Wright Et Al. 2018 A Research Revolution in SHRM Research in Personnel and Human Resources

Research in Personnel and Human Resources
Management
A Research Revolution in SHRM: New Challenges and New Research Directions
Patrick M. Wright, Anthony J. Nyberg, Robert E. Ployhart,
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A Research Revolution in
SHRM: New Challenges and
New Research Directions
Patrick M. Wright, Anthony J. Nyberg and

Robert E. Ployhart
Abstract
Research in strategic human resource management (SHRM) has evolved

over the past 30 years to become more theory based and to exhibit greater
empirical rigor. However, much has changed in the external environment
that makes the existing theories, approaches, and methodologies inappro-
priate for addressing the questions that organizations face in managing their
human resources today. In this chapter we discuss a number of environmen-
tal changes impacting organizations and identify tensions that researchers
have faced in exploring how firms seek to manage their people as a source
of competitive advantage. We argue that past research has focused on only
one side of the tension at a time, thus limiting the usefulness of the answers
that research provides. We advocate for research that simultaneously
addresses both sides of the tensions in a way that can revolutionize research
in SHRM.
Keywords: Strategic HRM; human capital; HR practices; multi-level
research; Human capital resources; Strategic human capital
The field of strategic human resource management (SHRM) is young compared

to many disciplines. Most of the relevant writing first appeared in the 1980s and
has gone through a number of phases (Wright & Ulrich, 2017). These phases can
Research in Personnel and Human Resources Management, Volume 36, 141–161

Copyright © 2018 by Emerald Publishing Limited
All rights of reproduction in any form reserved
ISSN: 0742-7301/doi:10.1108/S0742-730120180000036004
141
142 PATRICK M. WRIGHT ET AL.
be characterized more as evolutionary than revolutionary. For instance, the field

has modified its empirical base and rigor, the use of theories and methodologies,
and the topics considered within the disciplinary realm. However, these incre-
mental additions have failed to address a number of key issues that have emerged
during this same period.
Some have criticized SHRM, perhaps, in part for these reasons. For instance,
Bacharach (1989) was the first to criticize it as being a field without theory.
Partly in response to that, the field embraced the resource-based view (RBV) of
the firm as the theoretical paradigm for exploring SHRM. However, Kaufman
(2015a, 2015b, 2015c) noted a number of problems with this application. First
he identified the fact that much of the research on HR practices and perfor-
mance violates the “no rules for riches” dictum, suggesting that rules cannot be
applied to any firm that can result in sustained competitive advantages (Barney
& Clark, 2007). Second, he claimed that SHRM researchers assume that firms
can capture the rents created from human capital, and that this creates both
ethical (“exploiting” human capital) and practical (creating employee relations
conflicts) problems. Though valid, these critiques miss the more important
shortcomings of the field, specifically the field’s inability to address the chal-
lenges firms currently face in managing their human resources (Kryscynski &
Ulrich, 2015).
In particular, we believe that two issues have constrained how researchers
have approached SHRM. First, as the external environment has changed, our
models, methods, and theories have not kept pace. Consequently we either
miss/ignore the important challenges organizations face in managing human
resources, or we try to address them using approaches that cannot adequately
provide answers. Second, our research has attempted to address paradoxical ten-
sions from an either/or perspective, rather than a both/and perspective. We tend
to study one side of the coin while ignoring the other, or vice versa. These con-
straints have resulted in, at best, incremental and evolutionary progress in a field
that requires greater.
In total these two issues have constrained researchers from keeping pace with
organizational challenges. While the complexity and sophistication of organiza-
tions has adapted to a more global environment that must address continuous
change while simultaneously attracting, developing, and motivating an ever diver-
sifying employee population, SHRM research has remained stagnant. Rather
than using modern sophisticated theory and methods to investigate how organi-
zations compete in the twenty-first century, much of SHRM research is stuck still
arguing about and addressing the twentieth-century concerns.
The purpose of this chapter is to suggest revolutionary changes to future
SHRM research to create opportunities for quantum advances rather than
exclusively relying on incremental steps. To do this, we will first discuss the
evolution of the field over time. We will then note some of the developments
outside the field that have been either unaddressed or under-addressed by the
existing models and methodologies. Finally, we will propose a research agenda
that integrates these developments in a way that has the potential to drive dra-
matic change in how academics conduct future studies that can better address
A Research Revolution in SHRM 143
the challenges that organizations face in seeking to strategically manager their

