What can HR and other organisational leaders do to study the link between HRM and business performance? This ‘black box’, as it is often called, resists easy explanation. In the case of HR policy, how policies are formulated, aligned with business strategy, operationalised and implemented ought to have a significant impact on business performance. The question remains, how can this impact be determined? Bamberger, Biron and Meshoulam (2014) describe three perspectives from which HR strategies, and their attendant policies and practices, can be studied: 1) universalistic, 2) contingency and 3) configurational. From these three perspectives, HR strategy and policy should be formulated, in turn, by identifying ‘ideal’ HR practices, by aligning HR practices and business strategy and by ensuring internal coherence amongst HR practices. These three perspectives are not mutually exclusive. One could argue that the best approach would be to combine the best aspects of all three perspectives. Again, how to do this? This Key Concept Exercise asks you to propose specific ways in which you might approach this challenge in your own context.
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