Annotated bibliography, briefly preview the sources, make annotations and check if the source has relevant Practical Business Recommendations at the end. Which need to be between 100-200 words with an perspective of whether it align with the topic"Human Resource Strength perceived by employees ". (3 separate articles)
And the summary of each articles in a separate paragraph of more than 400 words.
The strength of human resource practices and transformational leadership: impact on organisational performance
Carmen M.M. Pereiraa and Jorge F.S. Gomesb*
aTraining Department, Euroconsult, Lisbon, Portugal; bManagement Department, ISEG-UTL, Lisbon, Portugal
The Human resource (HR) strength concept (Bowen, D., and Ostroff, C. 2004, ‘Understanding HRM-Firm Performance Linkages: The Role of the “Strength” of the HRM System,’ Academy of Management Review, 29, 2, 203–221) reflects the capacity of an HR system to transmit messages characterised by high distinctiveness, consistency and consensus. HR systems are therefore affecting perceptions and interpretations of organisational realities, such as climate and culture. Furthermore, Bowen and Ostroff (2004) suggest that organisational climate mediates the relationship between HR strength and performance. The leadership literature advocates that leaders are people who are able to create a social context in which employees are guided towards a shared interpretation, understanding and perception of the organisational climate (Yukl, G.A. 1989, Leadership in Organizations, Englewood Cliffs, NJ: Prentice Hall). In summary, both HR strength and leadership are two environment dimensions shaping and moulding employees’ perceptions and interpretations. The current study explores the relationships between HR strength, leadership, organisational climate and performance. 323 questionnaires were used to gather information from a company in the industrial sector. The results show a positive relationship between the variables; however, mediating effects of climate were only observed between leadership and performance.
Keywords: HR system strength; leadership; organisational climate; performance
As a strategic partner, the HR function is expected to be aligned with an organisation’s strategic
purpose and mission (Ulrich 1997). Ferris, Hochwarter, Buckley, Harrell-Cook and Frink
(1999) suggest that HR practices and systems mustadapt to the organisation’s strategy, i.e. HR
must follow management choices to support the firm’s competitive moves. It is therefore
expected that HR will contribute to organisational goals and strategy through systems, which
will ideally ensure greater internal consistency and complementarity (horizontal alignment) as
well as greater congruency with organisational goals (vertical alignment) (Miles and Snow
1984; Becker and Gerhart 1996; Delery and Doty 1996; Michie and Sheehan 2005).
Despite some empirical confirmation of the relationship between HR and performance,
there is no consensus as to the mechanisms that explain this connection. Ferris et al. (1998)
suggest that the social context plays a role between HR and performance. Social context
consists of culture, climate, policies and processes of social interaction, and it affects
organisational efficiency through HR systems (see also Evans and Davis 2005). HR
systems therefore affect employees’ sensemaking (Weick 1995), i.e. the process through
which they understand and share individual experiences of organisational events.
ISSN 0958-5192 print/ISSN 1466-4399 online
q 2012 Taylor & Francis
*Corresponding author. Email: [email protected]
The International Journal of Human Resource Management,
Vol. 23, No. 20, November 2012, 4301–4318
A review of literature confirms that organisational performance is the result of several
factors, such as the context in which the professional activities are performed. Studies
show that financial performance is associated with positive attitudes and that there is a link
between sales performance and service climate (Gelade and Ivery 2003). In particular,
when employees perceive that their work context allows them to achieve their personal
goals, they will become involved and will devote more time and effort to the organisation,
thereby contributing towards the organisation’s productivity and competitiveness (Brown
and Leigh 1996). Leadership is another powerful factor affecting performance, as shown
in several works (Podsakoff, MacKenzie and Bommer 1996; Mayer, Nishii, Schneider and
The current study aims to investigate the mediating role of social context on the
relationship between leadership and HR, on one hand, and performance, on the other hand.
The study builds on concepts of HR strength and climate strength discussed by Bowen and
Ostroff (2004), to explore the above-mentioned relationships.
