| The human resource management literature emphasizes the importance of people in enhancing firm performance and creating a competitive advantage. Both Porter's (1985) theory of sustained competitive advantage and Barney's (1998) Resource-Based View of the Firm (RBV) served as the theoretical framework for this study. While Porter (1985) suggests that a competitive advantage occurs when a firm delivers the same benefits as competitors at a lower cost or delivers benefits that exceed the firm's competition, Barney (1998) suggests that there are additional sources of competitive advantage that are more intangible and lie in people and the practices used to develop them. This study incorporates a systems perspective of human resource management and provides further evidence of the link between human resources and organizational performance. Kentucky State Society of Human Resource Managers were surveyed and asked to provide factual information regarding human resource management practices and perceptual information regarding employee skill and motivation, job performance, and organizational performance. Three hundred fifty human resource professionals responded to the survey. Statistical analyses revealed positive associations between employee skills, motivation, job performance, and organizational performance. Further, motivation and human resource management practices demonstrated a positive influence on organizational performance. This study provides researchers and organizational leaders with information regarding the relationships within the entire human resource management system (consisting of inputs, human resource management practices, job performance, and firm performance). Proof of these relationships should provide organizational leaders the necessary information to make informed decisions regarding the recruitment, selection, and development of employees. This study should also provide organizational leaders with information that will guide the selection and implementation of human resource practices that may positively influence the performance of their employees and ultimately result in increased organizational competitiveness. Additionally, researchers may use this information to build consensus regarding the measurement of human resource management systems and firm performance. |
