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THE EFFECT OF STRATEGIC

HUMAN RESOURCE MANAGE-


MENT ON ORGANIZATIONAL
PERFORMANCE: THE MEDIATING
ROLE OF HIGH-PERFORMANCE
HUMAN RESOURCE PRACTICES
R E B E C C A M I T C H E L L , S H AT H A O B E I D AT, A N D
M A R K B R AY

This study investigates the impact of a strategic role for human resource
management (HRM) on organizational financial performance. Survey data
from 118 financial and manufacturing organizations in Jordan is analyzed
to investigate a moderated mediated pathway between a strategic role for
HRM and organizational financial performance. The first finding, that high-
performance human resource practices (HPHRPs) mediate the relationship
between the HR strategic role and performance, suggests that the position
of the HR professional as a strategic partner enhances the legitimacy of HR
initiatives, as well as facilitating the resourcing and support for their imple-
mentation. The second finding, that line management devolvement moder-
ates the relationship between the HR strategic role and HPHRPs, suggests a
trade-off between a strategic and operational focus for HR professionals, and
also indicates the value of embedding HR practice execution in operational
administration. © 2013 Wiley Periodicals, Inc.

Keywords: HR strategic role, HPHRPs, organizational performance,


devolvement

Correspondence to: Rebecca Mitchell, Newcastle Business School, University of Newcastle, SRS140, Social
Sciences, University Drive, Callaghan, NSW 2308, Australia, Phone: +61249216828, Fax: +61249216911, E-mail:
Rebecca.mitchell@newcastle.edu.au.

Human Resource Management, November–December 2013, Vol. 52, No. 6. Pp. 899–921
© 2013 Wiley Periodicals, Inc.
Published online in Wiley Online Library (wileyonlinelibrary.com).
DOI:10.1002/hrm.21587
900 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013

S
trategic human resource manage- of HR policies and practices that enhance
ment (SHRM) research focuses on productivity and develop human resource–
the contribution that HR practices related organizational capabilities (Ulrich,
can make to organizational perfor- 1997; Ulrich & Lake, 1990). Substantial work
mance and competitive advantage has occurred in SHRM, which suggests that
(Collins & Clark, 2003). Within this research the adoption of high-performance human
context, the role of HR management as a stra- resource practices (HPHRPs) promotes bet-
tegic partner with influence in organizational ter organizational performance (Becker &
and HR strategic decision making has grow- Gerhart, 1996; Huselid, 1995). However, the
ing importance (Barney & Wright, 1997). relationship between a strategic role for HR
Globalization of business and the associated professionals and the effective implementa-
intensification in competitive pressures has tion of HPHRPs remains unexplored (H. T.
led to an increasingly strategic role for HR Chang & Chi, 2007). While previous research
professionals, directed toward aligning indicates that the strategic role held by HR
HR practices with business strategy (Raub, professionals is a critical aspect of HRM policy
Alvarez, & Khanna, 2006). The strategic role enactment (Hailey, Farndale, & Truss, 2005),
of HR professionals focuses on few studies have investigated, or established,
While previous
strengthening the organizational the link between the literature on HPHRPs
value of the HRM system and its and HR professionals’ strategic role.
research indicates contribution toward achieving or- In recognition of this research need, the
ganization strategic goals (Pfeffer, current study investigates the “black box”
that the strategic 1994; Ulrich, 1997). Among HR between the HR strategic role and financial
roles, many authors argue that the performance by exploring the mediating role
role held by HR
“strategic role” is a pivotal one for of HPHRPs, defined as a system of interrelated
professionals is HR professionals in today’s orga- human resource managerial practices that,
nization (Cleland, Pajo, & Toulson, taken together, influence employee’s abil-
a critical aspect 2000). ity, motivation, and opportunity by creating
Despite the priority placed conditions of high involvement and partici-
of HRM policy
on HR professionals as strategic pation in them in order to increase organiza-
enactment, few partners, recent reviews suggest tional effectiveness (Huselid, 1995). HPHRPs
that there has been little effort to reflect a combination of HR practices that
studies have evaluate the strategic contribution aim to improve organizational performance
of the HR role (Cabrera & Cabrera, (Boselie, Dietz, & Boon, 2005). Building on
investigated, or 2003). This is a significant research recent work by Applebaum, Bailey, Berg,
established, the gap, particularly as studies show and Kalleberg (2000), this study employs the
that firms remain primarily con- Ability-Motivation-Opportunity taxonomy
link between cerned with efficiency of human of performance to categorize the components
resources (Becker & Gerhart, of HPHRPs. Consistent with previous defini-
the literature on 1996). The current study responds tions, the term HPHRPs is used to refer to a set
HPHRPs and HR
to this gap by investigating the of HR practices that are intended to enhance
impact of a strategic role for HR employees’ skills, motivation, and opportu-
professionals’ management in organizational nity to participate, and which, in turn, seek
financial performance. to improve organization performance.
strategic role. Given the importance of A strategic role for HR management is
consistency between what a role argued to enhance the effective utilization
purports to achieve and its actual impact, a of HPHRPs, which, in turn, increases finan-
strategic role for HR professionals should focus cial performance through increased human
on the achievement of organizational goals resource productivity. In addition to explor-
by aligning HR practices with business objec- ing this indirect relationship, this study also
tives (Conner & Ulrich, 1996). This alignment explores the moderating role of devolve-
necessitates the design and implementation ment of responsibility for HR practices to line

