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Do Organizational Climate and Competitive Strategy Moderate the Relationship Between Human Resource Management and Productivity?

ARC Key Centre for Human Factors & Applied Cognitive Psychology, School of Psychology, the University of Queensland, Australia, Andrew{at}psy.uq.edu.au

Michael A. West

Business School, Aston University and Centre for Economic Performance, London School of Economics, United Kingdom

Malcolm G. Patterson

Institute of Work Psychology, University of Sheffield, United Kingdom

This study examined whether the effectiveness of human resource management (HRM) practices is contingent on organizational climate and competitive strategy. The concepts of internal and external fit suggest that the positive relationship between HRM and subsequent productivity will be stronger for firms with a positive organizational climate and for firms using differentiation strategies. Resource allocation theories of motivation, on the other hand, predict that the relationship between HRM and productivity will be stronger for firms with a poor climate because employees working in these firms should have the greatest amount of spare capacity. The results supported the resource allocation argument.

Key Words: organizational climate • human resource management • productivity (employee) • competitive strategy • employee motivation

Journal of Management, Vol. 31, No. 4, 492-512 (2005)
DOI: 10.1177/0149206304272188


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