2. Organisational influence processes
2.1 Content and process in HRM
Bowen and Ostroff (2004) put forward a proposal to answer the question as to how HR
produces benefits for increased performance. They suggest that HR systems must be
analysed and understood in relation to: (1) content, i.e. practices and policies for reaching
particular goals; and (2) process, i.e. which attributes of the HR system can shape/create
strong situations in the form of shared meanings about contents.
As far as the content dimension is concerned, the aim should be the design of practices
that are effectively linking organisational goals with employee’s goals (vertical
alignment). At the process level, the concern is with horizontal alignment, i.e. how
different HR practices are implemented and communicated to employees. Considering
that it is the employees who put the strategy into practice (Lambooij, Sanders, Koster and
Zwiers 2006), HR must be aligned within the organisation because only in this way will
the employees know what is expected of them. Within the HR process dimension,
communication is a key concept.
In fact, the HR system can be defined as a complex set of communication mechanisms
between the organisation and its employees (Tsui, Pearce, Porter and Tripoli 1997), which
is why the way in which the message is transmitted and how it is received by the employee,
are of utmost importance. Similarly, Galang and Ferris (2003) suggest that HR exercises
influence and power over employees, acting at the level of symbolic communication.
Since individuals are active throughout the process, the perception and agreement of
the content of the message depends on the attributions that are made. Causal inference is a
process through which the employees meet, obtain causal explanations from others and
communicate these explanations to others (Kelley 1973). In an organisational context, and
with regard to HR, the employees make attributions of trust about cause–effect
relationships whenever they can create situations that reflect the following assumptions
(Kelley 1973): distinctiveness, consistency and consensus.
Distinctiveness refers to mechanisms and characteristics that enable HR practices to
attract the employees’ attention and arouse their interest. Distinctiveness is embodied in
C.M.M. Pereira and J.F.S. Gomes4302
(1) Visibility: degree to which the messages stand out and are observable. Ease of
recognition influences the attention employees pay to the information, the way in
which they organise it cognitively and how they make causal attributions. To
create a strong situation, its characteristics must be salient and visible throughout
the day’s work and must be part of the individuals’ routines and activities.
(2) Understandability: degree of ambiguity and understanding in the messages
conveyed by HR. In situations in which the stimulus is not clearly understood, the
employees may make several categorisations. Accordingly, different people will
use different cognitive categories to process the information, resulting in different
(3) Legitimacy of authority: legitimacy of authority of the HR systems and its agents
(e.g. HR professionals) involves employees’ perception of the roles that are required,
the expectations for performance and which behaviours are formally accepted.
(4) Relevance: the situation must be presented in a way so that individuals can perceive
how important is it for the goals they hope to achieve. Relevance is found alongside
legitimacy of authority, whereby the influence over employees operates through the
authority of the leader and the motivational significance he/she has for the
employee. Thus, employees must perceive the situation to be relevant for achieving
both personal and organisational goals, and the desired behaviours must be clear and
adequate for these goals to be reached.
Consistency helps employees to gain awareness and understand what is expected of them.
For employees to make attributions about expected and rewarded behaviours, the
principles of causal attribution must be present, and it must be possible to ascertain the
priority (in which the causes precede the effects) and the contiguity to the effect (the cause
is close in time to the effect). Consistency refers to the existence of an effect whenever its
cause is present, and it is fundamental that these relationships are consistent over time, for
everyone in every context. This is guaranteed through:
(1) Instrumentality: establishes a non-ambiguous perception of the cause–effect
relationship relative to the desired behaviours and their associated consequences.
Instrumentality is perceived as higher when the connection between employees’
behaviours and the results are close in terms of time (principle of the contiguity of
causal attribution) and when they are applied consistently over the established
time (principle of the priority of causal attribution).
(2) Validity: HR practices must be consistent in terms of what they propose to do and
what they effectively do. When a practice is applied and publicised with certain
effects and then does not result in what was expected, the message sent to employees
is contradictory, which enables them to develop their own personal interpretations.
