A Study of the Relationship between
Human Resource Management System and
Organizational Performance： An Organizational
Learning Perspective
Zhang Xiaobing1，2Zheng Xianming3 Li Xinjian1
（1.Business School of Nankai University, Tianjin 300071, P.R.China；2.School of
Economics and Management, Huaiyin Institute of Technology, Huai′an 223001，
P.R.China 3 School of Economics and Management, Chongqing University
of Posts and Telecommunications, Chongqing 400065, P.R.China）
Abstract：In accordance with the Chinese context, this paper constructs an organizational-learning-based research model integrating Human Resource Management System （HRMS） and organizational performance, and proposes hypotheses among absorptive capacity （ACAP）, organizational learning （OL）, and organizational performance based on the theory development.We obtain 221 effective samples through snowball sampling and testify the sample data with SEM, most of the hypotheses being supported.
Key words：Human Resource Management, Human Resource Management System, Organizational Learning, Organization Performance
1.Introduction
Under the context of economic globalization and increasingly fierce global competition, effective human resource management is crucial for an organization to grow and succeed.Unfortunately, very little research （Bjrkman＆Fan, 2002）[1]has been done on the relationship between HRM and organizational performance of Chinese companies.More scarce is empirical studies of the relationship between HRM and organizational performance of Chinese companies from the perspective of organizational learning.However, this worthwhile study will affect whether Chinese companies need attaching importance to the development and improvement of organizational learning capacity and whether the relationship between HRM and organizational performance is worthy of in-depth study.
2.Literature review
Knowledge-based view of the firm （Spender, 1996）[2]argues that knowledge and learning capacity determine organizational performance as well as the acquisition of sustainable competitive advantages.Organizational learning is defined as the process of knowledge acquisition, information distribution, information interpretation, and organizational memory （Huber, 1991）[3].Some empirical studies （Bontis，Crossan and Hulland, 2002）[4]strongly support the relationship between organizational learning and organizational performance.
The absorptive capacity refers to the integration of potential skills and knowledge by which an organization identifies, digests, translates, and develops knowledge （Cohen＆Levinthal, 1990）[5].Cohen＆Levinthal （1990）[5]argue that an organization′s learning capacity depends on its absorptive capacity.Galy （2003）[6]conclude empirically that an organization′s absorptive capacity positively affects its organizational learning capacity.
The HRM practice is an important factor affecting an organization′s absorptive capacity.Daghfous （2004）[7]argues that the HRM practice may influence the degree of an organization′s acquisition and digestion of new knowledge.Jansen, Van den Bosch＆Volberda （2005）[8]find empirically that HRMS can enhance an organization′s absorptive capacity.Snell, Youndt＆W （1996）[9]also point out that HRM plays an important role in organizational learning.
HRM black-box illustrates why and how HRM improves organizational performance （Becker＆Gerhart，1996）[10].Most of the existing empirical studies of the relationship between the two have proved that HRMS has a positive effect on organizational performance （Datta, Guthrie ＆W, 2005）[11].However, empirical studies of the relationship between HRM and organizational performance of Chinese companies from the perspective of organizational learning are relatively scarce, and they fail to expound the process and mechanism through which HRMS influences organizational learning and organizational performance.
3.Theory development
HRMS involves a series of interrelated activities, functions, and processes through which an organization attracts, develops, and maintains its human resources （Lado＆Wilson, 1994）[12].Recruitment is considered to be crucial for an organization to obtain human capitals.Ability/performance evaluation can be provided to employees about feedback of their performances and abilities performance-based compensation, merit-based promotion, and internal communication can promote employee incentive （Minbaeva, Pedersen, Bjrkman, Fey ＆Park, 2003）[13].Thus, we propose：
Hypothesis 1a： HRMS including recruitment, ability/performance evaluation, and training is positively related to employee ability.
Hypothesis 1b： HRMS including performance pay, merit-based promotion, and internal communication is positively related to employee incentive.
Employee ability representing existing cumulative knowledge can affect the future knowledge acquisition （Zahra＆George, 2002）[14].Brockman＆Morgan （2003）[15]argues that employee ability can help an organization to acquire interpretation of relatively new information.An individual stores the organizational memory through his ability to memorize and express experience and the cognitive orientation （Walsh＆Ungson，1991）[16].We propose：
Hypothesis 2a：Employee ability is positively related to knowledge acquisition.
Hypothesis 2b：Employee ability is positively related to information distribution.
Hypothesis 2c： Employee ability and information interpretation are positively related to the organizational memory.
