intra-functional Fit had a significant direct and positive impact on the
effectiveness of HRM function as indicated by the significant path from HIF to
Figure 2. Structural model and path coefficients.

3904 F.T. Azmi
H8: HRM-Cross-functional Fit had a significant direct and positive impact on the
effectiveness of HRM function as indicated by the significant path from HCF to
H9: Effectiveness of HRM function had a significant direct and positive impact on the
performance of the organization as indicated by the significant path from EFF to
PERF. Thus, hypothesis H9 was not rejected.
Thus, although the structural model did converge, mixed support is found for the
hypothesized relationships in the research model. While in some cases, significant direct
and positive relationship existed between exogenous and endogenous variables; in some
cases, the relationship was indirect through mediating variables. The structural model
partially addresses the conditions for criterion-related validity, which is a measure of how
well scales representing the various independent (predictor) variables are related to
measures of dependent variable (criteria).
Alternate theory testing

Hair, Anderson, Tatham and Black (1998) recommended a competing models approach to
SEM when alternative formulations are suggested by the underlying theory. A number of
researchers (Wan et al. 2002; Sheehan 2005) have opined that organizations that are top
performing and are at the leading edge of HR practices have better SHRM fit. In such
organizations that have an effective HRM department, researchers could assume that
SHRM practices have some support (Sheehan 2005). Schuler (1994) asserted that firms in
highly competitive environments in the future will have world-class HRM departments.
He further notes that world-class HRM departments are heavily involved in linking HRM
practices to the strategic goals of the business. In summary, the effectiveness of HRM
departments appears to be positively associated with SHRM fit (Bowen et al. 2002).
According to these researchers, an effective HRM function and HRM department are a
prerequisite to SHRM.
Thus, an alternate model incorporating a partially reverse relationship (where HRM
effectiveness may lead to SHRM fit) was assessed. In this model, HRM effectiveness was
positioned as an exogenous variable influencing SHRM fit dimensions. Although the
alternate model converged, the fit indices of this new model were less satisfactory than the
original research model. Because the alternate model contains identical set of variables
included in the original model, the Akaike information criterion (AIC; Akaike 1987) as
well as the related cross-validated Akaike’s information criterion (CAIC) (Rust, Lee and
Valente 1995; Hennig-Thurau et al. 2002) are considered most appropriate for model
comparison. While in the case of the integrated model, AIC was 852.08 and CAIC was
1150.34, the values for the alternate model were AIC ¼ 899.22 and CAIC ¼ 1171.70. As
smaller values of these criteria indicate a better fit of the model (Kelloway 1998), these
results indicate a preference for the original integrated model over the alternate model.
The fit indices for the original and alternate research models are presented in Table 4.
Discussion and directions for future research

When the measurement model was assessed for the scales, namely, HSF, HRF, HIF, and
HCF, the results obtained showed that the scales were not unidimensional in nature. Scale
refinement was carried out to obtain better fitting scales with the help of CFA. The purified
HSF scale had eight items, HRF scale had five items, HIF scale had six items and HCF
scale had seven items, and their fit indices were in the recommended range. Reliability and
Table 4. Fit indices of original and alternate model.
FIT indicators Original model Alternate model

Goodness of fit index (GFI) 0.719 0.702
Adjusted goodness of fit index (AGFI) 0.672 0.656
Normed fit index (NFI) 0.903 0.898
Non-normed fit index (NNFI) 0.958 0.854
Comparative fit index (CFI) 0.962 0.857
Root mean square error of approximation (RMSEA) 0.064 0.071
Chi-square/degrees of freedom 690.09/480 ¼ 1.43 751.22/487 ¼ 1.54
validity of refined scales were then assessed. All four scales exhibited acceptable indicator
and scale reliability. Evidences of convergent, discriminant, and nomological validity
were also found.

