A configurational analysis of the human resource contribution to firm's bottom line results

The objective in this study was to examine whether a firm's economic/financial success can be attributed to the effective applications of its HRM policies, practices and strategies. In this empirical study, an extended rationale borrowed from configurational conceptual contributions was used in order to test the multiple linkages and architecture between certain HR policies and practices and HR Department characteristics as well as some organizational characteristics, with the overall economic/financial performance of the firm. To do that, three innovative features were employed: (a) a design that combines crosssectional features for the independent variables with some longitudinal data for the dependent variables (b) an attempt to link HR parameters to objective economic yardsticks, and (c) an innovative statistical treatment of the data for testing the said conceptual model. Via a series of ANOVAs and classification and regression tree analyses, results show that HRM policies and practices play an important role in predicting the economic/financial success of the firm in the intermediate range. In relative terms and within the tree architectural structure, the HR variables explain significant variance, more than HR and organizational characteristics along the criteria. Results show that the HR function within certain configurations plays an important strategic and operational role in adding value to the firm's performance; by contrast, and when some HR policies and practices are absent or poorly implemented, the detrimental consequences on the firm's economic/financial performance can be devastating.