Empirical Gaps in the Relationship between HRM and Firm Performance: Future Research Perspectives (Published)
HRM is the backbone of any business since it is the systematic and continuous mechanism of molding the most important human resource in any organization. Effective HRM helps stimulates employees’ discretionary effort towards higher firm performance. Though the link is well theorized conceptualized, it has been a less credible assertion in practice. The reasoning behind this debate is evidenced by three most pressing knowledge gaps highlighted in the extant literature which are: (1) narrow focus of contextual factors, (2) abstract and conventional measures, and (3) unclear process of value creation. In the circumstance, it doesn’t show the true picture of this relationship. Therefore, the purpose of this paper is to review these three gaps in order to draw future research attention to convince that the HRM-firm performance relationship is not an isolated phenomenon. In conclusion, this paper stimulates future research interests to view the underpinning relationship in a holistic approach.