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What is This?
450868
garajaHuman Resource Development Review
HRD12210.1177/1534484312450868Ala
Meera Alagaraja1
Abstract
A systematic review of literature on the relationship of human resources (HR) and
organizational performance (OP) revealed a dearth of contribution from human resource
development (HRD) in establishing the linkage.This linkage, which refers to the significant
relationship between HRD and OP, is an important topic relevant to research and
practice. The review utilized OP as the dependent variable to survey the state of human
resource literature and thus, includes contributions from human resource management
(HRM).The literature review revealed similarities and differences in the conceptualization
of OP as a dependent variable between the two fields. On further analysis, the similarities
and differences reveal convergence in specific areas of inquiry as well as emphasize
the underlying differences in the philosophical assumptions of HRD and HRM. The
independent contributions of HRD and HRM in establishing the HROP linkage also
reflect the utilization of diverse research designs, methods of data collection, analysis, and
findings. Both fields have focused on strategic contributions for improving organizational
performance and are very much connected in practice. Much of the separation therefore,
appears to be academic where competing views highlight a tension that exists in theory,
research and what we know about effective HRD or HRM in practice.
Keywords
human resource development, human resource management, organizational performance
Introduction
Senior executives consistently profess the importance of human resources (HR) in
enhancing organizational performance (OP). The HR function, as a significant con1
Corresponding Author:
Meera Alagaraja, Workforce & Human Resource Education Program, Department of Leadership,
Foundations & Human Resource Education, University of Louisville, KY 40292, USA.
Email: meera.alagaraja@louisville.edu
Downloaded from hrd.sagepub.com by guest on November 3, 2014
118
Purpose Statement
As noted by Ruona and Gibson (2004), the distinction between human resource development (HRD) and human resource management (HRM) fields is blurring. Both
fields have established HR as an important function in organizations. However, they
disagree on the definition, role of HR in organizations and how to study that role.
Each field focuses on different questions and provides unique understanding and perspectives about HR. Although scholars view these as competing perspectives, the
increasing complexities in organizational contexts underline the need for drawing on
the contributions of the two fields. This article argues for a pluralistic approach in
treating HRD and HRM perspectives as complementary, and doing so provides an
enriched understanding of HR in the scholarship and practice of HRD/M (human
resource development and management). To demonstrate this, I build a case using
literature from HRD and HRM by addressing HRD/M linkage to OP. Examining the
link between OP and HRD/M is important and useful for assessing the value and
impact of HR in organizations. The article compares and contrasts HRD with HRM
from multiple perspectives such as ontology, epistemology and how the fields are
understood (as a construct and/or as a practice). The article outlines some of the
significant differences in understanding OP, how those differences developed, the
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Alagaraja
Selected definition
120
Keyword search
HRD, organizational
performance
HRM, organizational
performance
ABI/
INFORM
16
39
30
163
232
decisions with respect to the search strategy. The first decision involved the selection
of keywords that were defined at the outset to reduce researcher bias. The following
keywords were selected for conducting the search in HRD and HRM literatures,
respectively: HRD, OP and HRM, OP. The key-word search was performed using
Google Scholar to conduct a preliminary assessment of the extent and scope of the
review. The search furnished 32,300 results for HRM and 14,400 results for HRD. In
order to manage the review process, a second decision was made to exclude practitioner reports, books, and other Internet outlets and narrow the list to peer-reviewed
publications. The third decision was made to maintain consistency in the search findings. Thus, three databases (ABI/ Inform, EBSCO and SSCI) were commanded to
refine the search linking HRD/M to OP. All the databases were accessed through
online library resources. The fourth decision involved the development of a review
protocol to further refine and narrow the final selection of articles for conducting the
review and is presented in the next section.