workforces.
The SHRM Field

In an effort to capture the zeitgeist of prior research, Wright and McMahan (1992)
defined SHRM as “[…] the pattern of planned human resource deployments and
activities intended to enable an organization to achieve its goals” (p. 298). They
differentiated SHRM from HRM as (a) calling for vertically aligning HR decisions
with the strategy of the firm and (b) entailing the horizontal coordination of the
variety of HRM practices. They noted that the domain of the field encompassed:
[...] the determinants of decisions about human resource practices, the composition of the
human capital resource pools (skills and abilities), the specification of required human resource
behaviors, and the effectiveness of these decisions given various business strategies and/or com-
petitive situations. (pp. 298–299)
Twenty-five years later, Wright and Ulrich (2017) described three generic
phases in the evolution of SHRM. The first, the “Era of Conceptual Models”
represented the beginning of researchers’ attention and attempts to tie HR activi-
ties to the strategic goals and actions of the firm. This phase was characterized
by broad conceptual or theoretical models, usually grounded heavily in organiza-
tion practice. For example, Miles and Snow’s (1984) application of their strate-
gic types (defenders, analyzers, and prospectors) to understanding what might
constitute associated HRM systems represents an early model. Their effort
included describing the HRM systems of three companies that represented each
of these strategic types. Baird and Meshoulam (1988) and Lengnick-Hall and
Lengnick-Hall (1988) represented the entry of SHRM into mainstream academic
journals as they both appeared in the Academy of Management Review. Baird
and Meshoulam (1988) took an organizational life-cycle approach to explore the
evolution of HRM systems as firms grow in age and size. Lengnick-Hall and
Lengnick-Hall (1988) juxtaposed organizational readiness and corporate growth
expectations to develop a typology of HR systems. These foundational models
were developed from anecdotal examples.
The second phase, the “Era of Empirical Examination” sought to add empiri-
cal evidence to our understanding SHRM phenomenon. Scott Snell and his col-
leagues were among the first to contribute to this empirical base. Snell (1992)
explored HRM practices as a control system and found that administrative infor-
mation and strategic context were associated with the use of input, behavior, and
output controls. Snell and Dean (1992) explored the interrelationships among
components of integrated manufacturing technologies and a variety of HRM
systems. In one of the first rigorous empirical studies, they found links between
HRM systems and manufacturing strategies. They followed this up by examining
whether or not such “fit” between HRM and strategy resulted in increased perfor-
mance, finding some support (Youndt, Snell, Dean, & Lepak, 1996).
However, the most important studies during this phase consisted of Arthur
(1994), Huselid (1995), Delery and Doty (1996) and MacDuffie (1995). Arthur
(1994) categorized steel mini-mills into using either “control” or “commitment”

HR systems and found that those using commitment systems had higher pro-
ductivity, lower scrap rates, and lower turnover than those using control systems.
In the most cited study in SHRM, Huselid (1995) explored the link between HR
practices (what he terms high performance work systems (HPWS)) and both
accounting and market measures of corporate performance. He found that these
HPWSs were associated with firms’ Return on Assets and Tobin’s Q (the market-
to-book value of a firm). Delery and Doty (1996) attempted to test universal-
istic (“best practice”), contingency, and configurational (both “fit”) models of
SHRM using a sample of banks. Their results suggested that the universalistic
approach explained the most variance in bank performance, but variance was also
accounted for by contingency and configuration approaches. Finally, MacDuffie
(1995) examined the interrelationships among HR practices, team-based work
systems, and manufacturing systems. His results showed that flexible production
plants bundling “high commitment” HR practices with team-based work systems

