THE IMPACT OF HRM PRACTICES ON ORGANIZATIONAL PERFORMANCE: A GENERAL MODEL AND A TEST FOR URUGUAY
Independently of the strategy followed to define the relevant HRM indicators, the empirical literature to date has generally provided with supportive evidence on the existence of positive relationships between at least one specific dimension of firms’ economic performance and certain Human Resources Management (HRM) practices (Brewster and Mayrhofer, 2012
provide a comprehensive updated review). However, only few multivariate analyses have been performed considering at the same time the configuration of these practices, the contingency variables of the organization, together with the institutional context in which these practices are implemented and their impact on organizational performance. This paper introduces a
testable general theoretical model and summarizes the results of a series of empirical analyses, using data for Uruguay.
Recent institutional changes that have taken place in Uruguay starting in 2005 provide a unique opportunity to analyze HRM under different contexts of industrial relations, collective bargaining and increasing unionization. The general model introduced links the probability of attaining a certain level of firm performance to Human Resource Management (HRM) practices, while controlling for diverse characteristics related to unionization as well as for other contingency variables.
Particular emphasis is also set on the existence of complementaries among practices. Within empirical studies, this issue involves including HRM practices interacting individually or by subsets, usually in bundles/configurations previously identified by different statistical methods.
The Uruguayan evidence is modeled along these lines, based on a sample of 274 companies with more than 50 employees,most of them SMEs according to international standards but nonetheless the largest firms in the country.
The next section is devoted to review the literature on these two topics that in turn justifies the specification of the empirical model and its application to Uruguay. A description of the information set and the definition of the variables that are
included in Section 3. In Section 4 the outcome of the estimated model is discussed while the most relevant conclusions are summarized in the final section.