HR Practices, Interpreted HRM, and Organizational Performance: Multi-level Analysis Kim Eun Hee

I. Introduction II. Research model III. Method IV. Results V. Discussion

This study  investigates the role HRM perception in individual, organizational, and cross-level  uses a multi-level sample of 263 firms and 2,200 employees in manufacturing sector  supports that collective HRM perceptions fully mediate the relationship between HR practices and organizational financial performance  suggests that team-leaders’ HRM perceptions partially mediate the relationship between HR practices and team-members’ HRM perceptions Introduction

Research Questions  Does collective HR perception mediate the relationship between actual HR practices and firm performance?  How employees perceive or interpret HR system, and what the mechanism is Research Model

Major constructs  HPWS Meticulous staffing and recruiting, extensive training, fair appraisal/reward, communication  Interpreted HR (-rated HPWS) For employees, HRM practices can be considered as a signal of the organization’s intentions Different interpretation on HRM practices may lead employees to react differently to the same practices Research Model HPWS Collective HRM perceptions Leader-rated HPWS Member-rated HPWS Organizational level Individual level Financial performance Job satisfaction Organizational commitment Turnover intention

Major constructs  Financial Performance ROA (return on assets, 총자산 수익률 ) ROE (return on equity, 자기자본 수익률 )  Job satisfaction, organizational commitment, turnover intention Employees’ attitudinal/behavioral outcomes Research Model HPWS Collective HRM perceptions Leader-rated HPWS Member-rated HPWS Organizational level Individual level Financial performance Job satisfaction Organizational commitment Turnover intention

Hypotheses  Hypothesis 1. Collective perception of HRM will fully mediate the positive relationship between HRM practices and organizational performance.  Hypothesis 2a. Member-perceived HRM is positively related with job satisfaction.  Hypothesis 2b. Member-perceived HRM is positively related with organizational commitment.  Hypothesis 2c. Member-perceived HRM is negatively related with turnover intention. Research Model HPWS Collective HRM perceptions Leader-rated HPWS Member-rated HPWS Organizational level Individual level Financial performance Job satisfaction Organizational commitment Turnover intention

Hypotheses  Hypothesis 3a. HR practices are positively related with leader-perceived HRM.  Hypothesis 3b. Leader-perceived HRM is positively related with member-perceived HRM.  Hypothesis 3c. Leader-perceived HRM will partially mediate the positive relationship between HR practices and member-perceived HRM. Research Model HPWS Collective HRM perceptions Leader-rated HPWS Member-rated HPWS Organizational level Individual level Financial performance Job satisfaction Organizational commitment Turnover intention

Sample and procedure  Stratified random sample of 1,899 companies  Only manufacturing firms and firms with more than 100 employees  Final sample: 263 firms and 2,200 employees  A sample of 150 groups requires only five persons per group to obtain a power of 0.90 (Hofmann, 1997) Data analysis  Organization- and Individual-level analyses Hierarchical multiple regression  Cross-level analyses (mediation model) Hierarchical linear modeling Intercepts- as-outcome model (hypotheses testing) Group-mean centering plus the addition of an aggregate measure of the mean of the individual scores Method

Organization-level analyses (H1)  H1(HPWS → Collectively rated HPWS) : supported Result

Individual-level analyses (H2)  H2a (Employee-rated HPWS → Job satisfaction) : supported  H2b (Employee-rated HPWS → Organizational commitment) : supported  H2c (Employee-rated HPWS → Turnover intention) : supported Result

Cross-level analyses  Hypothesis 3a (HPWS → L-HPWS): supported  Hypothesis 3b (L-HPWS → E-HPWS): supported  Hypothesis 3c (HPWS → L-HPWS → E-HPWS): supported 95% CI [.005,.017] excludes zero Using RMediation Result Dependent variable Employee-rated HPWSLeader-rated HPWS Model1Model2Model3Model4 Intercept 3.29 *** 3.30 *** 3.29 *** 3.41 *** Organization-level HPWS 0.03 *** 0.02 * 0.06 *** Individual-level L-HPWS 0.19 *** 0.16 ***

Cross-level analyses  Why RMediation? Several methods for computing Cis for the mediated effects (1)Distribution of the product (e.g., MacKinnon, Fritz, Williams, & Lockwood, 2007) (2)Monte Carlo method (MacKinnon, Lockwood, & Williams, 2004) (3)Resampling methods (e.g., bootstrap resampling; MacKinnon et al., 2004) (4)Asymptotic normal distribution method Distribution of product has been shown to produce CIs with higher coverage rates, especially when the sample size is small PRODCLIN is widely used computer program that produces CIs on the basis of the distribution- of-the-product method But, with limitation (1)Popular statistical software packages cannot directly run the PRODCLIN program (2)PRODCLIN program is limited in that it does not produce CIs for some mediated effects for certain values of means (3)Some limitations in producing CIs for the product of coefficients that are correlated Result

Discussion HPWS Collective HRM perceptions Leader-rated HPWS Member-rated HPWS Organizational level Individual level Financial performance Job satisfaction Organizational commitment Turnover intention Alternative models  3-Level models  Additional moderating factors ? ?

Discussion Alternative tools  Multilevel SEM (structural equation modeling) using MPLUS Remained issues  Interpretation of variance components  Interpretation of the meaning