Guest editorial: HRM leading the way to organizational success

Citation

Curado, C., Lopes Henriques, P., Mateus Jerónimo, H. and Muñoz-Pascual, L. (2024), "Guest editorial: HRM leading the way to organizational success", Journal of Organizational Effectiveness: People and Performance, Vol. 11 No. 3, pp. 525-531. https://doi.org/10.1108/JOEPP-09-2024-558

Managers are required to prepare organizations for uncertain times and to guide people to successfully face the ongoing changes (Nanda and Randhawa, 2022; George et al., 2022). These changes are extensive, compelling organizations to pursue multiple objectives and redefine success with a broader, outside-in perspective rather than focusing solely on financial criteria (Aust et al., 2020). In this competitive business environment, human resource management (HRM) policies and practices are meant to manage people to be a source of competitive advantage (Wanigasekara et al., 2022). Developing successful organizations goes hand in hand with developing high-performing happy employees; therefore, HRM has an active and strategic role in promoting synergistic improvement of both (Barrena-Martínez et al., 2019; Salas-Vallina and Alegre, 2021; Schneider et al., 2018). HRM is therefore configured as a meta-capability (Rothenberg et al., 2017), combining resources, knowledge and skills in valuable ways to create new capabilities and enhance existing ones. To support this, the use of descriptive and predictive HRM metrics, encompassing both financial and non-financial aspects, is crucial for generating performance measures and informing strategic decisions (Pillai and Sivathanu, 2022).

This special issue on HRM leading the way to organizational success gathers contributions from researchers with different methodological, ontological and philosophical options. Nevertheless, we must acknowledge that a quantitative confirmatory approach is prevalent across the studies in this special issue. Such evidence delivers very sound and cumulative results on previous literature that reassures us of the evident contribution of HRM and the applied models to lead the way to organizational success. Therefore, this special issue adds to the debate on the implications of HRM for organizational success with a total of ten original papers.

There are three key influences on organizational performance that emerge from the studies in this special issue: leadership and HRM practices, employees’ commitment and engagement and knowledge management.

We find evidence in the literature that leadership and HRM practices lead to organizational success in multiple ways (Bos-Nehles et al., 2023; Piwowar-Sulej and Iqbal, 2023; Salas-Vallina et al., 2021). In this special issue, we offer a collection of evidence showing that HRM practices contribute to employee work engagement and organizational attractiveness in higher education institutions of Pakistan (Khan et al., 2024), to the general well-being and organizational commitment of employees in India (Dutta et al., 2024) and to develop organizations’ competitive capabilities and innovativeness in knowledge intensive information technology organizations in India (Trivedi and Srivastava, 2024a). Transformational leadership influences the psychological capital of followers and generates higher work efficacy in India (Kashive and Raina, 2024). Furthermore, humble leadership contributes to organizational citizenship behavior and project success in Pakistan’s IT industry (Naeem Mian et al., 2024).

Likewise, we have support from the literature that employees’ commitment (Solanki and Baroda, 2024) and engagement (Saks et al., 2022) contribute to organizational success in several ways. This special issue gathers results from empirical studies that illustrate employees’ commitment and engagement impact over nurses’ turnover intentions in Portuguese healthcare organizations (Freire and Azevedo, 2024) and inbound open innovation in Albanian SMEs (Cera et al., 2024). Additionally, work location impacts the general well-being and organizational commitment of employees in India (Dutta et al., 2024); thus, arguments on different models for employee work locations also play a role in the way to organizational success.

Finally, literature shows that knowledge management influences organizational success in various ways (Farooq, 2023). In this special issue, we show how knowledge management processes link intellectual capital and organizational culture to organizational innovativeness in India’s IT knowledge-intensive service companies (Trivedi and Srivastava, 2024a), and knowledge management systems and counterproductive knowledge behaviors (knowledge hoarding and knowledge hiding) influence the quality of care provided by Portuguese hospitals (Gonçalves and Curado, 2024). Moreover, knowledge management capabilities mitigate the negative impact of risk management in United Arab Emirate’s companies (Daradkeh, 2024) and task conflict in Portuguese hospitals (Gonçalves and Curado, 2024) on organizational outputs.

Besides the three mentioned influences, there is evidence in this special issue of organizational structural variables that also affect organizational performance, like task characteristics and work environment dimensions. Task complexity (Naeem Mian et al., 2024) and task conflict (Gonçalves and Curado, 2024) seem to influence organizational success, following the literature (Chen et al., 2024; Cheong and Kim, 2024). Likewise, structural work environment dimensions related to strategic choices (differentiation and cost-effectiveness) (Trivedi and Srivastava, 2024b), organizational culture (Cera et al., 2024; Trivedi and Srivastava, 2024b) and system risk (Daradkeh, 2024) play a role in reaching organizational success, like the literature shows us (Bwonya et al., 2020; Islami et al., 2020).

With this special issue, we provide evidence of the influence of leadership and HRM practices, employee’s commitment and engagement and knowledge management, together with contextual influences of task and work environment-related dimensions, on the way to organizational success. Such influences affect organizational performance in several ways:

By impacting organizational results, e.g. projects’ realization, organizational innovation and quality of provided services.

By impacting organizational functioning, e.g. organizational attractiveness, work efficacy, work engagement and commitment.

