An Integrative Approach to HRM-firm performance relationship : A Missing Link to Corporate Governance

Purpose: The purpose of this paper is to contribute to ongoing debates regarding the human resource management (HRM)-firm performance relationship. In seeking to provide a more complete picture of the relationship, the paper discusses the existing literature and proposes an integrative framework that draws upon different literatures and multiple theoretical perspectives.

Design/methodology/approach: Our review includes nearly 100 research studies published in this field. The review includes articles published in mainstream HRM journals and broader management journals with strong ties to HRM literature. Importantly, the paper also identifies a gap – a missing link - that concerns the importance of incorporating insights from corporate governance literature when considering strategic HR decision making.

Findings: A significant contribution of this paper to theory is to propose an integrative framework that conceptualises the elusive relationship between HRM and firm performance, and which draws on different literatures and multiple theoretical perspectives in to offer more holistic insights into the relationship. The paper discusses the implications of the integrative perspective for theory and practice.

Originality/value: This paper argues that one of the main stumbling blocks for developing a better understanding of the mechanisms through which HRM creates value in an organisation is the fragmentation of the HRM literature between “HR as practices” versus “HR as the department/profession”, as well as a tendency to neglect insights from the corporate governance literature.