HRM Practices, Employee Well-Being, and Organizational Performance

In this chapter, we discussed the accumulating evidence on what constitutes an HRM system as well as how, why, and when it influences organizational performance and employee well-being. To this end, we reviewed the two competing configurations of HRM systems (integrationist and isolationist) as well as the resource-based view (RBV) and ability, motivation, and opportunity (AMO) perspectives in accounting for the performance effects of HRM systems. To counterbalance the predominant performance focus in HRM research, we reviewed the critical perspective that highlights the deleterious consequences of HRM systems on employee well-being. To resolve these research contradictions and drawing on the notion of workforce sustainability, we reviewed the mutual gains perspective and questioned the applicability of the AMO perspective. We, instead, suggested social exchange and self-determination theories as an appropriate theoretical lens with which to account for the performance and well-being outcomes of HRM systems. We concluded by calling for future research to be grounded in the mutual gains perspective and for its rigorousness to be enhanced by addressing issues of level of analysis and causality.