As mentioned before, the search was conducted separately for HRD and HRM. The
search results were not limited to a specific date range to ensure full coverage of the
topic. The keyword search was performed in the abstract and/or in the article title. This
was to ensure that the central line of the research inquiry was consistent with the focus
of the literature review. The final list of articles was reviewed, and any redundancies in
the citations were removed. The results were verified by using peer member checking
to ensure robustness of the review protocol. This was the last step in the refinement and
selection of the final tally of the articles before performing the systematic review. Table
2 describes the search results across each database and the final count of articles that
were included for the review.
In addition to the articles identified using the above criteria, the HRD/M and OP
landscape was carefully scanned to include seminal reviews of HRD and HRM literature. These articles helped the researcher develop an understanding of the important
debates and scholarly conversations on the topic in both HRM and HRD. In addition
to ensuring the robustness of the literature review process, the reference sections in the
seminal reviews (Arthur & Boyles, 2007; Becker & Huselid, 1999; Combs, Liu, Hall,
& Ketchen, 2006; Ferris et al., 1998; Garavan, Morley, Gunnigle, & McGuire, 2002;
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Garavan, ODonnell, McGuire, & Watson, 2007; Jacobs, 2003; Kuchinke, 1996, 2003;
Lengnick-Hall, Lengnick-Hall, Andrade, & Drake, 2009; McGuire, ODonnell, &
Cross, 2005; Swanson, 1995; Wood, 1999; Wright & Boswell, 2002) were culled and
compared to the overall publication pool that was laid out for review and analysis. It
became apparent that fewer studies examined the HRD role in the OP area (16). The
review of articles pertaining to the HRM -OP linkage, on the other hand, revealed a
larger set of articles (232). The researcher made two decisions with respect to the
analysis of the articles. The first decision related to the coding of the articles separately
for the two fields. The thematic results from the analysis of HRM articles were not
unique and in fact have been widely reported in the HRM literature (Arthur &
Boyles, 2007; Becker & Huselid, 1999; Combs et al., 2006; Wright & Boswell,
2002). Despite the dearth of articles on the topic in the HRD literature, the contributions reveal a range of theoretical streams that reflect evolving interests, a general
degree of confusion on what constitutes HRD, the intended audiences, and beneficiaries (Garavan et al., 2002, p. 9; McGuire, Garavan, ODonnell, & Watson, 2007).
The first decision thus, entailed a close examination of the meaning of HRD/M and
how it is studied. The second decision related to how OP is studied in HRD/M. Any
substantive differences from this analysis were likely to surface underlying assumptions and values that define HRD and HRM. Variations if any, in the understanding
of OP would be valuable in building knowledge and improving the practice of HRD.
In the following section, the analysis of the articles identified from the literature
review process is presented.
Coding scheme
Most scholars agree that OP is critical in the study of HRD and HRM in organizations.
The adoption of OP as a common variable opened up a new line of interpreting the
fundamental issues of how HRD and HRM scholars view HR in organizations. The
empirical articles identified for the study guided the initial development of coding and
category development in the literature review. The abstract from the final list of articles were coded separately for HRD and HRM.
The initial coding adopted a chronological perspective in tracing the evolution and
growth of the fields. Scholars hold different ontological views regarding each field
(HRD and HRM). They also adopt different epistemologies for conducting research on
the HRD and HRM linkage to OP. Based on the purpose of the systematic review, a 2
2 matrix was developed to assist the analysis. This organizing system (Table 3)
helped in deriving the major themes of the study.
The four cells from Table 2 form the four main themes from the literature. Each cell
provides an unique but incomplete understanding of HR in organizations. By combining the insights from the four cells, the article hopes to provide a fuller understanding
of areas of scholarship, which will benefit both fields and the practice of HR in organizations. The article begins by presenting the ontological views of HRM and HRD
122
Epistemology
HRD in relation to
organizational performance
HRM in relation to
organizational performance
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HRM as a System
In recent years, several mediating constructs that enable or inhibit HRM system
impact on OP have been identified. Becker, Huselid, Pickus, and Spratt (1997) recommended that HR departments direct their interest on macro-level business outputs and
develop a systemic perspective since traditional HR role expectations appeared to have
no apparent connection to OP. In Guests (1997) HR model, two intervening
constructsHR outcomes (commitment, quality, and flexibility) and behavioral
outcomes (effort/motivation, cooperation, involvement, and organizational citizenship)
linked HR strategy and practices to firm-level performance outcomes. While developing an HR -firm performance model for software companies, Paul and Anantharaman
(2003, p. 1249) defined a set of intervening variablesemployee competence, teamwork, organizational commitment and customer orientationto render causal linkages between HR practices and a firms performance (operational and financial).