(3) Consistent HR messages: transmits compatibility and stability in the signals sent by
the HR practices, while lack of consistency in the communications may lead to
situations of cognitive dissonance.
Results from the agreement among employees on how they perceive the cause–effect
relationships. The attribution concerning behaviours, and which answers lead to which
effects, are more likely to be accurate when there is consensus. This is fostered by:
The International Journal of Human Resource Management 4303
(1) Agreement among principal HR decision makers: when the employees perceive
that decision makers (top managers, HR and first line managers) agree among
themselves regarding the message, a consensus is more likely to be reached.
(2) Fairness: extent to which HR practices follow the principles of justice
(distributive, procedural and interactional). This attribute refers to the employees’
perception of the ‘fair’ way in which they are treated.
In short, the central idea of the theory is that HR systems influence employees’ attitudes and
behaviours and, consequently, individual and organisational performance, through perceptions
of the organisational climate. Since the climate is defined as the perception that the employees
have of the policies, practices and organisational procedures, the HR system is considered
to play a critical role in the perception of the climate. Sanders, Dorenbosch and Reuver
(2008) suggest that when a system is perceived by employees as having high distinctiveness
and consistency and when there is consensus among all, the system is expected to contribute
towards organisational performance and greater affective commitment, motivating the
employees to display the behaviours and attitudes that are appropriate and desired.
2.2 HR system strength
Bowen and Ostroff (2004) propose a model that connects HR to organisational performance,
through the mediating effect of the situational strength. This concept was presented by
Mischel (1973) and is used by Bowen and Ostroff (2004) to describe how a strong HR
system must lead to greater behavioural consistency and uniformity within the group.
According to Mischel (1973), individuals constantly receive information from their
surrounding environment, and their cognition and behaviours are affected by these
situational clues. Situations are strong in as much as they lead people to construct events in
the same way, encourage uniform and well-defined expectations with the aim of obtaining
the most suitable behavioural standard, associate incentives with the performance of this
standard behaviour and promote the skills necessary for adequate construction and
execution (Mischel 1973; Schneider, Salvaggio and Subirats 2002; Sanders et al. 2008).
Strong situations lead to the sharing of ideas, beliefs, attitudes and objectives that
strengthen the effectiveness among employees (Dorenbosch, Reuver and Sanders 2006),
and lead to cooperation and the use of routines that are suitable for organisational
objectives (Whitman, Van Rooy and Viswesvaran 2010).
Situational strength is therefore understood to oscillate between the capacity that the
situation has to induce conformity (strong situation) or discrepancy (weak situation). A
strong situation manifests itself in group cohesion, whose members will make an effort to
stay and keep the group intact, complying with its rules and taking into account the
interests of the group above their own (Nauta and Sanders 2001; Frenkel and Sanders
2007). In weak situations, individuals are uncertain as to how to categorise the events and
do not have clear information on the most adequate behaviours for the situation. Hence
they will rely on their internal dispositions to guide their behaviour.
The HR system is in a key position to create strong or weak systems, thus influencing
employees’ perception of practices, policies, procedures, routines and rewards. The HR
strength concept draws attention to the processes that are associated with it, what
communication practices exist, the way in which people are influenced/persuaded and the
way in which they react and attribute meaning to the messages they receive.
As observed, the top, direct and HR managers play a key role in how HRM ensures the
presence of distinctiveness, consistency and consensus. It is therefore necessary to
C.M.M. Pereira and J.F.S. Gomes4304
understand the behaviours and the position of the leaders within their units of work so as to
understand their potential contribution to the strength of HR practices and to
The leader is key because of the intermediate position he/she holds between the strategic
apex and the operational base. Supervisors are interpretative filters, since they are the ones
who implement the company’s goals and policies and communicate the characteristics of
the work processes on which to focus most. They have the power to create a context that
leads to a shared interpretation/understanding of the desired behaviours and attitudes,
thereby influencing employees’ perception (Mayer et al. 2007; Whitman et al. 2010). They
thus influence employee behaviours and attitudes, both through the leader–subordinate
relationship, and because leaders put the strategic and HR goals into practice.
