Strategic Human Resource Management Practices and Organizational Competitive Advantage: An Empirical Investigation of the HR-Performance Linkage

Abstract

This empirical study examines the relationship between strategic human resource management practices and organizational competitive advantage, investigating mechanisms through which HR systems contribute to superior organizational performance. The research employed a longitudinal design spanning three years, collecting data from 218 organizations across manufacturing, service, and technology sectors through HR executive surveys, employee questionnaires, and analysis of financial performance indicators. The study examined high-performance work systems encompassing selective staffing, extensive training, performance-based compensation, participation programs, and employment security provisions. Findings reveal that organizations implementing comprehensive high-performance work systems achieved significantly higher levels of employee productivity, innovation, and financial performance compared to organizations with traditional HR approaches. The research identifies human capital development, organizational commitment, and operational flexibility as critical mediating mechanisms linking HR practices to organizational outcomes. Results indicate that the bundled implementation of complementary HR practices produces synergistic effects exceeding the sum of individual practice impacts. The study contributes theoretical insights regarding the HR-performance relationship and offers practical guidance for organizations seeking to leverage human resource management as a source of sustainable competitive advantage.