Human Resource Management DOI: 10.1002/hrm


THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 901

management in the relationship between the performance. The subsequent discussion ar-
HR strategic role and HPHRPs. Line manage- gues the moderating role of line management
ment devolvement is argued to increase the devolvement in this relationship and a mod-
operational integration of HR practices and erated mediated pathway between the HR
facilitate a strategic focus for HR professionals strategic role and organization financial
by reducing their responsibility for traditional performance.
HR practice execution and administration.
This study contributes to current research
HR Strategic Role, HPHRPs, and
in a number of areas. First, we respond to calls
to investigate the impact of the HR strategic
Financial Performance
role, and pathways through which this effect Dessler, Griffiths, and Lloyd-Walker (2007)
occurs. Previous research in SHRM has been argue that, ideally, the strategic partner role
criticized for its lack of theoretical and empir- incorporates HR as a full participant in both
ical work on the mediating, explanatory the development and operationalization of
pathways through which HR strategic fac- organizational strategies. This role requires
tors lead to firm outcomes (Becker & Gerhart, HR managers to support strategic HRM initia-
1996; Delery, 1998; Dyer & Reeves, 1995). tives by aligning HR goals, strate-
This study builds on prior research exploring gies, and practices with corporate
the impact of HR strategic role and is one of objectives and the implementa- Line management
the first to focus on HPHRPs as a mediating tion of business strategy
devolvement is
pathway explaining this effect. Moreover, (Andersen, Cooper, & Zhu, 2007).
this is one of very few studies to do so in a It also requires the participation of argued to increase
non-Western context (Bae & Lawler, 2000), HR managers in the strategic busi-
providing greater understanding of the utility ness planning process (Sheehan, the operational
of the HR strategic role in promoting finan- 2005), which means that HR man-
cial performance in non-Western contexts, agers have an active role in both integration of
especially developing countries. The empiri- strategy formulation as well as HR practices
cal data reported in this article comes from strategy implementation (DeCieri
Jordan, a developing country in the Middle et al., 2008). and facilitate a
East. A critical function for HR man-
A further contribution stems from the agers in a strategic planning role is strategic focus for
investigation of line management devolve- to build the organization’s human
HR professionals
ment as a moderating variable, enabling resources as a source of sustained
researchers, HR professionals, and managers competitive advantage (Barney & by reducing their
to understand the situations under which a Wright, 1997; Becker & Gerhart,
strategic role for HR professionals is more or 1996). This implies the incorpora- responsibility for
less likely to generate positive organizational tion of HR practices that contrib-
traditional HR
performance effects (H. T. Chang & Chi, ute to organizational performance
2007). By exploring a moderated mediating into the strategic decision-mak- practice execution
relationship, this study clarifies a key mecha- ing process (Huselid, 1995). In
nism that explains the influence of HR strate- their meta-review, Delery and and administration.
gic role, as well as identifying circumstances Doty (1996) identified seven such
that affect the operation of this mechanism. practices, which are consistently
depicted as HPHRPs. These practices are theo-
retically and empirically connected to orga-
Theoretical Background and
nizational performance and include practices
Hypotheses related to ability, such as training systems;
The following sections submit the rationale factors related to motivation, including
underlying the proposed relationships and results-oriented appraisal; and factors related
discuss how HR strategic role is linked to to opportunity, such as employee participa-
HPHRPs, which, in turn, is linked to financial tion programs.

Human Resource Management DOI: 10.1002/hrm


902 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013

A pivotal determinant of the adoption of which is likely to result in a greater rate of


HPHRPs is a perception of HRM in a strategic adoption of new HPHRPs (Howell & Higgins,
role as a legitimate mechanism to enhance 1990). The HR strategic practitioner is often
organizational performance. Those HR pro- depicted as an organizational change agent—
fessionals possessing a legitimate strate- a professional who is willing and sufficiently
gic role through their hierarchical position skilled to identify HR-related initiatives that
within an organization are likely to have will enhance organizational performance,
the authority, opportunity, and resources and enable and oversee their implementa-
to search for and adopt innovative HPHRPs tion (Beatty & Schneier, 1997; Russ, Galang,
(Gooderham, Nordhaug, & Ringdal, 1999; & Ferris, 1998). Therefore, while under-
Jennings, 1994). Equally important, as an HR researched, the connection between the HR
professional, is expertise in HPHRPs, which professional in a strategic role as a critical ele-
leads to the perception of “individual com- ment impacting the adoption of HPHRPs has
petence” (Walton, Allen, & Gaffney, 1987). considerable merit.
This, in turn, can enhance the ability to pro- Following this, we will hypothesize a pos-
vide valuable information to, and influence, itive relationship between the HR strategic
other strategic decision makers role and HPHRPs:
(Kane, 1994). A legitimate HR
A critical function strategic role, therefore, builds the Hypothesis 1: The HR strategic role is positively
credibility of HR-related initiatives related to HPHRPs.
for HR managers in (Bennett, Ketchen, & Schultz,
a strategic planning 1998; Galang, Elsik, & Russ, 1999). Strategic human resource management
Once legitimacy of the HR man- has been most concerned with the impact of
role is to build ager as a strategic partner is estab- HR strategies on organizational performance
lished, research indicates that (Boxall & Macky, 2007). The resource-based
the organization’s this will enhance influence over view (RBV) of the firm provides justification
resource allocation and decision- of the importance of human resources and
human resources
making authority. Possible ben- effective human resource management as a
as a source efits include a greater allocation source of sustainable competitive advantage
of resources and increased author- (Barney & Wright, 1997; Wright, Dunford, &
of sustained ity, both of which provide greater Snell, 2001). In particular, the RBV empha-
opportunities to drive the adop- sizes the role of HR practices in influencing
competitive
tion of HPHRPs (Coopey, Keegan, the human capital within organizations in a
advantage. & Emler, 1998; Galang et al., 1999; way that may lead to organizational success.
Kanter, 1988). This is supported Building upon the RBV, the nature of the
by previous studies that have relationship between HPHRPs and organiza-
highlighted the key role played by tional performance has become the focus of
senior management in the identification of the entire SHRM field (Boselie et al., 2005).
HR initiatives and priorities, and its resourc- Within this context, there is significant evi-
ing and support (Beer, 1997; Kane, 1994). dence for the link between HPHRPs and orga-
Similar support for the relationship nizational financial performance.
between the HR strategic role and HPHRP There is significant evidence that the range
implementation is provided in research into of practices comprising HPHRPs enhance pro-
innovation adoption and the role of innova- ductivity and, consequently, organizational
tion champions. Previous research provides financial performance. Ability-enhancing
evidence of the importance of champions in HR practices of staffing and training directly
the successful adoption of new HR practices influence employees’ ability to perform by
(Frost & Egri, 1991; Kanter, 1983). The HR affecting their knowledge, skills, and abilities
professional in a strategic role operates as a at work (Katou & Budhwar, 2010). Selective
champion, motivated to explore new policies staffing techniques are used to identify appli-
and practices to build HR-related capabilities, cants whose abilities are compatible with the

