Why HR Matters for Organizational Outcomes

Topic(s): motivation, turnover
Publication: Academy of Management Journal (2012)
Article: How does human resource management influence organizational outcomes? A meta-analytic investigation of mediating mechanisms
Authors: K. Jiang, D.P. Lepak, J. Hu, J.C. Baer
Reviewed by: Scott Charles Sitrin

According to a new study, human resource management has far-reaching consequences for organizational outcomes. In this study, human resource management is divided into three dimensions: skill-enhancing HR practices, motivation-enhancing HR practices, and opportunity-enhancing HR practices.

Skill-enhancing HR practices include recruitment, selection, and training; motivation-enhancing HR practices include performance management, competitive compensation, incentives and rewards, extensive benefits, career development, and job security; and opportunity-enhancing HR practices include flexible job design, employee involvement, and information sharing.


In regards to organizational outcomes, there were two types: proximate and distal. Proximate outcomes are those that happen immediately or in a short time. Distal outcomes are those that happen at some point in the future. Proximate organizational outcomes included motivation and human capital (e.g., employees’ knowledge, skills, and abilities), and distal organizational outcomes included voluntary turnover, operational outcomes (e.g., productivity, product quality), and financial outcomes (e.g., sales growth, return on assets).

The investigators determined that skill-enhancing HR practices, motivation-enhancing HR practices, and opportunity-enhancing HR practices impact the proximate organizational outcomes of human capital and motivation that in turn influence the distal outcomes of voluntary turnover, operational outcomes, and financial outcomes. So, if you want to drive important outcomes of your business, you now know a good place to start.