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A CONCEPTUAL REVIEW OF HUMAN RESOURCE MANAGEMENT SYSTEMS IN STRATEGIC HUMAN RESOURCE MANAGEMENT RESEARCH David P. Lepak, Hui Liao, Yunhyung Chung and Erika E. Harden ABSTRACT A distinguishing feature of strategic human resource management re- search is an emphasis on human resource (HR) systems, rather than individual HR practices as a driver of individual and organizational per- formance. Yet, there remains a lack of agreement
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  A CONCEPTUAL REVIEW OFHUMAN RESOURCEMANAGEMENT SYSTEMS INSTRATEGIC HUMAN RESOURCEMANAGEMENT RESEARCH David P. Lepak, Hui Liao, Yunhyung Chung andErika E. Harden ABSTRACT A distinguishing feature of strategic human resource management re-search is an emphasis on human resource (HR) systems, rather thanindividual HR practices as a driver of individual and organizational per- formance. Yet, there remains a lack of agreement regarding what thesesystems are, which practices comprise these systems, how these systemsoperate, and how they should be studied. Our goal in this paper is totake a step toward identifying and addressing several conceptual and methodological issues regarding HR systems. Conceptually, we arguethat HR systems should be targeted toward some strategic objective and operate by influencing (1) employee knowledge, skills, and abilities, (2)employee motivation and effort, and (3) opportunities for employeesto contribute. Methodologically, we explore issues related to the rela-tionships among policies and practices, sampling issues, identifying the Research in Personnel and Human Resources Management, Volume 25, 217–271Copyright r 2006 by Elsevier Ltd.All rights of reproduction in any form reservedISSN: 0742-7301/doi:10.1016/S0742-7301(06)25006-0 217  appropriate referent group(s), and who should serve as key informants for HR system studies. INTRODUCTION One of the fundamental principles of strategic human resource management(HRM) research is that the impact of human resource (HR) practices onindividuals as well as organizations is best understood by examining thebundle, configuration, or system of HR practices in place. The rationale forthis perspective is fairly straightforward. Considering that HR practicesare rarely, if ever, used in isolation, failure to consider all of the HR prac-tices that are in use neglects potential important explanatory value of un-measured HR practices. As a result, while some studies have documentedthe organizational benefits that are associated with specific HR practices,the general perspective in this area of research is that a systems view is moreappropriate. Indeed, Wright and McMahan (1992) noted that strategicHRM is primarily focused on ‘‘the pattern of planned HR deployments andactivities’’ that are intended to help organizations to achieve their objectives(p. 298). Similarly, Delery (1998, p. 291) noted, ‘‘The basic assumption isthat the effectiveness of any practice depends on the other practices in place.If all of the practices fit into a coherent system, the effect of that system onperformance should be greater than the sum of the individual effects fromeach practice alone.’’While researchers may agree that a systems perspective is more appro-priate than a perspective that focuses on the role of individual HR practicesin isolation, adopting a systems perspective introduces a host of issues andproblems that remain to be addressed in the literature. For instance, in-consistencies abound regarding what constitutes a system and multipleconceptualizations of HR systems proliferate the literature (e.g., high per-formance work systems (HPWS), human capital enhancing HR systems,commitment HR systems, high-involvement HR systems, etc.). A lack of consistency regarding these systems limits our ability to truly understand theform and function of these systems in organizations. Unfortunately, existingconceptualizations offer little agreement regarding the underlying policiesthat comprise these systems as well as the practices that should be measuredto capture these policies and systems. Without a clear understanding of theirconceptual logic, we are not able to assess proposed HR systems regardingthe extent to which they are potentially deficient in terms of missing keyHR policies and practices that inform the system or the extent to which they DAVID P. LEPAK ET AL.218  are potentially contaminated in terms of including HR policies or practicesthat are not conceptually consistent or required for the fundamental logic of HR systems. Research that uses deficient and/or contaminated systemsconfounds empirical investigations regarding the use and effectiveness of these systems.Perhaps more importantly, a lack of consensus regarding what these sys-tems are, as well as what they should be, substantially limits our ability tobuild a cumulative body of knowledge