Human Resource Management DOI: 10.1002/hrm


THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 903

needs of the organization (Huselid, 1995), & Eastman, 1999), and absence rate (Marks,
and the provision of comprehensive training Mirvis, Hackett, & Grady, 1986; Wood & De
can lead skilled employees with capabilities Menezes, 1998).
that are honed to the particular requirements The previous discussion indicates that
of developing organizational technologies a positive relationship is likely to exist
(Arthur, 1994). Similarly, motivation-enhanc- between HPHRPs and financial performance.
ing HR practices have been linked to employee Accordingly, it is hypothesized that:
productivity and incorporated into previous
models of HPHRPs. For example, Batt (2002) Hypothesis 2: HPHRPs are positively related to or-
suggested motivational dimensions of a high- ganizational financial performance.
involvement HR system, which include high
relative pay and commitment to job security, We have argued that the HR strategic role
and Guest (1997) generates evidence to sup- is linked to HPHRPs, which in turn are linked
port the link between performance-related to performance. Based on these arguments,
pay and enhanced employee motivation. we reason that HPHRPs play a mediating role
Other motivation-enhancing practices men- in the relationship between the HR strategic
tioned in the strategic HRM literature include role and financial performance because HR
formal performance appraisal, skill-based professionals’ holding a more strategic role
pay, and group-based pay, which have all creates conditions conducive to the adoption
been linked to organizational performance of HPHRPs within organizations. Such adop-
(Guthrie, 2001; Huselid, 1995). The final tion of high-performance practices leads, in
component of HPHRPs, opportunity-enhanc- turn, to enhanced financial performance.
ing practices (Huselid, 1995), has also been Thus, we hypothesize the following:
positively linked to organizational outcomes.
The performance of highly skilled and moti- Hypothesis 3: HPHRPs mediate the relationship
vated employees will be limited if jobs are not between the HR strategic role and organizational
structured properly (Tsai, 2006). In particular, financial performance.
employees perform better at work when they
are offered a working environment that pro- Although a direct relationship between
vides the necessary support and the opportu- the HR strategic role and HPHRPs is hypoth-
nity to contribute (Boxall & Purcell, 2003). esized, a review of the literature on SHRM
Substantial research on the link between indicates that there are factors capable of
HPHRPs and organizational performance has moderating the HR strategic role–HPHRP
occurred worldwide since pioneering work relationship. An examination of moderating
was published in the mid-1990s (Becker & factors is especially important for a compre-
Gerhart, 1996; Huselid, 1995). In general, hensive understanding of this relationship
empirical research on the HPHRPs and per- and the conditions under which it applies
formance link has demonstrated that HR (Wright & Haggerty, 2005). One often-
practices are related to a set of organizational mentioned impediment to achieving success
performance measures (Wright & Kehoe, in a strategic role is the oppressive burden of
2008), and this has provided a basis for many administrative transactional tasks (Ulrich &
authors to promote the practical benefits Brockbank, 2005). Informed by these studies,
that can be gained from adopting HPHRPs devolvement of responsibility for HR practice
compared with the more control-based per- execution and administration to line manage-
sonnel approach (Tsai, 2006). In particular, ment is argued as a key factor influencing the
many empirical studies have shown positive impact of the HR strategic role on HPHRPs.
HPHRPs influence on a range of indicators The devolvement of HR practices, which
of organizational performance, including has been referred to as “downward inte-
financial performance (Huselid, 1995), employ- gration” of HRM (Zhu, Cooper, De Cieri,
ee productivity (Guthrie, 2001), turnover Thomson, & Zhao, 2008), is defined as the
rate (Arthur, 1994; Vandeberg, Richardson, involvement of line managers, commonly

Human Resource Management DOI: 10.1002/hrm


904 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013

referred to as supervisors, in the execution The significance of an increased HR role


and administration of HR practices (Budhwar, for line managers has been recognized by a
2000a, 2000b), including selection, training, number of researchers. Currie and Procter
and performance management. While some (2001) show that line managers hold impor-
authors, like Thornhill and Saunders (1998), tant roles in the realization of HR strategy.
state that the increased role of line managers Other research has connected the devolu-
in the management of human resources is a tion of HRM to line managers to financial
vital characteristic of any HRM model; others, performance. For example, Perry and Kulik’s
like Brewster and Larsen (2000), go further by (2008) study showed a positive effect of devo-
arguing that the devolution of HR responsi- lution on perceived people management
bilities to line managers is seen as a defining effectiveness.
issue in HRM since line managers’ actions Previously, we have argued that the
and behaviors are largely responsible for the HR strategic role enhances the adoption of
difference between intended and actual HRM HPHRPs, which, in turn, enhances perfor-
implementation. mance. Following this discussion, we also
Arguments for the moderating role of line argue that devolvement of HR practices to
management devolvement are line managers moderates this relationship:
based on the assumption that, if
The devolvement HR professionals are going to hold Hypothesis 4: Devolvement moderates the re-
a more strategic role, the day- lationship between the HR strategic role and
of more traditional HPHRPs.
to-day HR activities need to be
HRM activities decentralized and shifted to line
managers (Kulik & Bainbridge, We have argued that the HR strategic role
to line managers 2006). The devolvement of more is linked to organizational financial perfor-
traditional HRM activities to line mance through HPHRPs and that devolve-
allows HR managers allows HR profession- ment moderates the relationship between
professionals als to adopt a more strategic role HPHRPs and performance. Together this pro-
because it releases them from vides a rationale for a hypothesis of moder-
to adopt a more the more traditional and time- ated mediation:
consuming operational activities
strategic role (Conner & Ulrich, 1996; Ulrich, Hypothesis 5: Line management devolvement will
1997). In addition, numerous moderate the relationship between the HR stra-
because it releases
studies suggest the role of line tegic role and financial performance, such that
them from the more managers is important in ensuring the positive relationship between the HR strategic
effective implementation of HRM role and performance through HPHRPs will be
traditional and strategy and policies (Bhatnagar stronger at higher levels of line management de-
& Sharma, 2005). In particular, volvement than at lower levels of line manage-
time-consuming
the adoption of more commit- ment devolvement.
operational ment-oriented HPHRPs requires
line managers to be involved in
Methods
activities. the initiation and implementa-
tion of “high-performance” mod- Sample and Data Collection
els, especially when the actions
of line managers are the difference between Data were collected through a self-adminis-
intended and actual HR practices (Boxall & tered survey in the Jordanian private sector in
Purcell, 2008). Line management involve- the period from March to June 2009. The
ment in HPHRP execution and administra- sample was drawn from the Jordanian
tion ensures consistent application through Company Control Department database. The
integration with operational decision making sample included companies from both the fi-
and planning, as well as day-to-day adminis- nancial and manufacturing sectors. In total,
trative activities (Renwick, 2003). 176 participants were recruited in these