In recent years, the transformational leadership framework has caught much attention.
It has been suggested that transformational leaders strongly affect not only individual and
organisational performance, but also group cohesion and employees’ beliefs and values
(Grojean, Rsick, Dickson and Smith 2004). Such leaders are close to their subordinates
and motivate them beyond the material benefits (Rubin, Munz and Bommer 2005). They
also have the influence/power to change the values, beliefs and attitudes of their
subordinates so as to motivate them to go above and beyond what is expected of them. This
is achieved by articulating a future vision of the organisation, ensuring an operational
model that is consistent with this vision, encouraging a focus on the goals and showing
individual consideration for the employees (Podsakoff et al. 1996; Judge and Bono 2000).
Wu, Tsui and Kinicki (2010) describe two types of transformational behaviours:
individual versus group oriented. Behaviours related to ‘individualised consideration’ and
‘intellectual stimulation’ tend to influence employees individually, since they are directed
at each employee. On the other hand, ‘idealised influence’ and ‘motivational inspiration’
tend to influence the group as a whole, as the emphasis is placed on the level of sharing
values and one ideology. In terms of impact on individual performance, this is related to
the processes through which transformational leaders affect results (Walumbwa, Avolio
and Zhu 2008). The authors ascertain that this style of leadership is positively related to:
(1) identifying with the work unit, through the effect on motivation for achieving
organisational goals and interests; in this case, the employees adopt the latter as their own
and are willing to make a greater effort on behalf of the organisation; and (2) perception of
self-efficiency: employees are confident and believe in their capacities so as to
successfully complete the tasks that are required of them.
The leader’s behaviours allow for a cognitive and emotional identity to be created
among employees (Wu et al. 2010), increasing the individuals’ sense of self-worth and the
adoption of attitudes that benefit collective success. These psychological mechanisms
enable the leader to promote a collective identity among group members, whereby
idiosyncratic characteristics will have less of an impact on employees’ perceptions.
3. Effects of influence processes
3.1 On organisational climate
Studies on HR and leadership show that these factors affect the situations that employees
experience in the workplace and the social context of the organisation. Different HR and
leadership practices foster different organisational climates, which lead to different
The International Journal of Human Resource Management 4305
behaviours and attitudes on the part of the employees. In this way, the social context
produces or inhibits behaviours. Literature on organisational climate also suggests that
climate has a mediator role on the relationship between HR and performance (Dickson,
Hanges and Resick 2006; Takeuchi, Chen and Lepak 2009).
Amidst climate literature, the psychological climate is a key concept. Psychological
climate is related to the individual perceptions and meanings attributed to the
environment; it is based on experimentation and the meaning given to what is seen and
to the events experienced (Parker et al. 2003; Dickson et al. 2006; Takeuchi et al. 2009).
Employees attribute different meanings to the stimuli received in accordance to their
knowledge structure and their information-processing traits, which then leads to different
attitudinal and behavioural responses (Parker et al. 2003; Nishii, Lepak and Schneider
2008). Brown and Leigh (1996) state that the perceptions that contribute to the
psychological climate are clearly related to the support given by leaders, the extent to
which they are seen to be flexible, the support they provides, the clarification of roles, the
chance for employees to express themselves, and the recognition and contribution they see
themselves as making to the organisation. In this sense, the psychological climate may be
considered in terms of psychological security and/or significance of the working
environment, both of which are clearly related to leadership action and the HR practices
within the organisation.
In an organisational context, the meanings include contents such as goals, expected
work-related behaviours and performance activities which are expected, supported and
rewarded by leaders. In this sense, psychological climate should be closer (i.e. stronger) at
the intra-department level than at the inter-department level (Takeuchi et al. 2009). It is
therefore likely that organisational goals are understood in a different way according to the
department area (e.g. production vs. commercial).
