Transformative Human Resource Strategy And Its Mechanism

Recently, business transformation and industrial upgrading is becoming a major path for Chinese companies to catch up with the increasingly dynamic environment. In the process of transformation and upgrading, human resource management (HRM) in many companies is likely to face some prominent challenges. To illustrate, the majority of current employees in companies often lack some key competencies required by new business. The companies deal with such problem by attracting and drawing new talents into the companies to fulfill the emerging job requirements. However, these new employees always find it is difficult to become involved in the present organization and team, which limits their potentials to make contributions.To address such questions, the dissertation suggests that HRM practices may shift their focus from being administrative and transactional orientation to be more strategic and transformative orientation. The main goal of strategic and transformative HRM is to improve the competencies of employees to respond dynamic demands timely while promote the embeddedness of employees with diverse backgrounds to coordinate effectively so that companies can achieve success in the process of transformation and upgrading.Based on the importance of abovementioned practical problem and absence of related research in strategic human resource management (SHRM), this dissertation focused on the following research question:in the context of transformation and upgrading, which kind of HRM practices should companies adopt to meet with challenges and improve change performance? After reviewing the recent research advances of strategically targeted human resource (HR) system, this dissertation primarily developed a new HRM mode situating in the context of transformation and upgrading and named it as transformative HR strategy.The dissertation adopts the perspective of production systems rooted in cognitive psychology as theoretical lens to design the research and tries to fulfill three main goals:First is developing the new construct of transformative HR strategy (study 1) and its measurement scale (study 2). Second is exploring the mechanism linking specific contextual factors with transformative HR strategy (study 3). Third is exploring the mechanism linking transformative HR strategy with organizational and individual effectiveness (study 4 and 5). On the whole, the dissertation contains five interrelated studies.In the first study, the construct of. transformative HR strategy was developed. Based on the framework of strategically targeted HR system, this study selected four typical companies and collected information through in-depth interviews, company archives and public reports. After within-case and cross-case analyses, this study proposed transformative HR strategy as a new construct of HR mode targeted toward transformation and upgrading. Transformative HR strategy contains four dimensions, i.e. strategic staffing, continuous development, contingent rewards, and autonomous empowerment.In the second study, the measurement scale of transformative HR strategy was developed and verified. Through the in-depth interviews with senior managers from representative companies and reviewing relevant scales from previous research, a preliminary item pool was generated. Then through two rounds of survey, this study used exploratory factor analysis and confirmatory factor analysis to verify the structure of the measurement items and achieve the final version of scale with 13 items. The convergent validity, discriminant validity and criterion-related validity of this scale were all validated.In the third study, the mechanism linking key contextual antecedents with transformative HR strategy were explored. After analyzing the major challenges companies may face in the process of transformation and upgrading, this study identified key contextual factors in two dimensions, namely organization-related contextual factors (i.e. business innovation and change dynamism) and work-related contextual factors (i.e. competency comprehensiveness and task teaming). Using data collected from a large sample survey, this study showed that these four contextual factors were all positively related to transformative HR strategy and its four dimensions. These results revealed the generating mechanism of transformative HR strategy.In the fourth study, the mechanism of transformative HR strategy towards organizational effectiveness was explored on the basis of macro perspective in SHRM. This study identified operational performance and financial performance as the indicators of organizational change performance. Organizational responsiveness was chosen as a key mediator since it becomes a salient capability for companies to survive in dynamic environment. Using data collected from a large sample survey, this study showed that transformative HR strategy and its four dimensions enhanced organizational responsiveness which further improved company’s operational performance and financial performance. These results revealed the external responding mode of transformative HR strategy.In the fifth study, the mechanism of transformative HR strategy toward individual effectiveness was explored on the basis of micro perspective in SHRM. This study identified adaptive behavior and proactive behavior as the indicators of employee’s change behaviors. Team’s transactive memory system was chosen as a mediator and line manager’s change leadership was chosen as as a moderator. Transactive memory system represents the coordination process within diverse team and change leadership represents the specific leadership style toward organizational change. Those variables are very critical for overall effectiveness of companies in the changing context. Using data collected from a large sample survey and establishing multilevel model, this study showed that transformative HR strategy and its four dimensions enhanced team’s transactive memory system which further improved employee’s adaptive behavior and proactive behavior. Moreover, it showed that line manager’s change leadership strengthened the positive relationship between transformative HR strategy (including its four dimensions) and transactive memory system. These results revealed the internal integrating mode of transformative HR strategy.The dissertation contributes to current literatures in at least three aspects. Firstly, it focused on the context of transformation and upgrading which was an important practical issue for Chinese companies, and developed the new construct and measure of transformative HR strategy following the framework of strategically targeted HR system. Second, based on the idea of "recognition-action" in production systems, it explored the effects of organization-related and work-related contextual factors on transformative HR strategy. The results revealed the multi-source generating mechanism of transformative HR strategy. Third, based on the idea of "stimulus-response" in production systems, it explored the effects of transformative HR strategy on organizational change performance and individual change behaviors. The results revealed the multi-level effectiveness mechanism of transformative HR strategy. These findings not only provide crucial theoretical insights to SHRM research but also have significant implications for practitioners to implement successful change practices in the context of transformation and upgrading.