HRM practices aligned closely with organizational strategy reported higher financial
outcomes (Delery & Doty, 1996; Huselid, 1995; Youndt, Snell, Dean, & Lepak,
1996).
Although no single HR practice was found to have a direct causal connection with
financial performance (Becker & Huselid, 2009), several HR practices, such as training, job design, compensation, and incentives, directly affected operational performance measures, namely, employee retention, employee productivity, product quality,
speed of delivery, and operating cost. Of these, operational measures, employee retention, and, to some extent, employee productivity have been traditionally associated
with HRM system outcomes, although these and a few individual HRM practices (job
design, work environment) are dependent on enterprise-level dimensions such as organizational strategy and business orientation.
HRM structure and design is determined by the organizations business and strategic initiatives (Becker & Huselid, 1999). As a formal system, HRM provides an
important foundational support for training and performance. Although the quality of
HRM system and outcomes is dependent on organizational-level business initiatives,
scholars have taken the approach that HRM as a system is an important component
that can help an organization become more effective and achieve competitive advantage (Becker & Huselid, 1999). A related perspective has framed HRM systemfirm
performance linkage as a process through which a set of intervening variables are
generally aligned in ways to ensure that the HRM system is a source for competitive
advantage (e.g., Becker & Gerhart, 1996; Wright, McMahan, & McWilliams, 1994).
Wright and Snell (1998) linked HRM practices to strategy by demonstrating a case
of sustainable fit of HRM practices with company strategy. HRM practices aligned
closely with organizational strategy reported higher financial outcomes (Delery &
Doty, 1996; Huselid, 1995; Youndt et al., 1996). There is a lack of consensus on what
constitutes HR systems or practices and how these individually or as a combination
define the construct of HRM (Paauwe & Boselie, 2005). Different themes emerging
124
from the literature review HRM as best practices (Delery & Doty, 1996) or consider
internal fit. While Boxall and Purcell (2003) argue the case for emphasizing both best
practices and the internal fit approach. Wood (1999) noted internal, organizational,
environmental, and strategic fit as four different types of fits that consider different
linkages in establishing HR contribution to firm performance.
The HRMOP linkage shaped the agenda of the HRM field in the 1990s and
asserted the value and impact of HR in organizations. In addition to improving our
understanding of the linkages between HRM and OP, the empirical conversations significantly influenced the formulation of strategic role for HR in organizations. The
HRM discipline reframed the traditional role of HR departments from a maintenance/
administrative function to that of a strategic business partner. The intellectual roots of
the field suggest that HRM contributions emphasize fuller integration of micro- and
macro-level approach theories and analysis linking HR with organizational-level performance outcomes. This is an important perspective on the role and contribution of
HR to the bottom-line performance in organizations. The underlying assumption of
HRM suggests that the field values the managerial paradigm in that HR policies, practices, and systems are designed to enhance organizational and individual performance.
Thus, investments in human capital benefit the performance of the organization. This
overarching philosophy is also important to understand from an HRD perspective. In
the following section, HRD perspectives on the linkage to OP are discussed.
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lacking (Katou, 2009). This is not a flaw, as HRD researchers highlight multilevel
(individual, team, organizational) perspectives to establish the linkage to OP. This is
in sharp contrast to the HRM field, which emphasizes a different vantage point.
126
practices, there is some similarity as both fields have investigated T&D practices
extensively. In addition to this, three other practices (compensation, performance management, recruitment and selection) were reviewed extensively in the HRM literature.