The structural model examining the relationship between dimensions of SHRM fit and
effectiveness of HRM function as also organizational performance was partially supported.
Although the structural model did converge, mixed support is found for the hypothesized
relationships. HRF and HIF influenced PERF through the mediating variable EFF; HSF
and HCF had a direct impact on PERF. At the same time EFF had a positive impact on
PERF. This study partially corroborates the findings of previous researchers (Guest 1987;
Gennard and Kelly 1997; Thornhill and Saunders 1998). This may point to three things:
i. The findings partially lend support to the classical studies that talk about a direct
relationship between Strategic HRM variables and organizational performance
(Huselid 1995; Huselid et al. 1997; Schuler and Jackson 1999). This argument is
supported by the contingency perspective where a number of scholars suggest that the
strategy –HR interaction accounts for more variation in firm performance than the
indirect effects of HR measures (e.g. HR effectiveness in this case).
ii. The model not being fully supported points to the fact that there may be an interplay
of some other mediating variables in the relationship that needs to be explored in
future research.
iii. Most previous studies in the area have been carried out in the Western context. The
conceptual research model was generated based on these findings. It may be concluded
that Indian dynamics and settings being different, the model was not fully supported. It
seems unlikely that one set of HR practices will work equally well no matter what
context. It is true that Indian HR dynamics are converging with the West as
demonstrated by Khandekar and Sharma (2005) who found a positive link between
HRM practices and organizational performance. In spite of this trend of convergence,
a deep sense of locality exists creating more robust ‘cross-vergence’ in the conceptual
as well as practical domain. Such cross-verging trends need to be understood more
widely as practitioners face a new reality of HR (Chatterjee 2007). In Indian
organizations, HRM is viewed to be closely aligned with technical competency. Thus,
the understanding of the relationship of strategic HRM to organizational performance
is less well articulated in Indian firms. Future researchers may explore the role of other
variables in India to understand SHRM dynamics better. This study is only a pointer in
that direction. The vast Indian corporate terrain still needs to be uncovered.
This study has implications for both academicians and practitioners. It intends to build
on recent theoretical work aimed at extending the boundaries of how SHRM is defined and
researched. The contributions of this study include development of a reliable and valid
3906 F.T. Azmi
instrument, namely, the SHRM Inventory and testing it in the uncharted territories of India.
The SHRM Inventory developed in this study serves as an important contribution expected
to aid researchers in the analysis of SHRM in other countries. From a theoretical point of
view, the study offers and tests a conceptual model of SHRM identifying its various
dimensions and linking them to HRM effectiveness and organizational performance. The
findings are thus, expected to serve as a guide for strategic HR researchers in
understanding the current status of SHRM in India, as opposed to studies in traditional HR
areas that have been the focus of research in India till now.
This study contributes methodologically by deploying SEM, which is a rather less
touched upon technique in this field. Since SEM is said to be superior to traditional
statistical techniques (Anderson and Gerbing 1988; Garver and Mentzer 1999), the results
can be relied upon.
Since the instrument has been tested in the Indian context only, it needs to be cross-
validated on other samples. Thus, it calls for more studies in different settings, cultures,
and countries to further test its unidimensionality, reliability, and validity. Future
researchers may replicate the research incorporating a multiple-respondent approach, for
example, including top managers, line managers, and employees to avoid any potential
common method bias. A multi-constituency approach can reduce bias, if any, of key
informants. This problem can also be addressed by data triangulation, that is, using semi-
structured interviews together with questionnaire surveys.
Note
1. Business World is a leading business magazine that publishes annual rankings of companies
operating in India.
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The International Journal of Human

Strategic human resource management

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Strategic human resource management and its linkage with HRM

Department of Business Administration, Faculty of Management Studies and Research, Aligarh

ISSN 0958-5192 print/ISSN 1466-4399 online

relationships among HRM practices, organizational culture, and firm performance.

outcomes result in organizational-level performance outcomes (Paauwe 1996; Guest 1997;

the mediating role of effectiveness of HR function was also examined.

Study variables and research model

Independent variables: dimensions of SHRM

Dependent variable: organizational performance

Mediating variable: HRM effectiveness

Moderating variables: organizational profile

For this study, four dimensions of organizational characteristics were deemed to be

gathered from multiple respondents.

Independent variables: SHRM dimensions

Dependent variable: organizational performance (PERF) dimensions

Mediating variable: HRM effectiveness (EFF) dimensions

Moderating variables: organizational profile dimensions

Pilot testing and data collection

Response rate and non-response bias

Assessment of common method bias

Measurement model: dimensionality, reliability, and validity

Table 1. CFA model fit indices for the original scales.

Table 2. CFA model fit indices for the refined scales.

Refined Refined Refined Refined

Figure 1. Measurement model with correlations.

Table 3. Indicator and scale reliability of the four scales.

Scale reliability estimates

Structural model fit

effectiveness of HRM function as indicated by the significant path from HRF to

Figure 2. Structural model and path coefficients.

measures of dependent variable (criteria).

Alternate theory testing

Discussion and directions for future research

Table 4. Fit indices of original and alternate model.

FIT indicators Original model Alternate model

were also found.

Bawa, M.A. (2004), ‘Consumer Ethnocentrism: CETSCALE Validation and Measurement of

Management Policies Do Matter,’ Strategic Management Journal, 17, 335–354.

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