and low inventory and repair buffers outperformed mass production plants.
These four studies, while extremely valuable, set SHRM on a research path
that increasingly focused on the relationship between HR practices and firm per-
formance to the detriment of studies exploring the people that were being man-
aged by those practices. The volume of such studies resulted in a meta-analytic
examination designed to assess the robustness of the observed relationships
(Combs, Liu, Hall, & Ketchen, 2006). This meta-analysis compiled 92 studies
exploring the relationship between HR practices and performance and observed
an overall effect size of 0.20. They also found that the relationship was stronger
for systems of practices and among manufacturing firms. Jiang, Lepak, Hu, and
Baer (2012) recognized that researchers increasingly differentiated among abil-
ity-, motivation-, and opportunity-enhancing (AMO) subsystems of HR prac-
tices. Their meta-analysis found direct relationships between these subsystems
and human capital, employee motivation, voluntary turnover, and operational
performance, all of which mediated the relationship between the practices and
financial performance.
The third evolution, the “Era of Empirical Critique” emerged as scholars
began to question the rigor of the methodologies and the validity of the con-
clusions drawn from existing empirical research. Wall and Wood (2005) ques-
tioned the validity of two implicit conclusions that had arisen from the empirical
research: that HR practices were positively related to performance, and that this
relationship was causal. They examined the empirical base using the perspective
of a court of law and concluded:
[…] it is premature to assume that HRM initiatives inevitably result in performance gains, either
in all situations or even where deemed appropriate by contingency arguments…there is a need,
on the basis of the findings so far, to temper the claims being made (p. 454).
This skepticism could have come from empirical studies questioning these two
relationships. First, Gerhart, Wright, McMahan, and Snell (2000) and Wright et
al. (2001) demonstrated the low inter-rater reliability of single-source measures
of HR practices. Because correcting for unreliability would result in unbelievable
effect sizes, they hypothesized that there may be some upward bias in this research
that resulted in observing significant relationships. Second, Guest, Michie, Conway,
and Sheehan (2003) and Wright, Gardner, Moynihan, and Allen (2005) both called
into question the causal order of the relationship, finding that measures of HR
practices were as strongly related to past performance as to future performance.
In another attempt to explore the evolution of SHRM, Kaufman (2015c)
compared two early SHRM books – Strategic Human Resource Management
(Fombrun, Tichy, & Devanna, 1984) and Managing Human Assets (Beer,
Lawrence, Mills, & Walton, 1984) with two more recent SHRM books – Short
Introduction to Strategic Human Resource Management (Cascio & Boudreau,
2012) and HRM & Performance: Achievements and Challenges (Paauwe, Wright, &
Guest, 2013). This analysis, while critiqued for a number of reasons (Wright,
Guest, & Paauwe, 2015), describes the evolution of SHRM as:
Over the past 30 years, however, SHRM has also evolved in several significant ways. For
example, the field is more tightly organized around and focused on the HRM-performance
relationship; committed to a quasi-universalistic superiority of a suitably differentiated
human capital/ high-participation HRM system; more strongly anchored in an AMO-RBV
explanation of the causal path between HRM and performance; has a stronger company/
shareholder/management-centric perspective driven by operational and financial returns;
and gives more emphasis to positioning the HR function as a strategic player and business
partner. Downgraded over time as active considerations are macroeconomic and industry
economic conditions, organizational and technological characteristics of the production pro-
cess, the challenges of organizational change and transformational leadership, alternative
stakeholders’ interests, labor unions and employment laws, and balance and fairness in the
employment relationship. (p. 404)
Thus, the field seems to have evolved from management practice to manage-
ment science (Kaufman, 2015c) and then to increasing rigor within the manage-
ment science. In addition, although paying lip-service to the external environment,
it has become more narrowly and inwardly focused. This evolution of SHRM
parallels the evolution of most major disciplines. In the beginning, authors focus
on developing conceptual models based on the observation of phenomenon,
followed by more systematic, rigorous, and narrow research. Finally, the existing
research becomes subject to critique regarding even more rigorous methodologies
(Kuhn, 1970). Thus, while SHRM research has followed a reasonable (and pos-
sibly expected) research path, the larger HR environment that must inform and be
informed by this research and will affect the efficacy of the models and approaches
used in current SHRM research has undergone its own revolution. We argue that
a number of trends have changed the context of SHRM, and those changes have
created a number of tensions that must be recognized by SHRM researchers. We
will first discuss the trends, and then describe the associated tensions.
Trends Impacting SHRM in Organizations