regarding how HR systems influenceimportant organizational outcomes. While there is a general consensus thatcertain types of HR systems such as HPWS (Huselid, 1995) or high in-volvement HR systems (Guthrie, 2001) are beneficial for organizations, thespecific nature of this relationship remains unclear. As a field, we know thatdifferent HR systems have been associated with performance measures. Wedo not know, however, what is really driving this relationship because thesesystems measure different policies and practices.In addition, adopting a systems perspective raises the issue of how dif-ferent components of HR systems are related. Unfortunately, most discus-sions of these systems read like a laundry list of which practices are includedwithout much discussion regarding why specific HR practices are includedor excluded and how these different HR practices are related. For instance,is there a multiplicative effect or an additive effect when we consider HRpractices simultaneously? While this is certainly an empirical question;there are also conceptual issues associated with the theoretical rationaleunderlying the relationships among HR practices. Are some HR practicesredundant with others or complementary to others? Without conceptuallyaddressing these issues, our understanding of the use and effectiveness of HR systems is unnecessarily constrained due to failure to understand themechanisms by which these work and, ultimately, influence performance.Recently, several researchers have attempted to push the field forward byhighlighting a number of limitations and concerns regarding the manner bywhich, existing studies in strategic HRM have been carried out to improve ourunderstanding of the impact of HR systems. For instance, in a recent ex-change, Gerhart, Wright, McMahan, and Snell (2000) and Huselid and Becker (2000) engaged in a debate regarding the relative merits of single source versusmultiple sources for data; the manner by which survey data are aggregatedand the statistics used to assess their aggregation (r wg  versus ICC), the meritsof single industry versus multiple industry samples, as well as the level of analysis that is (or should be) emphasized in data collection procedures.While these are pertinent and critical questions, we believe that dis-cussions regarding research design and data analyses issues are somewhat A Conceptual Review of Human Resource Management Systems  219  premature without a clear understanding of the conceptual underpinningsof HR systems. Without a certain level of agreement regarding  what tomeasure  from a conceptual point of view, focusing on improving  how tomeasure  these HR systems is akin to putting the cart before the horse. Itis possible that we may be improving the measurement of the wrong thingor only partially capturing what these HR systems are supposed to re-flect. Prior to engaging in a discussion of methodology, it is important tofocus on the content of these systems or, more directly, what these systemsare capturing.In this paper, we examine what we are measuring in the first place – theconceptual content of these systems. The structure of this paper is as fol-lows. First, we review existing conceptualizations of HR systems in theliterature and discuss potential reasons for the variations on these concep-tualizations. Second, we propose a shift toward strategically anchored HRsystems and argue that a theory-driven approach to conceptualizing andmeasuring HR systems is to consider HR systems for a specific organizationobjective and only include the HR practices relevant for achieving thatobjective. Third, we discuss the mechanism through which HR systems workto achieve strategic objectives. Building on the arguments of  Batt (2002),Delery and Shaw (2001), Huselid (1995), and MacDuffie (1995), we argue that HR systems consist of three distinct HR policy domains that are ori-ented toward influencing employee knowledge, skills, and abilities, employeemotivation and effort, and opportunities allowing employees to contribute.Further, we discuss how the objectives of HR policy domains are achievedthrough the use of specific combinations of HR policies and practices.Fourth, we explore the methodological implications of this strategically fo-cused HR systems approach with particular focus on the measurement andsampling issues in studying HR systems. Finally, we turn toward futureresearch and offer suggestions regarding the design and collection of data,implications for our current knowledge of HR systems, and offer insightsregarding the understanding of conceptualization, composition, use, andimplications of HR systems. HR SYSTEMS: CONCEPTUAL BACKGROUNDAND LOGIC Prior to reviewing existing literature, it is important to note the differencesamong HR systems, HR policies, and HR practices. Becker and Gerhart DAVID P. LEPAK ET AL.220
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