Human Resource Management DOI: 10.1002/hrm


THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 905

sectors. Only companies employing more nominate the source of information about
than 100 employees were included in this financial performance and we also nomi-
study. The decision to exclude organizations nated measures that were less open to sub-
employing fewer than 100 employees was jective interpretation: return on equity,
based on results of previous research in HRM, return on assets, sales growth, and market
which indicates that the larger the firm, the share. Previous research suggests that using
more likely it is to have a formal organiza- more objective and concrete measures is less
tional unit dealing with human resources as likely to be associated with bias (Podsakoff &
well as more formalized HR practices (Guthrie, Organ, 1986). In doing so, we aimed to bal-
2001; Huang, 2000). ance emphasis on objective measurement and
The questionnaires were completed by expert judgment in order to be comprehen-
the most senior manager responsible for the sive in our measurement of practices while
HR functions within the company. Of the 176 minimizing the risks that personal judgment
questionnaires distributed, 121 question- would reduce the reliability of our measure-
naires were returned. In total, 118 completed ments (Guest, 2001). This is supported by
and usable questionnaires were used in the research in strategic human resource man-
analysis, with a 66 percent response rate. agement, which argues that factual informa-
Responding companies represented tion, of which the respondent holds accurate
financial (41.5 percent) and manufacturing knowledge and which is potentially objec-
(58.5 percent) sectors. Of the organizations tively verifiable, does not pose serious prob-
that responded, the majority (74.5 percent) lems (Guthrie, 2001). The primary dependent
employed between 100 and 300 employees. variables (financial performance) in this study
More than 81 percent of the organizations reflect this type of measure.
had been in operation for more than five Finally, we followed empirical recommen-
years, and most of the organizations (88 per- dations for the use of a CMV marker (Lindell
cent) were locally owned. The majority of & Whitney, 2001; Richardson, Simmering,
respondents were male (82 percent) and had & Sturman, 2009). The marker variable was
less than 10 years of experience (92 percent) included in the middle of the survey. It was
in their current organization. chosen as the CMV marker because it did not
Based on previous literature (Gardner & have a strong theoretical connection to the
Wright, 2009), studies that collect data from predictor variables but was within the scope
a single respondent using the same method of organizational management. The marker
may be subject to potential common meth- variable chosen for analysis was low-cost
od bias. To reduce the potential for common strategy. A measurement scale developed by
method variance (CMV), a set of steps were Huang (2001) was used in this study for mea-
undertaken. In common with much previ- suring business strategy of innovation and
ous research (Guthrie, 2001), we chose to cost leadership.
ask the most senior person responsible for
human resource management to complete
Measures
the survey on the basis of required expertise.
Past research suggests that the most senior The questions used in the survey were drawn
HR manager is well placed to provide expert from previously validated measures. The
judgment on HR-related policy and practices double-back-translation method was used,
(Guthrie, 2001; Way, Lepak, Fay, & Thacker, whereby the questionnaire was developed in
2010). This is particularly true in our study, English language and then translated into
which required knowledge of the HR strategic Arabic by a certified translator, and then
management policy and also required under- back-translated into English. The question-
standing across a wide range of HR-related naire was then evaluated by a number of in-
management practices. dependent researchers in human resource
As an additional strategy to reduce the management in order to ensure content
risk of CMV bias, we asked respondents to validity.

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906 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013

Dependent Variable: Financial Performance (i.e., formal job analysis, recruitment, and
selection) and training and development prac-
This study adopted quasi-perceptual measures
tices (e.g., “How much importance is placed
of performance, which evaluate performance
on the staffing process in this company?”)
in objective terms (e.g., return on equity, sales
Six questions relating to motivation-enhanc-
growth, and profitability) through the subjec-
ing practices were designed to measure both
tive perception of managers (Ketkar & Sett,
performance management and compensa-
2009). Perception-based measures of perfor-
tion practices. Three scale items were used to
mance are widely used in the literature (e.g.,
measure performance management practices
Macky & Boxall, 2008; Shih, Chiang, & Hsu,
(e.g., “What proportion of employees receive
2006). Measures of financial performance
formal performance appraisals and feedback
were taken by asking respondents to compare
each 12 months?”). These items were adopted
their company’s performance with that of
from Flood et al. (2008) and Huselid (1995).
similar companies operating in the same sec-
Three items were used to measure compensa-
tor over the past one to three years. Responses
tion practices, taken from Flood et al. (2008)
were taken on a seven-point Likert scale rang-
and Snell and Dean (1992), including, for
ing from 1 (0 percent) to 7 (100 percent).
example, “How would you rate pay level in
this company relative to other companies?”
Predictor Variable: HR Strategic Role Finally, opportunity-enhancing practices
reflect communication and participation
HR strategic roles were measured using a scale practices. Six items were used to measure
derived by Conner and Ulrich (1996), fre- the opportunity-enhancing practices dimen-
quently used in similar research on HR mana- sion, taken from previous work by Flood et al.
gerial roles (Raub et al., 2006; Voermans & (2008) (e.g., “What proportion of employees
Veldhoven, 2007). are routinely administered attitude surveys to
Respondents were asked to refer to their investigate employee morale?”).
role as HR manager on six items that reflect
the HR strategic role. Respondents were asked
Moderator Variable: Devolvement
to indicate whether they agree or disagree
with each of these items on a Likert-type Based on Budhwar’s (2000a) study, devolve-
scale ranging from 1 (strongly disagree) to 7 ment was measured on the basis of three sets
(strongly agree). One item was reversed and of items: the primary responsibility with line
modified (“HR manager is seen as strategic managers for HRM, change of responsibility
partner” became “HR manager is not seen as of line managers for HRM, and the increased
strategic partner”). Negatively worded ques- training of line managers in HRM. The ap-
tions are recommended in order to reduce proach used by Budhwar is consistent with
pattern response bias (Hinkin, 1995). the approaches used by a number of authors
(Brewster & Larsen, 1992; Gautam & Davis,
2007; Larsen & Brewster, 2003; Perry & Kulik,
Mediating Variable: HPHRPs
2008; Zhu et al., 2008). The level of devolved
Based on extensive review of the literature, decision making in areas of HPHRPs was mea-
scales were developed for measuring the three sured by asking respondents to indicate the
HPHRP dimensions: ability-enhancing, moti- extent of line managers’ involvement in HR
vation-enhancing, and opportunity-enhanc- decisions regarding the following HPHRPs:
ing practices. All items measuring HPHRPs recruitment and selection, training and de-
were adopted from survey items used by velopment, performance management, com-
Flood et al. (2008), Huselid (1995), and Snell pensation, incentives, communication, and
and Dean (1992). All items were measured participatory practices. In addition, respon-
using a seven-point scale. dents were also asked the extent of an increase
Nine items were used to measure abil- of line managers’ responsibility with regard
ity-enhancing practices, including staffing to the same set of HR practices mentioned

