Abstract

Background: Strategic Human Resources Management (SHRM) has garnered significant attention due to its potential impact on business outcomes. However, despite numerous studies, a clear understanding of the relationship between human resource strategy and business success remains elusive.

Literature Review: This research paper reviews the literature on the impact of human resource policies on business outcomes, exploring various theoretical perspectives such as Universalist and Contingent approaches. Despite diverse approaches, a coherent understanding of this relationship is lacking.

Theoretical Perspectives: The study integrates two key theoretical perspectives: the Theory of Resources and Capacities and Behavioral Theory. The former emphasizes the creation of human capital as a source of competitive advantage, while the latter underscores the importance of employee attitudes and behaviours in achieving superior results.

Proposed Model: The proposed model incorporates six hypotheses examining the relationship between human resource systems and business outcomes, either directly or through the mediating effect of human capital or human resources results. The model outlines variables related to human resources practices, human capital, and result indicators.

Empirical Analysis: Through hypothesis testing and empirical analysis, the study finds practical support for the positive influence of high-performance human resource systems on business outcomes. It also identifies the mediating role of human capital and human resources results in this relationship.

Discussion: The research contributes to understanding the complex dynamics between human resource strategy and organizational success. It underscores the importance of integrating theoretical perspectives and empirical evidence to develop comprehensive models for SHRM.

      Conclusion: While the study provides valuable insights, limitations such as sample size and cross-sectional data highlight the need for further research to validate and expand upon these findings. Future studies should aim to overcome these limitations and explore additional factors influencing the effectiveness of human resource strategies.