Increasing Pace of Change in the External Environment
While every generation believes that the pace of change in their generation
exceeds that of previous generations, those observing today’s environment can
at least agree that the pace of change has accelerated over the past 10 years.
In particular, revolutionary changes in technologies have changed all aspects of
businesses, from how they interact with the customers to how they interact with
their “employees.” For instance, Amazon revolutionized the nature of how firms
interact with their customers, resulting in a marketplace where an increasing per-
centage of retail purchases are conducted online. Similarly, increased information
processing capability has resulted in the rising of computer-assisted call cent-
ers and even artificial intelligence technologies. Thought leaders for years have
referred to the increasing knowledge economy, but this is now evolving into a
“gig” economy, where people with knowledge can use that knowledge on a con-
tract, as opposed to an employment basis. This has led some to predict that
employment may barely exist in the future. Despite the radical change in the pace
at which organizations must adapt to rapidly changing competitive environments,
mainstream academic SHRM research has largely ignored these changes.
This increasing pace means that there are new opportunities for conducting
research, both in terms of critical questions to address and previously uncon-
sidered contexts. However, to the extent that researchers continue to devote con-
siderable attention to the same debates, energy is not directed toward the critical
questions of today (Nyberg, Reilly, Essman, & Rodrigues, 2018). Further, the
dramatic and rapid changes in the competitive environment demand longitudinal
analytic approaches that incorporate such changes (e.g., discontinuous growth
modeling), rather than relying on cross-sectional research that remains common.
Increasing Globalization of Firms and Markets

In the 1990s and 2000s the developments in telecommunications technologies
enabled firms to more seamlessly manage operations around the globe. Paired
with greater transportation capacities for both people and goods, these devel-
opments have accelerated the pace of globalization of both firms and markets.
Firms can more easily move operations to locations with preferable access to
markets to cost-efficient labor. Paired with the fact that goods can more effi-
ciently and quickly be transported across the globe, these developments have led
to the increasing rise of multinational companies. Companies with operations
in multiple countries must manage workforces with different skills, cultures, and
regulatory constraints, decreasing the ability of firms to develop “one size fits all”
processes for managing their workforces. However, despite an increasing number
of SHRM researchers from around the world and increasing awareness of the
role of SHRM in driving global competitiveness, it remains relatively rare to find
research focused on how companies manage a global workforce.
Despite the increasingly global landscape, most SHRM research, particu-
larly that which appears in our most prestigious academic journals, remains
centered on samples drawn from the United States. The opportunities for
expanding this research involve both examining data within firms that are drawn
across international contexts and in comparing how SHRM functions in com-
panies differently across organizations that are based on different regions of
the world (Gerhart & Fang, 2005). Such research could provide opportunities
for understanding how SHRM leads to organizational performance in ways

that are difficult to assess when examining more homogenous samples or than
occurs when we simply assume that different regions will result in different rela-
tionships (Gerhart, 2008).
Increasing Importance of Talent as a Competitive Necessity

McKinsey’s “War for Talent” report in 1998 (Chambers et al., 1998) may have
marked the beginning of firms’ recognition of the competitive necessity of tal-
ent. Followed by Jack Welch’s book “Winning” which also emphasized his view
that talent was the most critical resource firms could use to compete, firms began
to increasingly devote resources to the attraction, motivation, development, and
retention of talent. This has resulted in “Talent” as being the most frequently
cited deliverable that chief executive officers (CEOs) expect of their HR func-
tion (Wright, Nyberg, Schepker, Cragun, & Ulrich, 2016). In this area SHRM
has also failed to keep pace with the importance placed on talent by organiza-
tions. Although there are many researchers who have looked at the importance of
human capital in terms of firm outcomes (Ployhart, Weekley, & Ramsey, 2009;
Sturman, Trevor, Boudreau, & Gerhart, 2003; Trevor, Gerhart, & Boudreau,
1997), current SHRM research continues to focus on the HR policies and prac-
tices rather than on the role of talent.
Although there has been work examining key aspects of talent, such as high
performers (Trevor et al., 1997) or stars (Call, Nyberg, & Thatcher, 2015; Kehoe,
Lepak, & Bentley, 2016), there remain substantial questions regarding talent,
such as: How much does talent matter? How can we evaluate an employee’s con-
tribution to the organization? How does talent combine to affect the organiza-
tion? Some of these types of questions fall within the realm of human capital
resources (we discuss this later), but overall much more needs to be done in terms
of examining talent as it pertains to driving organizational performance.
Increasing Skills Gaps in Labor Markets

