– This paper aims to discuss the association between human resource management and performance from a process perspective, differentiating intended and implemented vertical and horizontal fit. Although researchers have examined deeply the relationship between these constructs, extant literature demonstrates inconclusive results. Previous studies have stressed the strategic importance of vertical and horizontal fit from a prescriptive view. Nevertheless, a deeper understanding, focused on management processes, is needed.
– This paper reviews and integrates two streams of strategic human resources management (SHRM) literature: the fit perspective, drawing on Martín-Alcázar et al.’s (2005) model, and the system strength approach, proposed by Bowen and Ostroff (2004).
– The conceptual analysis developed in this paper concludes that HRM system strength mediates the effects of an aligned strategy on performance. In this sense, the paper argues that success in implementation of the HRM strategy depends on employees’ perceptions about the system of policies and practices through which it is carried out. Additionally, organizational communication is considered as the mechanism to create a shared HRM meaning to translate to employees.
– Drawing on the theoretical discussions in the paper, the following implications for HRM practice are identified: the usefulness of the system strength construct as a tool to measure employees’ perceptions and anticipate potential problems at the implementation stage, the importance of organizational communication mechanisms, the relevance of formal and informal connections between HR managers and top executives and the need for specific training to promote HR managers’ communicational skills.
– This study examines the relationship between HRM and organizational performance by presenting a new model that integrates HRM strategy formulation and implementation, proposes employee perceptions concerning HRM are mediators of HRM strategy and firm performance, highlights the role of organizational communication in creating and managing shared HR messages and introduces system strength as an instrument to assess vertical and horizontal fit during implementation.
