HR orientations and HR department effectiveness in Vietnam
| Published date | 06 August 2018 |
| DOI | https://doi.org/10.1108/PR-03-2017-0074 |
| Date | 06 August 2018 |
| Pages | 1043-1061 |
| Author | Diep T.N. Nguyen,Stephen T.T. Teo |
| Subject Matter | HR & organizational behaviour,Global HRM |
HR orientations
and HR department
effectiveness in Vietnam
Diep T.N. Nguyen and Stephen T.T. Teo
School of Business and Law, Edith Cowan University, Joondalup, Australia
Abstract
Purpose –Human resource (HR) philosophy and an organization’s commitment to employees (OCE) are
important components of a human resource management (HRM) system, yet the influences of these variables
on the effectiveness of HRM implementation has been less evident. Similarly, few studies have examined the
effect of intended and implemented HR practices on line managers’perceptions of HR department
effectiveness. The purpose of this paper is to examine how these factors could result in a positive evaluation
of HR department effectiveness in Vietnam.
Design/methodology/approach –Study 1 consisted of 405 line managers and the authors used this
sample to test the proposed research model. Study 2, comprising 192 line managers, was used to validate the
findings from Study 1.
Findings –The authors found empirical evidence of how HR managers should leverage their relationships
with line managers to enhance HR department effectiveness in a developing economy such as Vietnam.
Research limitations/implications –As data were from line managers in one point in time, this study
could be affected by common method bias. However, the authors conducted three common method variance
checks and the analyses showed that this issue was not a major concern. Future studies could extend the
sample of respondents by collecting information from CEOs, employees, and HR managers.
Originality/value –This study contributes to the extant literature empirical evidence of determinantsof HR
department effectiveness. First, the study shows the simultaneous impacts of HR philosophy and OCE on the
actual implementation of HR practices. Second, the authors provide an understanding of line managers’
evaluation of HR department effectiveness through their experience with implemented HR practices.
Keywords Quantitative, Structural equation modelling (SEM), Commitment, Advanced statistical,
Human resource management practices, Line managers
Paper type Research paper
Several studies have mainly examined the direct and indirect effects of various factors on
human resource (HR) department effectiveness in developed countries such as the UK
(Guest and Conway, 2011), Australia (Teo and Rodwell, 2007), and South Korea (Ryu and
Kim, 2013). Evidence shows that the HR department ’s strategic integration into
business planning mediates this department’s performance (Teo and Rodwell, 2007).
The transferability of human resource management (HRM) activities to line managers can
increase the perceptions of HR department effectiveness (Ryu and Kim, 2013). Despite the
proliferation of research on HR department effectiveness, Guest (2011) and Welbourne
(2012) asked for more research to gain a deeper understanding of what makes
organizational residents perceive the effectiveness of their HR departments. There is also
insufficient understanding as to whether HR department effectiveness exists in
organizations in emerging economies such as Vietnam, especially given the increasing
interests on the adoption of a strategic approach to HRM (see Bartram et al., 2009; Nguyen
et al., 2013). Therefore, this will be a major aim of our study.
Another factor influencing HR department effectiveness is the implementation of HR
practices. Scholars (such as Guest, 2011; Paauwe et al., 2013) argued that a lack of
examination of implemented HR practices has resulted in inaccurate evaluation of the
HR department’s performance. Line managers are reliable respondents to the evaluation of
HR department effectiveness because they are responsible for the implementation of HR
Personnel Review
Vol. 47 No. 5, 2018
pp. 1043-1061
© Emerald PublishingLimited
0048-3486
DOI 10.1108/PR-03-2017-0074
Received 14 March 2017
Revised 29 November 2017
Accepted 15 February 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0048-3486.htm
1043
HR department
effectiveness in
Vietnam
practices, which means that strategic HRM (SHRM) studies must consider line managers’
perceptions of implemented HR practices (Guest, 2011; Paauwe et al., 2013). Hence our study
contributes to this under-researched area by focusing on implemented HR practices as a
reference for line managers to evaluate the HR department’s performance (Brewster et al.,
2013; Guest and Conway, 2011).
It is argued that the implementation of a HRM system is unlikely to be successful unless
there is a shared perception among line managers and HR managers in delivering HR practices
to employees. HR practices are perceived to be effective when they are consistently internalized
among employees (Oh et al., 2017). Following Bowen and Ostroff’s (2004) framework, a strong
HRM system comprises the similar interpretation about the HRM system among
organizational constituents that is dependent on the consistency between HRM orientations
of the management and the implementation of HR practices. In addition to this, two other
variables in an organization’s HRM orientations that may have an impact on HR department
effectiveness are HR philosophy and an organization’s commitment to employees (OCE)
(Kellner et al., 2016; Oh et al., 2017). Thesetwo variables reflectthe way organizationsvalue the
workforce, commit to human capital development, and manag e employees strategically and
effectively (Lepak et al.,2007;Nishiiet al., 2008). WhileHR philosophyand OCE have been used
to operationalize an organization’sHRorientations(Monkset al., 2013; Roca-Puig et al., 2007),
little is known if they play a part in enhancing the perceptions of HR department effectiveness.
Therefore, our research contributes empirical evidence to the literature about the impact of HR
philosophy and OCE on the perceived effectiveness of the HR department.
Theoretical background and hypotheses
Intellectual capital is an important resource providing sustainable competitive advantage;
therefore, the successful execution of strategy is linked to the effective utilization of HRs
knowledge and capabilities (Barney et al., 2011). A common sense of commitment to provide
excellent care, ample and fair compensation, and development makes HRs dedicate their
engagement, loyalty, and competencies to the organization’s success (Lee and Miller, 1999).
This perspective of sustainable competitive advantage through the value of HRs highlights
the integration of HRM into business strategy (Monks et al., 2013; Kellner et al., 2016).
The HRM-strategy integration begins with top managers’perceptions toward HRs in the
execution of business strategy, highlighting the strategic choice in utilizing individual
talents. This strategic integration emphasizes high commitment from top managers to
enhance employee competencies (Boxall and Macky, 2009; Oh et al., 2017). The commitment
to HRs thus ensures the properly effective implementation of HR practices that in turn leads
to the success of HRM-strategy integration (Pereira and Fontinha, 2016; Wright et al., 2001).
An emerging body of research on SHRM shows that the development of HR philosophy and
OCE is likely to produce effective HRM systems because these factors reflect the value that
employers place on HRs and how they manage employees (Lepak et al., 2007; Pereira and
Fontinha, 2016). Therefore, HR philosophy and OCE can be used to determine an
organization’s SHRM orientation and how a complementary set of HR practices is
implemented (Kellner et al., 2016; Lee and Miller, 1999).
An organization’s HR orientations provide a form of institutional status for the HR
department to obtain scarce organizational resources and reflect the level of support that the
HR department receives from top management (Tsui, 1990). When an organization values
the important role of HRs, top managers are likely to involve the HR department in the
strategic management process (Sheehan et al., 2007). In line with the strategic involvement
of the HR department, HR managers are able to integrate HRM systems into the business
strategy and share HR involvement in decision making (Teo and Rodwell, 2007; Sheehan
et al., 2016). Subsequently, the HR department’s effectiveness is one of the key outcomes to
show the power and influence of this department (Sheehan et al., 2016).
1044
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47,5
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