Simultaneous with the increasing need for talent has been the observed increasing
skills gap in labor markets. These skills gaps are exasperated by the increasing role
of technology in the workplace. Thus, situations arise whereby we simultaneously
see high unemployment and high employer need in the same region. Coupled
closely with the skills gaps challenges are the ever increasing specialization of the
workforce (coupled with increasingly outsourcing non-strategically crucial jobs;
Klaas, McClendon, & Gainey, 1999). Most predictions are that these challenges
will increase over time and that companies are not well prepared to address such
challenges. The relevant questions fit well within the potential research considera-
tions for SHRM, but so far little attention is directed to these topics.
In combination, these questions demand more research and explanation in
terms of how organizations overcome these challenges (e.g., training). However,
while some research acknowledges these challenges, SHRM research remains rel-
atively quiet about how companies address these issues and what means for long-
term strategic importance, beyond the early theoretical (Lewin & Mitchell, 1995)
and descriptive (Klaas et al., 1999) work. This area has seen minimal work, and
what work there is primarily takes the organization’s perspective in terms of how
jobs are changing (Cappelli & Keller, 2013), leaving a need for SHRM researchers
to make substantial progress.
These trends in the competitive environment call for new avenues for research
in SHRM. However, such trends also create tensions for how such research should
proceed. We raise these to illustrate the challenges that future SHRM research
must address if it is to move the field forward in this new environment.
Tensions for SHRM Research

We refer to tensions as seemingly contradictory or paradoxical areas of concern,
where researchers seem forced to focus on one side of the tension or the other. For
instance, as discussed below, early SHRM research distinguished between “com-

mitment” and “control” approaches to employee relations (Arthur, 1994). These
were viewed first as different approaches, but then became assumed as different
ends of the same spectrum. Researchers then focused on the impact of “high
commitment” HR practices, ignoring practices that might focus on controlling
employee behavior. While researchers have the luxury of narrowly focusing on
one side of the tension or another, firms must simultaneously manage these ten-
sions as they seek to attract, motivate, develop, and retain a workforce that sup-
ports the capabilities required by the strategy. Because SHRM researchers have
tended to focus on one side of the tension as if in isolation from the other, the
field has been far less impactful on practice as it could have been. We suggest that
revolutionary SHRM research will require simultaneously addressing both sides
of the tensions in ways they provide more useful knowledge for those seeking to
manage people as a source of competitive advantage.
Human Capital/HR Practices

