How an organization’s performance is directly impacted by the policies and practices set forth through human resource management (HRM), is a widely discussed topic among many fields of research (Boudreau 1991; Jones& Wright, 1992; Kleiner 1990). Multiple sources argue that work practices that promote high performance such as: comprehensive employee recruitment and selection procedures, incentive compensation and performance management systems, and extensive employee involvement and training, tend to enhance the abilities of a firm’s current and future employee’s knowledge, skills, motivation, as well as the retention of quality employees (Jones & Wright, 1992; U.S. Department of Labor, 1993). In 2016, the Society for Human Resource Management (SHRM) reports that 46% of HR managers deem employee turnover as their top concern, which is up from 25% in 2012 (Influencing Workplace Culture through Employee Recognition and Other Efforts).
According to the Society for Human Resource Management (SHRM), there are various reasons why reducing turnover should be important to an organization including (1) turnover can become costly very quickly, (2) unwanted turnover affects the performance of any organization, (3) as the availability of skilled employees decreases, it will become increasingly difficult to retain sought after employees (Managing for Employee Retention). It has been estimated that hiring and replacement expenses for an organization range can be up to 200% of annual salaries (Lee, Hom, Eberly, & Li, 2018). With this high percentage, it is crucial for organizations today to understand the concept of employee retention and turnover and how to reduce it. Employee turnover refers to the number or percentage of workers who leave an organization and are replaced (Mayhew, 2019).
The development and execution of a company’s strategic business plan must be highly contingent on current and potential employees. Through prior research, it was noted that intentions were placed on answering how can aligning human resouce management practices with a competitive strategy create a competive advantage? (Begin, 1991; Butler, Ferris, & Napier, 1991; Capelli & Singh, 1992; Jackson & Schuler, 1995; Porter, 1985; Schuler, 1992; Wright & McMahan, 1992).
In theory, an organization’s human resource policies can offer a direct, and economical contribution to the performance of a company. Sparse resources were found to support this pragmatic theory. General HRM systems were excluded, with the main focus being on individual HRM practices.
The purpose of this qualitative study is to focus on general HRM systems rather than individual HRM practices. A qualitative study design will be used in which narrative data will be collected and analyzed to show a statistical and economical significance on productivity and turnover. This data will represent that a firm’s performance will be advanced to the degree of HRM practices when matched with its competitive strategy. Qualitative data will be gathered exploring high perfomance work practices and their corrolation to firm performance from randomly sampled employees at competitive firms . The reasons for using this form of data to generate data, is to develop an in-depth understanding of overall HRM systems.
1. How is productivity and turnover affected statiscally and economically, when general HRM practices are matched to the companies competitive strategy?
2. Why are the results highly debatable when the data is pragmatic?