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Flexing to outperform: workforce differentiation, HR flexibility and firm performance

Flexing to outperform: workforce differentiation, HR flexibility and firm performance Resource orchestration theory proposes that firms need resources, capabilities, and horizontal and vertical alignment to achieve high performance. Thus, we investigate which combinations of horizontal fit of resources (commitment-based HR systems for managers and nonmanagers) and capabilities (HR flexibility) together with vertical fit with business strategy (innovation versus cost leadership strategies) relate to superior performance.Design/methodology/approachOur study is based on a sample of 113 Spanish firms from which we collected data on commitment-based HR systems for managers and nonmanagers, HR flexibility, business strategy and performance. We employ a fuzzy set qualitative comparative analysis (fsQCA) to analyze which configurations lead to firm performance.FindingsThe empirical analysis shows that both HR practices and policies (commitment-based HR systems) and HR capabilities (HR flexibility) need to be aligned for high performance. The path for performance is comprised of a combination of commitment-based HR systems for staff and HR flexibility and by the absence of an innovation strategy or commitment-based HR systems for managers, HR flexibility, and a cost leadership strategy. We also find four paths where performance relies on efficiently combining an innovation and cost leadership business strategy.Originality/valueOur findings make three key contributions to the literature. First, we help elucidate multicausal relationships inside the black box of the “HR–performance” relationship for firm performance. Second, we study the vertical fit with business strategy by considering innovation and cost leadership strategies. Third, we analyze multicausal pathways, thus uncovering different combinations of resources and capabilities for performance. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Manpower Emerald Publishing

Flexing to outperform: workforce differentiation, HR flexibility and firm performance

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References (49)

Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0143-7720
DOI
10.1108/ijm-02-2024-0146
Publisher site
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Abstract

Resource orchestration theory proposes that firms need resources, capabilities, and horizontal and vertical alignment to achieve high performance. Thus, we investigate which combinations of horizontal fit of resources (commitment-based HR systems for managers and nonmanagers) and capabilities (HR flexibility) together with vertical fit with business strategy (innovation versus cost leadership strategies) relate to superior performance.Design/methodology/approachOur study is based on a sample of 113 Spanish firms from which we collected data on commitment-based HR systems for managers and nonmanagers, HR flexibility, business strategy and performance. We employ a fuzzy set qualitative comparative analysis (fsQCA) to analyze which configurations lead to firm performance.FindingsThe empirical analysis shows that both HR practices and policies (commitment-based HR systems) and HR capabilities (HR flexibility) need to be aligned for high performance. The path for performance is comprised of a combination of commitment-based HR systems for staff and HR flexibility and by the absence of an innovation strategy or commitment-based HR systems for managers, HR flexibility, and a cost leadership strategy. We also find four paths where performance relies on efficiently combining an innovation and cost leadership business strategy.Originality/valueOur findings make three key contributions to the literature. First, we help elucidate multicausal relationships inside the black box of the “HR–performance” relationship for firm performance. Second, we study the vertical fit with business strategy by considering innovation and cost leadership strategies. Third, we analyze multicausal pathways, thus uncovering different combinations of resources and capabilities for performance.

Journal

International Journal of Manpower – Emerald Publishing

Published: Sep 30, 2024

Keywords: HR differentiation; HR flexibility; Business strategy; fsQCA

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