However, these practices may have different levels of impact on OP since HRM or
HRD systems have been understood differently and are not comparable. This is especially true when comparing best-practices and best-fit concepts in both literatures.
These concepts should be considered carefully in comparisons because the best-fit
concept carries the influence of organization and the HRD/M or HRD practices on OP.
Although scholars have argued that both concepts may be right in their own way
(Boxall & Purcell, 2003), the best-fit approach highlights the importance of external
and internal organizational contexts in the design and effectiveness of HRD/M best
practices in the workplace (Paauwe, 2005). However, both approaches are important
in exploring the HRM and HRD linkage to OP.
Therefore, it is not surprising that OP is a common thread in comparing the research
and practice of HRD or HRM in organizations. Some scholars have also used the term
firm performance. Although the article does not view firm performance as an alternative concept to OP, the two phrases have been used interchangeably in HRD and HRM
literature. It is interesting that both HRD and HRM scholars define OP using different
sets of indicators. These divergent explanations represent different epistemologies in
the study of HR in organizations. An analysis of how OP is defined, understood, and
studied by HRM and HRD literature is presented in the next section.
Epistemological Differences
in Studying Organizational Performance
OP has been addressed in a broad manner in the management sciences. These descriptions help in defining as well as identifying universally accepted perspectives of OP.
Since OP is a common variable in the management sciences, this section presents
generally understood perspectives of OP in the management literature.
Early conceptualizations of OP in the management sciences describe OP (a) as a set
of goals of the organization such as profitability and turnover (Etzioni, 1964), (b) internal and external resources utilization (Yutchman & Seashore, 1967), and (c) fulfilling
internal and external stakeholders needs (Thompson, 1967). These descriptions were
useful in developing comparisons between HRM and HRD perspectives on OP. The
insights gained from this examination would be valuable since these variations have not
been explicitly discussed in the HRD literature. The new insights would also enhance
the value of HRD practice in an increasingly complex global context. In what follows,
HRM and HRD perspectives on OP are compared and contrasted. These perspectives
add value, expand, and enrich our understanding of research, theory, and practice of
HR in the HRD and HRM literature. They also stimulate future avenues of research
and practice and spark debates on the further evolution of the two fields. The next section discusses how OP is studied in HRM.
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130
inquiry has seldom moved beyond individual and team processes, structuring interventions at these two levels, and long-term emphasis on training, learning, and development. As the literature demonstrates, the connection of human effort to organizational
outcome can be tenuous. Multilevel empirical research demonstrating cause at one
level (person) and effect at another (organization) is complex. It is not necessarily a
flaw or gap in HRD literature because the discipline and its foundations are not as
focused as HRM on OP outcomes. This is an important and fundamental issue that is
discussed in the following section.
The analysis of the literature review considered the following measures of OP in
HRM: productivity, market performance, organizational turnover, financial performance, profitability, sales growth, and quality. The following measures of OP were
considered in HRD: turnover intention, learning organization characteristics, and
strength of HR orientation. The measures with respect to HRM refer to ultimate measures in the HRMOP relationship, the measures with respect to HRD refer to mediation measures in the HRDOP relationship. It is apparent that the performance
outcomes of HRD are captured through the use of mediation measures. In contrast,
HRM utilizes financial outcomes (profits, sales, market share, Tobins q, GRATE),
organizational outcomes (productivity, quality), and mediation measures similar to
HRD (satisfaction, commitment, and turnover intention) to conceptualize OP. In the
next section, I discuss the key findings from the literature review highlighting the differences in approaches in the two fields in identifying and exploring the dependent
variable and the underlying philosophies that guide and inform them.