By impacting on organizational life quality, e.g. employees’ psychological capital and well-being and their willingness to leave the organization.

From such evidence, we believe that HRM leads the way to organizational success at three levels: Organizational atmosphere, organizational processes and organizational outputs.

In this special issue, we are delighted to introduce the groundbreaking “The Atmosphere-Processes-Outputs (APO) Model,” inspired by Positive HRM (Gruman and Budworth, 2022) and the call from Peccei and Van De Voorde (2019) to enhance the theoretical foundations of HRM, employee well-being and individual and/or organizational performance. Through an integrative review of submitted articles, we have developed a logical framework (Figure 1) that articulates the interrelationships among the three dimensions.

This approach establishes a solid basis for creating a management tool reminiscent of the balanced scorecard (BS) (Kaplan and Norton, 1992) but with the distinct advantage of simplicity and direct link to efficiency and effectiveness measures in HRM practice. The APO model demands strategic coherence among selected indicators for each dimension, resulting in a comprehensive dashboard of indicators that effectively track management results. When applied across various sections of the company, this model serves as both a strategic management system and a tool for monitoring tactical and operational performance, simplifying information collection and reporting across the company. The APO model explicitly integrates three dimensions of HRM under a set of indicators to be monitored, drawing a parallel to the triple bottom line (TBL) framework proposed by Elkington in 1997. By emphasizing the significance of each dimension equally, the APO model strives to achieve balance in HRM policies and practices, generating a “win-win” scenario for both employees and the organization, ultimately leading to more substantial contributions to organizational success.

The APO model benefits from the adoption of multiple insights from BS and TBL. Paralleling BS and TBL tools, the indicators to be used on the APO should align with the organization’s strategic options and objectives, so that changes in one indicator are reflected in the next level indicators and, all together, contribute to boost organizational success. This framework shows how a comprehensive HRM strategy, employing a system-thinking approach (Botelho et al., 2023) that addresses several levels and aligns short- and long-term goals, is crucial for achieving organizational success. However, each dimension has a specific impact, despite all being interconnected: while the processes and atmosphere dimensions focus more on the individual and group levels, the output dimension impacts the entire system.

Regarding the outputs – To drive performance, HRM can establish a list of lagged indicators reflecting non-financial organizational results (Curado et al., 2022). Companies can develop analytical tools that surpass the traditional focus on financial performance, incorporating environmental and social dimensions as opportunities and drivers for change and value creation (Henriques et al., 2022). The results should be framed by tolerance limits and explicit failure and excellent achievement levels, and such indicators should generate managerial reports with suggestions to address such deviances – action indicators. These serve as a warning alert for possible noncompliance with the pre-established goals or for lower performance levels than forecasted. At the organizational outputs level, workforce productivity metrics may reflect the financial element of the TBL, like cost and/or benefit quantitative indicators, e.g. revenue per employee, profit per employee and EBIDTA per employee, equality practices, health and safety plans, social and psychological barriers hindering environmental objectives, corporate philanthropy and community engagement efforts.

Regarding the processes – HRM processes are strategically aligned with organizational goals to drive better performance while also adopting a multipurpose, long-term perspective and an innovative approach (Koster and Benda, 2020). Engaging and effective processes can significantly boost overall performance levels (Salas-Vallina et al., 2021). HRM should be able to establish performance indicators to measure organizational outputs. It is crucial for these indicators to be well defined, with clearly established thresholds for success and failure. At the organizational processes level, metrics may reflect the environmental element of the TBL, like the adoption of HRM environmental indicators on practices like recruitment, leadership, retention or turnover, e.g. digital transformation, organizational resilience, replacement efforts, span of control and time from cessation to new onboarding (Muñoz-Pascual et al., 2019).

Regarding the atmosphere – success in implementing HRM processes depends largely on employees and their perceptions and motivations in the workplace. Happy employees working in an organizational positive environment that supports these processes are crucial to organizational success (Hartanto, 2024; Muñiz-Velázquez et al., 2022). HRM can establish a set of indicators for these processes which can be used to enhance organizational processes. These indicators should be defined with tolerance limits for both failure and exceptional achievement levels. No progress can occur without placing at the top of the list the conservation, regeneration and well-being of human resources, as well as the direct and indirect, positive and negative impacts of the work systems and practices on individuals, their families and communities (Mariappanadar and Aust, 2017; Stahl et al., 2020). At the organizational atmosphere level, metrics may reflect the social element of the TBL, like the use of skills, capabilities, knowledge management and learning indicators, work intensification and retrenchment and work-life interfaces, e.g. workforce competency rate, training ROI and knowledge creation, sharing, storage and use indicators.

With this model and special issue, we aim to contribute to establishing a platform – the APO model – for future debates, as the topic of how HRM can lead to organizational success will undoubtedly remain relevant. Such a tightly knit system adds another layer of understanding to the multiple roles of HRM, as both HRM and organizations are co-evolving and continuously adapting to new changes and challenges. Efforts to further understand these interconnected dynamics contribute to a better comprehension of organizational success in an age where HRM must serve social, environmental and economic purposes and is propelled by artificial intelligence and augmented reality.

Figures

Figure 1

The atmosphere-processes-outputs (APO) model