Organisational climate and psychological climate are distinct concepts. The former is
the result of what is experienced within the organisation, and it reflects the beliefs shared
among employees, which give meaning and significance to the organisational
environment. It is related to the practices, policies, procedures, routines and rewards,
with regards to what is important, expected and rewarded. It is based on interaction
processes among the employees and on the shared perception resulting from them. It is
stable over time and may be integrated into formal organisational units, such as
departments (Dickson et al. 2006; Dawson, González-Romá, Davis and West 2008). The
climate is therefore a powerful social mechanism, since it models the way in which
individuals build the meaning of their organisation reality.
The distinction between psychological and organisational climate has generated some
empirical challenges. The authors suggest that organisational climate is created by
aggregating the psychological climates of each individual. In accordance with the
composition model, there are several ways to assess organisational climate at an aggregate
level of analysis. Following Chan (1998), there are five variants of the composition model:
additive, direct consensus, referent shift, dispersion and process. The direct consensus and
dispersion variants are the most relevant for analysing organisational climate and are
characterised by: (1) direct consensus, in which the meaning of the construct represents the
consensus among the variables; and (2) dispersion, in which the meaning of the construct
is the variance of the variables that comprise it.
Direct consensus has been widely used in empirical research. A high level of
organisational climate will reflect a greater consensus among the group members. If the
group members have little shared perceptions, or if they are highly varied, it means there is
C.M.M. Pereira and J.F.S. Gomes4306
no shared meaning within the group about the practices, policies or even goals (Schneider
et al. 2002; Dickson et al. 2006).
3.2 The concept of climate strength
In short, within the organisation there is a sharing of/variance in perceptions of beliefs and
values, and this reflects the strength of the organisational climate. In other words, the
agreement/disagreement among the employees of the organisation/department with regard
to the practices and policies that characterise them will determine whether the climate is
strong enough to induce desired behaviours (Schneider et al. 2002; Dickson et al. 2006).
A strong climate reflects less ambiguity with regard to the organisation’s policies,
practices, procedures and goals. This leads to shared expectations and perceptions among
the group members, which are necessary for behavioural uniformity. In practice, strong
climates stimulate sharing of the standards, practices and expectations associated with the
organisation’s environment. Nevertheless, it should be remembered that even when the
organisational climate is strong, it may be negative. In this case, there is behavioural
consistency among the employees, but these behaviours do not reflect what is desired and
not positive for organisational performance.
In organisations with strong climates, the consensus among employees about how the
organisation works enhances the relationship between the climate and the organisation’s
results, through greater consistency and continuity of employee behaviour (Dickson et al.
2006). Moreover, if the organisational climate is strong, there will be more chance of its
persisting throughout the organisation’s life (Schneider et al. 2002). Climate strength is
considered to act in favour of the organisation provided that it is geared towards good
performance (Dickson et al. 2006).
4. Research hypotheses
On the basis of the aforementioned studies, we propose the model shown in Figure 1.
4.1 HR strength: organisational performance
The HR system is considered to have an impact on the creation of strong situations reflected
in the organisational climate and, thus, have an impact on the organisation’s performance
(Bowen and Ostroff 2004; Evans and Davis 2005). It is therefore expected that:
Hypothesis 1a: The HR system is positively associated with situational strength
(analysed through organisational climate) so that the stronger the HR
system is, the stronger the organisational climate will be.
Hypothesis 1b: The relationship between HR strength and performance is mediated
by situational strength (analysed through organisational climate).
Strength of the HR system (Distinctiveness, consistency and consensus)
Situational strength Organisational climate
Figure 1. Relationship between the HR system strength, leadership, organisational climate and performance.
The International Journal of Human Resource Management 4307
4.2 Leadership: organisational performance
Leaders’ behaviours foster the commitment of their
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