Exploring the HRM-performance relationship: the role of creativity climate and strategy
| Pages | 438-462 |
| Published date | 04 April 2016 |
| DOI | https://doi.org/10.1108/ER-06-2015-0110 |
| Date | 04 April 2016 |
| Author | Margaret Heffernan,Brian Harney,Kenneth Cafferkey,Tony Dundon |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations |
Exploring the HRM-performance
relationship: the role of
creativity climate and strategy
Margaret Heffernan and Brian Harney
DCU Business School, Dublin City University, Dublin, Ireland
Kenneth Cafferkey
Graduate School of Business, Universiti Tun Abdul Razak,
Kuala Lumpar, Malaysia, and
Tony Dundon
Alliance Manchester Business School,
The University of Manchester, Manchester, UK
Abstract
Purpose –While an established stream of research evidence has demonstrated that human resource
management (HRM)is positively related to organisationalperformance, explanations of thisrelationship
remain underdeveloped, while performance has been considered in a narrow fashion. Exploring the
relevant but often neglected impact of creativity climate, the purpose of this paper is to examine key
processes (mediation and moderation) linking high-performancehuman resource practices with a broad
range of organisational performance measures, including employee performance andHR performance.
Design/methodology/approach –The paper draws on a People Management Survey of 169 HR
managers from top performing firms in the Republic of Ireland.
Findings –The findings provide general support for the role of creativity climate as a key mediator in
the HRM-performance relationship. The impact of HPWS on performance is judged universal with little
evidence of variation by strategic orientation.
Practical implications –Sophisticated HRM is found to directly impact a range of organisational
performance outcomes. Creativity climate provides an understanding of the mechanisms through
which such impact takes effect. Organisations should develop a clear and consistent HR philosophy to
realise HR, employee and organisational performance.
Originality/value –The paper offers a more intricate understanding of the key factors shaping both
the operation and impact of the HRM-performance relationship. Creativity climate offers an important
vehicle to better understand how the HRM-performance relationship actually operates. The paper also
highlights the potential of examining multiple organisational performance outcomes to offer more
nuanced and considered insights.
Keywords Employee behaviour, High performance work systems, Creativity climate,
HRM performance, Strategy and HRM
Paper type Research paper
Introduction
Over time, competitive forces have changed the nature and purpose of human resource
management (HRM). Research has gradually moved away from an exclusive focus on
HRM content and static notions of positioning towards HRM processes and dynamic
manoeuvring (Chow, 2012; Patel et al., 2013). It is increasingly acknowledged that the
basis of long-term organisational success resides in the ability to continuously foster
creativity and realise a positive working environment (Anderson et al., 2014). By affording
employee autonomy, encouraging discretionary effort, and rewarding creative solutions
organisations are betterpositioned to react to and exploitunanticipated events, while also
Employee Relations
Vol. 38 No. 3, 2016
pp. 438-462
©Emerald Group Publishing Limited
0142-5455
DOI 10.1108/ER-06-2015-0110
Received 15 June 2015
Revised 1 December 2015
15 December 2015
Accepted 18 December 2015
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
438
ER
38,3
exploring and anticipating changing market and customer needs (Amabile et al., 1996;
Dixon et al., 2014). It follows that those organisations which excel will be those
which readily harness the ideas and suggestions of employees by actively encouraging,
enabling and rewarding creative performance behaviours (Birkinshaw and Duke, 2013;
Montag et al., 2012).
While extant HRM research has progressed to substantively demonstrate the impact
HRM can have on financial and operational dimensions of organisational performance
(Combs et al., 2006), the relationship between HRM, creativity and multifaceted
organisational performance outcomes remains underexplored (Boxall et al., 2011; Cooke
and Saini, 2010). This static outlook offers limited potential to capture the critical role
of adaptive and creative capabilities (Wei and Lau, 2010). As noted in a review by
Hayton (2005) “there is a pressing need for empirical research that addresses the
contribution HRM makes to a firm’s ability to accept risk, be innovative and be
pro-active”(p. 21). This paper addresses this topic by taking a creativity perspective to
examine key processes (mediation and moderation) linking high-performance human
resource practices and performance (cf. Sun et al.,2007).
A creativity climate was selected as the facet-specific climate for this research due
to increased emphasis on how HRM stimulates process innovation and creativity
(Shipton et al., 2006; Searle and Ball, 2003) and how ones environment assists in the
creativity process (Amabile et al., 1996; Wallace et al., 2006). The role of HRM in this
process cannot be understated as Bowen and Ostroff (2004, p. 205) note that “HRM
practices and HRM systems will play a critical role in determining climate perceptions”.
This is further reinforced by Knight-Turvey (2005) who suggests HRM is significant in
determiningclimate strength. Climate in thissense can be understood as “a broad classof
organisational rather than psychological variables that describes the organisational
context for individualaction”(Glick, 1985, p. 613). To date,the focus with respect to facet-
specific climates has been on customer service and safety (Chuang and Liao, 2010;
Schneider etal., 2013), although there have been hintsof the significance of empowerment
and encouraging pro-active behaviours (Kazlauskaite et al., 2011). Of particular
significance is the argument that creativity climate does not equate to encouraging
unbridled risking taking and radical innovation. Rather it involves developing an
organisational infrastructure which fosters challenging work, communication and
respect for new ideasand new ways of doing things (cf. Amabileet al., 1996). In this sense
it is not specific to environmental conditions but hol ds more universal applicability in the
form of continuous improvement, adaptability and organisational development (Helfat
and Winter, 2011). In exploring these relationships the paper elucidates the role
of creativity climate as a critical intermediary between HRM practices and a range of
organisational outcomes.
The paper proceeds as follows. Following a brief review of HRM-performance
research, the paper highlights the importance of “creativity climate”as a missing
explanatory process contributing to organisational performance outcomes. The facet-
specific climate of creativity has hitherto not been deployed in the service of examining
the HRM-performance relationship, despite the obvious advantages to studying the
creative performance behaviours of employees (Montag et al., 2012). We then
examine the potential moderating role of organisational strategy. The research
methodology and measurement scales are explained, followed by the analysis and
results. The significant findings are then discussed coupled with opportunities for
future research. Overall, this exploration of creativity climate to multiple performance
outcomes, coupled with the addition of competitive strategy as a prospective moderator
439
Exploring
the HRM-
performance
relationship
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