Discussion
The scholarly conversations pertaining to HRD definitions reveal divergent perspectives in understanding the role of HRD at multiple levels of the organizations (and at
the national level) for the purpose of enhancing learning and performance. Given the
multiplicity of perspectives in HRD, numerous theories and theoretical frameworks
thus, inform the field and continue to energize the scholarly conversations that expand
the field. In comparison, the HRM focus is concerned with the scholarly debates over
the best-practice versus best-fit approach, the components of the HRM system, the
inclusion of different employee groups, and the perceived effect of practices (Paauwe,
2005). Three theoretical frameworks dominate and inform these HRM concerns: the
contingent framework, which suggests that HRM influences performance in relation
to contextual factors from the external environment such as business strategies (Schuler
& Jackson, 1987); the resource based view, which asserts that HRM influences performance according to the human and social capital held by the organization (Barney,
1995); and the AMO theory, which asserts that HRM influences performance in
relation to employees ability, motivation, and opportunity to participate
(Appelbaum, Bailey, Berg, & Kalleberg, 2000). In contrast to HRM, seminal conversations in HRD reveal that the theoretical frameworks and theories are too numer-
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Methodological Differences
Different data designs produce different results (Wright, Gardner, Moynihan, & Allen,
2005). Thus, when data designs are categorized into (a) predictive (i.e., practices are
not measured before the performance period), (b) post-predictive (i.e., practices
are measured after the performance period), (c) contemporaneous (i.e., practices are
measured contemporaneously with performance), and (d) retrospective (i.e., prac-
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tices are measured based on past performance period), they contribute to variations in
the findings on the linkage between HRM, HRD and OP. Thus, methodological differences produce mixed results. In this section, I consider the methodological differences when comparing HRD/M and OP linkage.
The quantitative approaches in some of the studies (Bae & Lawler, 2000; Delery &
Doty, 1996; Huselid, 1995; MacDuffie, 1995; Shaw et al., 1998) relied on singlemember responses for gathering organizational-level performance and HR practices
data (Patterson, West, & Wall, 2004). These studies utilized cross-sectional data collection methods involving multiple firms, across or within particular industry sectors,
enabling generalization of findings. In contrast, fewer longitudinal studies (Cappelli &
Neumark, 2001; Huselid, 1995) investigated HRM and firm performance relationship.
Large-scale survey designs dominate the HRMOP research stream. The findings from
quantitative-based designs have resulted in offering snap shots and high-level analysis of HR-OP linkages. HRM studies imply deterministic, static, and objective notions
of the linkage between HR and OP. These notions also influenced the HRD line of
inquiry in determining HRs relationship to OP-level outcomes.
The qualitative methodology, on the other hand, offers a different line of approach
in addressing the HROP linkage. This methodology addresses the notion of HR practices as institutionally embedded. Thus, accessing multiple respondents in every organization is required to obtain a variety of perspectives. By focusing on the influences
of local contexts on organizational members, the qualitative approach is well-suited
for examining micro-level approaches toward establishing the linkage between HR
and OP. The multiplicity of perspectives that define HRD allow for the adoption of a
variety of research methods. In contrast, several HRM scholars have only recently
begun to call for qualitative studies (Becker & Huselid, 2009). Therefore, it is not surprising to note that the HROP linkage has been examined exclusively through the lens
of quantitative research. Building cumulative evidence from a variety of research
designs, methodologies, and data collection sites will strengthen scholarship and credibility for HRM and HRD theory, research, and organizational practice. Both largescale studies and small, highly contextualized studies would advance the scholarly
inquiry on the HR-OP linkage (Alagaraja & Egan, 2011). The qualitative methodology
also complements the many quantitative research studies. More important, the methodology would elaborate the dynamic interactions among key organizational decision
makers on how the HR-OP linkage is achieved in organizations.
Conceptualization of HRD/M
One outcome of the review is to suggest the adoption of the term HRD&M as a
better approach for defining HR to include people management (HRM) and development aspects (HRD) as a combined system of practice, policies, and performance
outcomes. A new term HRD&M is proposed as a more inclusive reflection of the work
HRM and HRD professionals do in organizations. As more organizations look to
134
adopt broad approaches in practice, a more accurate reflection of the practice of HRM
and HRD in organizations as HRD&M is useful. However, this may not always be the
case, and there may be some resistance in larger organizations with resources or the
wherewithal to have separate HRM and HRD departments.