Employees with high organizational commitment are more willing to search for methods to improve conditions and to receive new ideas （Hage＆Aiken, 1970）[17].An organization can successfully promote information acquisition and flow （Nonaka, 1994）[18].Lindsay＆Norman （1977）[19]points out that if employees′attitudes are positive, knowledge can be readily shared within the organization.Meanwhile, the more the establishment of this connection, the more processed knowledge can be stored into the organizational memory.Thus, we propose：
Hypothesis 2d：Employee incentive is positively related to knowledge acquisition.
Hypothesis 2e：Employee incentive is positively related to information distribution.
Hypothesis 2f： Employee incentive is positively related to information interpretation and organizational memory.
In response to the acquired information on customers and market demands, an organization can provide more proper targeted products and services, which will result in an increase in sales income （Slater＆Narver，1995）[20]Through information distribution, information can be acquainted in a larger range by organizational members who may use, or question and revise the information, and propose new ideas, hence increasingly improving the value of the information （Huber, 1991）[3].Moorman＆Miner （1997）[21]finds that the organizational memory levels can better the short-term financial performance of new products.Thus, we propose：
Hypothesis 3a：Knowledge acquisition is positively related to an organization′s financial performance.
Hypothesis 3c：Information distribution is positively related to an organization′s financial performance.
Hypothesis 3e： Information interpretation and organizational memory are positively related to an organization′s financial performance.
Existing literature has pointed out the importance of knowledge acquisition to innovative activities （Therin, 2003）[22]Information distribution refers to the process of information sharing from various sources, which leads to the occurrence of new information （Huber，1991）[3]，a source of innovation.Information interpretation of the acquired new information is important for new product performance and innovation （Brockman＆Morgan, 2003）[15].Moorman＆Miner （1997）[21]finds that high organizational memory dispersion improves the innovative performance of new products.Based on the arguments discussed above, we propose：
Hypothesis 3b：Knowledge acquisition is positively related to an organization′s innovative performance.
Hypothesis 3d：Information distribution is positively related to an organization′s innovative performance.
Hypothesis 3f： Information interpretation and organizational memory are positively related to an organization′s innovative performance.
The conceptual model and hypothesis relations are shown in Fig.1.
Fig.1 The research model
4.Data and methodology
4.1 Sample
We start a pilot test by a paired questionnaire investigation into human resource managers and general managers of 67 companies in Huai′an City of Jiangsu Province of China, and conduct the formal investigation in a snowball sampling manner into 3 contact men respectively in Shandong, Guiyang, and Beijing.We got 221 effective questionnaires, 27.63 percent of the total questionnaires.Among the formal investigation samples, there are 98 companies with a staff of less than 100 employees, 190 companies with a life of 3-5 years, 5-10 years, and more than 20 years, 124 companies whose main businesses are in the electronic communications, computer, electronic equipment manufacturing, software, medicine manufacturing, new materials, or synthetical materials industries, and 97 companies in the machinery, chemical industry, textile, and other industries.
4.2 Measurement
The financial performance and innovative performance are measured by what the responded managers have perceived.The financial performance is measured with 4 items, i.e. sales income, profit rate, ROI rate, and market share increase rate.The innovative performance is measured also with 4 items, i.e. new methods, new service types, new markets, and new process/method increase rates.The ACAP is measured with two endogenous dimensions, i.e. the employee ability （3 items） and the employee incentive （4 items）.The HRMS scale includes recruitment （3 items）, training （2 items）, ability/performance evaluation （2 items）, internal promotion （4 items）, incentive pay （2 items）, and internal communication （2 items）.OL includes knowledge acquisition （5 items）, information distribution （6 items）, and information interpretation and organizational memory （7 items）.
The control variable-company size is measured by employee numbers, the company nature by state-owned shareholding, non-governmental shareholding, and foreign funded shareholding, the company life by the time when it is founded, and the industrial nature of a company by whether it is in a new high-tech industry.
The pre-investigation data show that the construct validity of the pre-investigation questionnaires is good.The formal investigation data show that the Cronbachαcoefficient of each scale is between 0.8844 and 0.9465, up to the threshold 0.7 （Nunally, 1978）[23].The explorative factor analysis （EFA） shows KMO0.899, the accumulated interpretative information is 75.571%, and Bartlett′s sphere test is significant （p＜0.000）.The extracted 9 factors are called respectively as recruitment and development system, commitment system, information interpretation and organizational memory, information distribution, knowledge acquisition, financial performance, innovative performance, employee incentive, and employee ability.All of this demonstrates that the construct validity of this questionnaire is good.Theχ2/df value of each measure model is between 0.83 and 3.09.Except that the RMSEA values of the recruitment and developm