Human Resource Management DOI: 10.1002/hrm


THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 907

earlier over the last five years. Finally, respon- Partial least squares (PLS) structural equa-
dents were asked to estimate the extent of tion modeling (SEM) was employed to analyze
line managers’ formal training to perform a the data. Partial least squares is increasingly
set of HR-related skills. used as an analytical technique, particularly
in health and organizational studies research
(Sosik, Kahai, & Piovoso, 2009). A number of
Control Variable
recent reviews of PLS structural equation mod-
Consistent with previous studies on perfor- eling have generated evidence supporting its
mance effect of HPHRPs (Arthur, 1994; advantages over covariance-based modeling.
Huselid, 1995), a number of organizational In particular, PLS SEM can be used to analyze
variables were included as potential control data from small samples, which is a factor per-
variables: company size, company age, com- tinent to the current study (Sosik et al., 2009).
pany ownership, and the sector within which Results of a Monte Carlo simulation indicate
the company operated. Company size was that PLS SEM was able to produce estimates
measured in terms of the number of working for a six-variable model with low Type-I error
employees. The control variable for company probability and satisfactory power, based on
age was in the form of the number of years a sample size of 17 (Majchrzak, Beath, Lim,
the company has been in operation in Jordan. & Chin, 2005). In addition, PLS is capable of
Company ownership reflects whether the producing more accurate coefficients when
company is foreign or locally owned. there is correlation between independent
variables (Sosik et al., 2009). PLS SEM pro-
vides information relating to measurement
Analysis and Results
and structural model components.
Means, standard deviations, alpha values, PLS SEM generates factor loadings for
and correlations for all variables appear in each scale item, which can be used to assess
Table I. All of the index reliabilities, as mea- the measurement model. A matrix of factor
sured by Cronbach’s alpha, exceeded the cut- coefficients is provided in Table II. The matrix
off point of .70 (Hair, Anderson, Tatham, & shows that all coefficients are greater than .6,
Black, 1998). except the sixth item for HR strategic role

TABLE I Means, Standard Deviations, and Correlations for Study Variables


Variables Mean SD Alpha 1 2 3 4 5 6 7
1. Financial 3.98 .96 .78
performance
2. HR strategic 4.41 .81 .82 .449**
role
3. HPHR 4.28 .82 .88 .660** .692**
4. Devolvement 4.44 .76 .92 .573** .686** .828**
5. Number of 2.35 .65 .547** .251** .396** .344**
employees
6. Company size 3.21 .77 .385** −.002 .248** .083 .589**
7. Company 2.15 .50 .005 .099 .103 .078 −.007 −.107
ownership
8. Company sector 1.42 .50 .069 −.084 .025 −.063 .133 .148 .191*
N = 118.
*Correlation is significant at the .05 level (two-tailed).
**Correlation is significant at the .01 level (two-tailed).

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908 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013

TABLE II Factor Matrix


Item HR Strategic Role HPHR Devolvement Performance
Strategic1 .72
Strategic2 .83
Strategic3 .77
Strategic4 .77
Strategic5 .77
Strategic6 .29
HPHRAbility1 .60
HPHRAbility2 .71
HPHRAbility3 .62
HPHRAbility4 .73
HPHRAbility5 .75
HPHRAbility6 .70
HPHRAbility7 .72
HPHRAbility8 .73
HPHRAbility9 .78
HPHRMotivation10 .60
HPHRMotivation11 .71
HPHRMotivation12 .71
HPHRMotivation13 .82
HPHRMotivation14 .82
HPHRMotivation15 .80
HPHROpportunity16 .79
HPHROpportunity17 .60
HPHROpportunity18 .75
HPHROpportunity19 .68
HPHROpportunity20 .58
Devolvement1 .64
Devolvement2 .65
Devolvement3 .71
Devolvement4 .70
Devolvement5 .68
Devolvement6 .74
Devolvement7 .75
Devolvement8 .76
Devolvement9 .71
Devolvement10 .70
Devolvement11 .69
Devolvement12 .71
Devolvement13 .78
Devolvement14 .77
Devolvement15 .74
Performance1 .81
Performance2 .82
Performance3 .81
Performance4 .77
Performance5 .75

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THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 909

TABLE III Average Variance Extracted df = 2, p = .61, GFI = .99, AGFI = .98, RMSEA
= .00, CFI = 1.00). Also, the high-order factor
Average Variance
Extracted (AVE)
model of devolvement (χ² = 69.31, df = 53,
p = .07, GFI = .91, AGFI = .87, RMSEA = .05,
HR Strategic Role .60
CFI = .98) showed a good fit.
HPHR .52 PLS SEM generates parameter estimates
Devolvement .52 for the structural model. Path significance
Performance .63 was assessed using bootstrapping, which gen-
erates t-test statistics for path coefficients.
Bootstrapping involves the generation of a
and the final item for HPHRPs, which were large number of random samples by sampling
removed from subsequent analysis. The fac- with replacement from the original data
tor coefficients presented in Table II indi- (Sosik et al., 2009). Following recommenda-
cate homogeneity within scales (Thompson, tions made by Chin (1998), 1,000 bootstrap
1997). Evidence of acceptable validity is samples were run to generate test statistics.
also provided in Table III, which shows the To investigate interaction (moderating)
Average Variance Extracted (AVE), or aver- hypotheses, a standardized cross-product
age squared loading, for each latent variable. interaction construct was computed and
To show acceptable validity, each construct included in the model as suggested for PLS
should have an AVE greater than 0.5 (Chin, analysis, and in common with approaches
1998). advocated for multiple linear regression
In addition, confirmatory factor analyses (Chin, Marcolin, & Newsted, 2003).
using AMOS were conducted to further inves- Our PLS SEM results, depicted in Figure
tigate the validity of the variables used in this 1, support all hypotheses. The PLS SEM data
study. These results suggest that the variables indicate a positive relationship between HR
measured are distinct constructs. Assessment strategic role and HPHRPs (β = .27, t = 4.1,
of model fit was based on multiple criteria, p = .00), and between HPHRPs and financial
which reflect theoretical and statistical consid- performance (β = .69, t = 7.5, p = .00). The
erations (Byrne, 2001). This study adopts the partial least squares analysis also revealed a
following indices to assess model fit: the chi- significant positive path coefficient for the HR
square (χ²), root-mean-square error of approx- strategic role interaction variable regressed on
imation (RMSEA), goodness-of-fit index (GFI), HPHRPs (β = .13, t = 2.1, p = .05).
adjusted goodness-of-fit index (AGFI), and PLS SEM does not provide a test for model
comparative fit index (CFI) (Hox, 2002; Kline, fit (Fornell & Bookstein, 1982); however, the
2005). The HPHRP model consists of three fac- R-square statistic has been argued to enable
tors: ability-enhancing, motivation-enhanc- researchers to approximate the model’s utility
ing, and opportunity-enhancing practices. by reflecting the extent to which independent
The improved CFA model for ability-enhanc- variables account for variance in the depen-
ing practices parameter showed satisfactory dent construct. PLS SEM generated an R2 of
fit (χ² = 26.52, df = 20, p = .14, GFI = .95, .70 for our model, which indicates that the
AGFI = .91, RMSEA = .05, CFI = .98), as did overall model accounted for 70 percent of the
the models for both motivation-enhancing variance in financial performance. According
practices (χ² = 10.70, df = 5, p = .06, GFI = to Chin (1998), this indicates good model
.96, AGFI = .89, RMSEA = .09, CFI = .98) and fit and suggests that the pathways predicted
opportunity-enhancing practices (χ² = 5.14, by our hypotheses were able to account for a
df = 5, p = .40, GFI = .98, AGFI = .95, RMSEA good proportion of all performance variance.
= .02, CFI = .99). The CFA model of financial The model is diagrammatically depicted in
performance measures achieved satisfactory Figure 1.
model fit (χ² = 3.57, df = 4, p = .47, GFI = In order to explore the data further, we
.99, AGFI = .96, RMSEA = .00, CFI = 1.00), as used ordinary least squares (OLS) regression
did the model for HR strategic role (χ² = .98, analysis. Tests of the first two hypotheses

Human Resource Management DOI: 10.1002/hrm


910 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013

Line Management
Devolvement

β = .13*

β = .27**
β = .69** Financial
HR Strategic Role HPHRP
Performance

*p < .05.
**p < .01.