HRD/M can also be considered as a field of theory, research, and practice involving
the management and development of human resources in organizations. HRD/M function includes human capital development at the individual level (knowledge, skills,
and abilities), social networks and relationships (social capital), and human capital
management of human resource systems based on employment policy, comprising a
set of policies designed to maximize functional and organizational integration, employee
commitment, flexibility, and quality of work that support HR systems and structures
within an organizational context. The work of Gilbreath and Montesino (2006) recommended an expanded HRD role to include both employee well-being and OP. The conceptualization of HRD/M is similar to the goals stated by their research. Organizations
need to develop a greater understanding of HRD&M as a system with clearly defined
performance expectations and outcomes (Colakoglu, Hong, & Lepak, 2009). Effective
HRD&M systems integration with operational aspects of business is thus imperative
for the performance and improvement of individuals, processes, and the organization as
a whole (Becker & Hueslid, 2009; Guest, 1997). The goal of HR function involving the
development and management aspects thus, places a central value in simultaneously
embracing the development and management of the HR function. Achieving balance
between competing employee and organizational demands and needs would contribute toward effective OP. Thus, HRD&M can be understood as a field involving the
management and development of human resources in organizations. HRM&D function includes human capital at the individual level (knowledge, skills, and abilities),
social networks and relationships (social capital), and organizational capital.
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Alagaraja
in organizations and their contributions to OP has not received attention from either
fields. This is a major gap that was identified in the literature review. Both HRM and
HRD need to support practitioners in the application of theories, research, and models
for evaluating the performance and service delivery of HR function.
Strategic Perspectives
The implementation of strategy is important in establishing the HR-OP linkage.
Becker and Huselid (2009) call for future research studies in the implementation of
strategic human resource management (SHRM). According to them, strategy implementation is an equally important area of study as SHRM theory development. Other
notable empirical research gaps from the literature call for identifying key intermediate outcomes in accomplishing strategy implementation (Doorewaard & Meihuizen,
2000) and increased within-industry studies (such as Doorewaard & Meihuizen,
2000; MacDuffie, 1995). These scholars suggest the need for balanced perceptions
toward understanding HR performance, taking into account multiple stakeholder
expectations. Haggerty and Wright (2009) contend that the strength of an HR system contributes to desired organizational-level performance and recommended
future research in this area. These are complex constructs that need in-depth understanding of the interacting dynamics between organizational culture, structure, strategy, and context.
Gilley and Maycunich (2000a, 2000b) recommended the integration of HRD as a
strategic partner to maximize OP. Garavan (2007) and Holton and Yamkovenko (2008)
have also called for studies examining the impact of strategic human resource development (SHRD) on firm-level performance outcomes. The theoretical and intellectual
debate about the importance of HRD or HRM as a strategic partnership has not yet
translated into an established line of inquiry. There is a convergence across both fields
in the conceptualization and positioning of strategic human resource development and
management (SHRD&M) for conclusively establishing the effect of human resources
on OP.
Conclusions
The accumulation of research evidence for HR-OP linkages would make a strong case
for greater role, status, and influence of the HR function in organizations. The general
and academic discourse on the effect of HR function in organizations continues to
remain an underdeveloped area. Greater integration of HRD and HRM theoretical
perspectives and the general HR practitioner discourse would significantly improve
the role, status, and influence of HR function on OP. It would also help in developing
a deeper understanding of HR functional service capacity and performance delivery
in organizations. To do so, research studies adopting innovative approaches are
needed to enhance our understanding of HR performance, taking into account multiple stakeholder expectations. The article recommends that both HRD and HRM draw
136
Funding
The author(s) received no financial support for the research, authorship, and/or publication of
this article.
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Author Biography
Meera Alagaraja is an assistant professor of human resource development at the University of
Louisville. Her research interests include strategic HRD, performance interventions, international HRD, and learning in organizations. Her work has appeared in publications such as
Human Resource Development Review, Human Resource Development International, and the
Human Resource Development Quarterly.