FIGURE 1. Model of HR Strategic Role, HPHRP, and Line Management Develop-


ment Effects on Financial Performance

produced similar results to the PLS SEM. The Hypothesis 4. The OLS analysis revealed a
analysis revealed a significant positive path significant path coefficient for the interac-
coefficient for the impact of the HR strategic tion variable regressed on HPHRPs (β = .16,
role on HPHRPs (β = .26, t = 3.77, p < .00) t = 3.43, p < .00).
supporting Hypothesis 1, and a significant In order to explore the nature of this
path coefficient for HPHRP regressed on orga- interaction further, we used simple slopes
nizational financial performance (β = .76, computations and graphed the interactions
t = 7.49, p < .00), supporting Hypothesis 2. using high (1 SD above the mean) and low
Mediation was investigated using the causal (1 SD below the mean) levels of the modera-
steps approach to testing mediated effects tor, line management devolvement. These
(Kenny, Kashy, & Bolger, 1998). These results analyses revealed that the HR strategic role
support Hypothesis 3. Regression analysis was associated with HPHRP when line man-
found that the initially significant relation- agement devolvement was high (simple slope
ship between the HR strategic role and finan- = .32, t = 5.26, p < .00) but that the HR stra-
cial performance (β = .27, t = 2.89, p = .00) tegic role was not related to HPHRPs when
is weakened, and is not significant, when line management devolvement was at a low
HPHRPs are included in the regression equa- level (simple slope = .08, t = .94, p = .35),
tion (β = .08, t = .97, p = .17). In addition, as depicted in Figure 2. These results provide
the product of coefficients analysis, in this support for Hypothesis 4 by indicating that
case a Sobel test, revealed support for a medi- the HR strategic role impacts HPHRPs when
ated relationship between the HR strategic line management devolvement is high.
role and financial performance via HPHRP Hypothesis 5 posited that the indirect
(z = 3.23, p = .00). effect of HR strategic role on financial per-
To test Hypothesis 4, a standardized cross- formance via HPHRPs depends on line man-
product interaction construct was computed agement devolvement. To test moderated
for line management devolvement × HR stra- mediation, the data was investigated to assess
tegic role and included in the model as is whether the strength of the mediation via
usual in regression analysis (Aiken & West, HPHRPs differs across two levels (high and
1991). The results show that line manage- low) of the moderator, line management
ment devolvement moderated that impact of devolvement (Preacher, Rucker, & Hayes,
the HR strategic role on HPHRPs, supporting 2007). Moderated mediation is evidenced

Human Resource Management DOI: 10.1002/hrm


THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 911

et al., 2007). This technique involves testing


the significance of the indirect effect of the
HR strategic role at a range of values of line
management devolvement until the value of
the moderator is found for which the direct
effect becomes significant (α = 0.05). Table IV
shows the results of this investigation, which
indicate that, at line management devolve-
ment values above 4.1, the mediating effect
of HPHRPs is significant.

Discussion
The purpose of this research was to investi-
gate the impact of the HR strategic role on
organizational performance and the path-
ways through which this effect is generated.
To achieve this objective, this study investi-
gated the relationship between the HR strate-
gic role and organization financial perfor-
mance, the mediating role of HPHRPs, and
line management devolvement as a contin-
gency of this relationship. The results provide
support for a positive relationship between
the HR strategic role and organizational per-
FIGURE 2. Moderating Effect of Line Manage- formance mediated by HPHRPs. Results also
ment Development on HR Strategic Role Impact on support a moderating role for line manage-
HPHRPs ment devolvement on this relationship.

when the conditional indirect effect of HR


Theoretical Implications
strategic role on financial performance via
HPHRPs differs in strength across low and This study’s findings are important for several
high levels of line management devolvement reasons. First, although the HR strategic role
(Preacher et al., 2007). A statistical signifi- is widely discussed in the literature, extant
cance test was used to analyze the data. This empirical evidence about its value is limited.
applies Aroian’s (1947) exact standard error Our findings provide strong support for the
for indirect effects to compute a z statistic for argument that HR professionals’ holding a
the conditional indirect effect. Again, high more strategic role can lead to significant
and low line management devolvement were benefits at the firm level. This suggests that
operationalized as 1 standard deviation above investing more in strategic HRM is an appro-
and below the mean, respectively. The results priate strategy for organizations to gain com-
of this analysis indicate that the relationship petitive advantage.
between the HR strategic role and financial Second, our study is unique in that it
performance via HPHRPs was weaker when provides empirical evidence for the mediat-
line management devolvement was low (z = ing role of HPHRPs on the effect of the HR
.95, p = .34) and stronger when line manage- strategic role on performance. From a theo-
ment devolvement was high (z = 3.74, p < retical perspective, the results contribute to
.00). This analysis supports Hypothesis 5. previous research into the value of strategic
To investigate this effect further, an exten- human resource management. Our research
sion of the Johnson-Neyman technique to focus on the pathway through which the HR
moderated mediation was applied (Preacher strategic role generates its impact represents a

Human Resource Management DOI: 10.1002/hrm


912 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013

TABLE IV Conditional Indirect Effect at Range of Values of Line Management Devolvement


Line Management Devolvement Value Z Statistic Significance
3.2 .02 p = .98
3.7 1.08 p = .28
4.1 1.96 p = .05
4.5 2.94 p = .00
5.1 3.65 p < .00

pioneering study in this area. We demonstrate high-performance HR practices will be suc-


that the HR strategic role has implications on cessfully implemented, and that this is a
the adoption of innovative high-performance critical mechanism through which stra-
human resource practices and, through this, tegic HRM enhances organizational—
financial performance. This suggests that the particularly financial—outcomes. By specify-
position of the HR professional as a strate- ing an important moderator of this relation-
gic partner enhances the legitimacy of HR ship, we integrate three key SHRM constructs
initiatives while also facilitating the resourc- into a comprehensive model of HR strategic
ing and broad top management support for effect. Our model clarifies the mechanisms
their implementation. Our results also pro- through which, and circumstances under
vide enhanced understanding of the anteced- which, a strategic approach for HR manage-
ents to HPHRP adoption, and direct future ment can be successfully adopted. Our model
research to undertake a more comprehensive does not support a simple, direct effect of the
investigation of the impact of strategic lead- HR strategic role on financial performance,
ership on the effectiveness of HPHRPs and which may account for previous ambiguous
their implementation. findings related to its organizational impact.
Third, our findings enhance our under- In addition, by specifying the indirect path-
standing of the moderating role of devolve- way through which a strategic role of HR
ment on the indirect effect of the HR strategic managers enhances organizational perfor-
role on adopting HPHRPs. Historically, HR mance, this study validates the utility of com-
professionals spent more time on administra- plex mediating and moderated relationships
tive HRM, but more recently, researchers have in predicting HR strategic impact. This has
stressed the need for HR work to be shared significant implications for future research
between HR professionals and line manag- into SHRM, which should encompass indi-
ers (Brewster, Mayrhofer, & Morley, 2000; rect and contingent models of effect.
Renwick, 2003). Our research provides strong
support for this approach and suggests that
Managerial Implications
sharing HR activities with line managers pro-
vides more opportunity for the increased use The modern business environment generates
of HPHRPs in organizations. This is consistent pressures for organizations to constantly im-
with previous arguments that the adoption of prove their processes and work structures.
more commitment-oriented HPHRPs requires Developing and implementing new ways of
line managers to be involved in the initiation doing work enable an organization to en-
and implementation of “high-performance” hance its performance. The findings of this
models (Boxall & Purcell, 2008). study suggest that HR professionals need to
In conclusion, the findings of this recognize that their role as strategic partners
study make a valuable theoretical con- should incorporate the implementation of
tribution by demonstrating that HR stra- HPHRPs into the strategic planning process.
tegic input enhances the likelihood that These practices are required in order to

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THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 913

enhance employees’ ability, improve their Namazie, 2003). Such difficulties have been
motivation at work, and increase their par- shown to exist in Arabic countries; for exam-
ticipation and involvement. This is particu- ple, Al-Husan, Brennan, and James (2009)
larly important for organizations as they are found that the implementation of HPHRPs
seeking new ways to compete and to respond in a privatized Jordanian utility, including
to pressures from the external environment. enhanced performance appraisal and train-
This research points to the moderating role ing responsibilities and devolution of respon-
of line management devolvement and sug- sibility for HR practices to line management,
gests that a strategic role for HR professionals met with resistance and staff discontent.
is dependent on having reduced administra- Therefore, while this study indicates the ben-
tive HR responsibility. Thus, one of the impli- efits of devolution, and suggests that devolu-
cations of this study is the need to support tion is a critical element in successful SHRM
the trade-off between a strategic and opera- enactment, its implementation requires care-
tional focus that was suggested in previous ful management and support.
research (Cleland et al., 2000; Papalexandris A valuable feature of this research relates
& Panayotopoulou, 2005). For HR profession- to its empirical setting. There is significant
als, it is important to devolve HR work to line empirical support to uphold the
managers in order to be able to advance into importance of the HR strategic
a more HR strategic role within the organiza- role and HPHRPs for financial
While this study
tion. Only then will HR practices be upgraded performance across different orga-
to the more innovative HPHRPs. nizational setting in Anglo-U.S. indicates the
However, past research has emphasized samples (Delery, 1998; Guthrie,
the potential pitfalls associated with line 2001; Huselid, 1995). Our benefits of
management devolution of HRM practices. research allows these findings to
devolution, and
Much evidence suggests that line manage- be extended to a novel empiri-
ment resistance to increased HRM-related cal setting, Jordan. In doing so, suggests that
responsibility is likely to dilute, and poten- the findings reinforce the valid-
tially undermine, efforts to translate HRM ity of the contention that strate- devolution is a
policy into effective practice (Thornhill & gic HRM practices can help create
Saunders, 1998). This is potentially amplified distinctive competencies that are critical element in
by the lack of involvement of line managers a source of sustained competitive successful SHRM
in the design of HR policies (Harris, Doughty, advantage for Jordanian compa-
& Kirk, 2002), which means that operational nies (Barney, 1991). enactment, its
impediments to their implementation may However, this empirical contri-
be unforeseen (Whittaker & Marchington, bution raises some issues regard- implementation
2003). Many studies have reported inade- ing generalizability. While not
requires careful
quate training provided to operational man- a limitation, the study findings
agers (Priestland & Hanig, 2005), and the may not be generalizable out- management and
absence of a supportive climate and enabling side Arab countries due to differ-
systems and structures (Guest, Conway, & ences between Arab, Eastern, and support.
Dewe, 2004). Operational demands tend Western contexts. The existing
to be prioritized by line managers, which literature highlights a number of
results in them taking a minimalist approach HRM-related studies focused on the Middle
to HRM (Whittaker & Marchington, 2003). East region (Agnala, 1997; Al-Rasheed &
These issues may be amplified in Arab coun- Al-Qwasmeh, 2003). Much of this research
tries. Organizations can experience difficul- explores the influence of Arab culture
ties in successfully importing Western human (Al-Faleh, 1987; Bakhtari, 1995) and Arab
resource policies and practices into operations value systems (Elsayed-Elkhouly & Buda,
based in developing countries because of a 1997) on management practices and manage-
range of institutional and cultural barriers ment systems. Some studies have examined
(Aycan, Al-Hamadi, Davis, & Budhwar, 2007; issues related to the transfer of management

Human Resource Management DOI: 10.1002/hrm


914 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013

practices from Western countries to the Arab Limitations and Suggestions for
region, including Jordan (Al-Husan et al., Future Research
2009; Anwar, 2003). In combination, this lit-
erature indicates that Jordan is likely to have Like all research, this study has a number of
management systems that are sensitive to limitations. A limitation of this study is that its
cultural norms and may traditionally limit sample provides a restricted basis for generaliz-
participation in decision making (Tayeb, ing our findings. This study focused on firms in
1997). However, while past studies indicate two industries in Jordan. The focal setting may
similarities in management practices exist limit the generalizability of the findings to or-
across Middle Eastern countries, there is also ganizations within this national context. In ad-
considerable variation across countries. Since dition, the sample size was relatively small and
the mid-1990s, the levels of state ownership we investigated moderated relationships. Both
in several Middle Eastern countries, includ- the small size of our study sample and the focus
ing Jordan, have been significantly reduced on moderation increase the risk that significant
due to a process of privatization (Budhwar & relationships will not be detected (McClelland
Mellahi, 2007). This has led to an economic & Judd, 1993). However, we received good sup-
system where market-driven port for all of our hypotheses and our overall
forces rather than government- model. Given that the detection of moderation
sponsored and government-pro- is particularly constrained by small sample size
Our study provides tected initiatives drive the econ- (Cohen, 1988), the results indicate some ro-
omy. Jordanian research reports bustness in our findings.
guidance for top a focus on competitiveness by A second limitation of this study, frequently
investing in human resource observed in survey-based research, is bias asso-
management by
development and training (Yaghi, ciated with common method variance (CMV)
reinforcing the Goodman, Holton, & Bates, (Podsakoff, MacKenzie, Lee, & Podsakoff,
2008). There is also some recent 2003). We acknowledge that Gerhart, Wright,
utility of strategic evidence that Jordan continues to Mahan, and Snell (2000) highlighted the risks
adopt and develop contemporary associated with single-source methods of data
partnership with HRM practices, although some of collection. These authors also state, however,
the organization’s these are at a preliminary stage that bias is more likely in large firms in which
(Al-Husan & James, 2009). This practices and human resource systems are likely
HR professional suggests that, while the findings of to vary considerably. While their mean organi-
this study represent an important zational size was 40,000 employees, the data in
function. contribution to our understand- the current study was generated from smaller
ing of HPHRPs, particularly in an organizations, the majority of which employed
Arab setting, additional study uti- between 100 and 300 people. There is support
lizing more diverse sample speci- for the argument that smaller firms are unlikely
fications, across Arabic, Eastern, and Western to feature significant within-firm variation
countries, will increase the generalizability of in practices and systems, which is likely to
our conclusions. improve reliability (Huselid & Becker, 2000).
In summary, our study provides guidance In addition, previous research indicates
for top management by reinforcing the util- that CMV is less of a concern for studies with
ity of strategic partnership with the organiza- a moderation effect (Schriesheim & DeNisi,
tion’s HR professional function. Further, the 1981). The logic is that common method
pivotal role of line management involvement bias should be present regardless of the level
in HPHRP execution and administration pri- of the moderator. It follows that when the
oritizes systematic training for operation man- relationship between the predictor, mediator,
agement and the utilization of supports such and dependent construct varies depending
as HRM IT systems, which have been shown on the moderator, as in our study, responses
to facilitate day-to-day HR administration are unlikely to be the result of using the same
(Ruel, Bondarouk, & Van der Velde, 2007). method—participants have not rated all

Human Resource Management DOI: 10.1002/hrm


THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 915

items similarly as is evident when self-report Our research focused on the frequently
CMV threatens data validity (Schriesheim & utilized outcome measure of organiza-
DeNisi, 1981). Moderation models are also tional financial performance. While this is
less likely to risk bias from participants’ the- a robust measure of managerial importance,
orizing about predicted relationships. This the relationship between the HR strategic
risk is more likely in simple linear models role, HPHRPs, and organizational outcomes
(Harrison, McLaughlin, & Coalter, 1996). beyond financial performance is also war-
One approach advocated to minimize com- ranted—for example, investigating the
mon method bias is to specify relationships impact of the HR strategic role on employee-
among the dependent and predictor variables level performance such as employee satisfac-
that are complex and therefore not likely tion and voluntary turnover. The potential
to be part of the individual raters’ cognitive effect of different HR roles, such as change
maps. Our moderated mediation model is, agent, employee champion, and adminis-
therefore, likely to reduce the risk of bias asso- trative expert, on organization performance
ciated with respondents’ theorizing, because also merits further exploration, as are the
such a complex relationship is not likely to potential contributions of each role to orga-
be part of the respondents’ theory in use nizational performance. Finally,
(S. J. Chang, Van Witteloostuijn, & Eden, 2010). while we investigated the effect of
Finally, to address the issue of potential devolvement as an important con- While we
common method bias empirically, we used tingency factor in the relationship
investigated
a CMV marker variable (Lindell & Whitney, between the HR strategic role and
2001; Richardson et al., 2009). Analysis using the adoption of HPHRPs, there are the effect of
the CMV marker variable indicated that the other important contingencies
partial correlation coefficients for all predic- that may influence this relation- devolvement
tor and dependent variables remained statis- ship, such as top management
tically significant (p = .00 for all correlations) support and IT support. Further as an important
when the marker variable was controlled. In research should thus investigate contingency factor
addition, we used a Harman one-factor test other contingencies affecting this
(Podsakoff & Organ, 1986). All scale items used relationship. in the relationship
to measure the predictor variables were entered Despite these limitations, the
into a principal components factor analysis, findings reported here suggest between the HR
and the results of the unrotated solution were that there is important research
strategic role and
explored. Four factors were identified with an potential in investigating the role
eigenvalue greater than 1, and no single fac- of coupling of an HR strategic role the adoption of
tor accounted for the majority of variance. with the devolvement of respon-
This suggests that common method variance sibility for HR execution to line HPHRPs, there are
is not a significant issue in this study. If com- management. This study also indi-
other important
mon method variance is a significant issue, it cates that our understanding of the
is likely that a single factor would emerge or impact of the HR strategic role and contingencies that
one general factor would account for a major- HPHRPs is significantly enhanced
ity of variance (Posdakoff & Organ, 1986). by investigating complex mediat- may influence this
While the risk of bias is acknowledged and ing pathways, and also reinforces
relationship, such
has been addressed by the authors, we also the merit of investigating relation-
recognize that there is a growing acceptance ship contingencies. Furthermore, as top management
of research indicating that CMV is unlikely to the value of undertaking this
invalidate study findings, particularly in the research in Jordan is considerable. support and IT
investigation of complex models (Crampton The findings provided evidence
& Wagner, 1994; Doty & Glick, 1998; Spector, for the applicability of theory and support.
2006). We acknowledge, however, that self- previous empirical work in a non-
report methods may be considered a limita- Western context, particularly the
tion to this study. Jordanian context.

Human Resource Management DOI: 10.1002/hrm


916 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013

REBECCA MITCHELL received her PhD from the University of Sydney, Australia, and
is an associate professor at the University of Newcastle, Australia. She is involved in a
range of international research collaborations in the area of organizational behavior and
human resource management, with a focus on professions and professional roles.

SHATHA M. OBEIDAT received her PhD from the University of Newcastle, Australia, and
is an assistant professor of HRM at Yarmouk University in Jordan. Her research interests
focus on human resource management, including the role of high-performance human
resource practices and e-HRM on organizational performance.

MARK BRAY works at the University of Newcastle, Australia, in the Faculty of Business
and Law. He has held the Foundation Chair in Employment Studies at the University of
Newcastle (Australia) since 1997. His research focuses on industrial relations, particularly
in Australia, and the role of human resource management in organizational performance.

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