As previously mentioned, Wright and McMahan’s (1992) definition of SHRM
encompassed both the people and the practices used to manage them. However,
after Huselid’s (1995) seminal study on HR practices and performance, the field
quickly shifted its focus from people to practices (Wright & McMahan, 2011).
This caused Kaufman (2015c) to note that the field became “more tightly organ-
ized around and focused on the HRM – Performance relationship” (p. 404).
Hundreds of studies have appeared exploring the relationship between HR prac-
tices and performance, but far fewer attempt to measure any aspect of the peo-
ple that are the focus of those practices. Rather, these studies explore the direct
link between HR practices and performance and theorize a causal mechanism
through aspects of people. Another way to think about this is that while research-
ers often take either an employee or an organizational competitiveness perspec-
tive, organizations do not have the luxury of considering one side independently
of the other, and instead must think in terms of strategically using employees to
achieve competitiveness (Nyberg & Wright, 2015).
In recent years a number of authors have begun to rebalance the focus on the
people that comprise the workforce (Nyberg & Wright, 2015; Nyberg, Moliterno,
Hale, & Lepak, 2014; Ployhart, Nyberg, Reilly, & Maltarich, 2014; Wright, Coff, &
Moliterno, 2014) in addition to the practices used to manage them. However,
the tension remains that SHRM research needs to assess both relevant charac-
teristics of people that drive firm performance, and the practices used to manage
those people. To only assess HR practices (as much of SHRM research has done)
or primarily assess characteristics of people (as much of strategy research has
done) as drivers of performance provides an incomplete picture of the entire
SHRM process.
For instance, Ployhart et al. (2009) examined the role of hiring and assessing
individual employee competencies, and then showed how specific HR practices
both increased individual competencies and, in the aggregated, translated into
unit performance. In another example, Nyberg (2010) examined both pay and
promotion practices as well as individual characteristics and responses to those

practices. Specifically, he found that high-performing employees were more sen-
sitive to pay and promotion changes than low-performing employees. This sen-
sitivity was born-out both in terms of the employee satisfaction and employee
decisions to leave the firm.
The tension between choosing to focus on the human capital versus the HR
practices can be more challenging than focusing on either alone for three pri-
mary reasons. First, it is simply more difficult to acquire the necessary data to
incorporate inputs that may drive employee behavior and attitudes along with
unit performance. However, such data are necessary to draw conclusions about
the effectiveness of HR practices on both the employee and the unit. Second, the
analysis to derive such conclusions is likely to be more involved than research at
either the human capital or the HR practice alone because it will almost always
need to involve longitudinal considerations. Third, the conceptualization or the
theorizing about relevant relationships is also more complex than is theorizing
about either piece alone because it requires considering the causal mechanisms
driving both human capital and HR practices and thinking about how these two
distinct constructs influence and are influenced by each other – this necessarily
raises multi-level issues, including issues of emergence.
Thinking about the role of human capital generally involves invoking micro-
or psychological based theorizing. In contrast, thinking about HR practices,
particularly when in terms of how these practices affect organizational competi-
tiveness, demands considering more macro-based (or strategy-based) theorizing.
As many SHRM researchers are not necessarily deeply trained in both micro- and
macro-literatures, fully understanding and integrating both perspectives can be
extremely challenging. However, a failure to do so (or even merely dabbling in one
or the other) can lead to research that overly simplifies the causal explanations.
Differentiation/Integration
Early SHRM research seemingly treated HR systems as monolithic, one-size-fits-
all approaches to how firms seek to manage their workforces. For instance, Miles
and Snow (1984) posited the HR systems associated with defender, prospector,
and analyzer strategic types. Baird and Meshoulam (1988) described how HR
systems evolved as organizations grew through different life cycles. Lengnick-
Hall and Lengnick-Hall (1988) juxtaposed corporate growth expectations with
organizational readiness to propose productivity, expansion, development, and
redirection HR strategies.
Empirical research began to recognize the differentiation among different
HR systems for different jobs within firms. For example, Huselid (1995) asked
respondents to indicate the percentage of employees covered by various HR prac-
tices, but he broke these up into Managerial/Professional/Technical and Hourly,
asking for separate ratings for the two categories. Both MacDuffie (1995) and
Delery and Doty (1996) focused on the HR systems used only for “core jobs”
implicitly recognizing that other jobs would have different HR systems.
However, the first clear attempt to differentiate HR systems among jobs came
from Lepak and Snell (1999). They developed a human capital architecture model
with two dimensions: strategic value of the skills and uniqueness of the skills.
This four-quadrant model then proposed four different employment modes
(develop, acquire, contract, and alliance), employment relationships (organiza-
tional, symbiotic, transactional, and partnership), and HR configurations HR
systems approaches (commitment, market-based, compliance, and collaborative,
respectively). This was the first thorough depiction of the differentiated nature of
HR systems within organizations.
Differentiation has also been accelerated by the “War for Talent.” Chambers
et al.’s (1998) War for Talent report described how the nature of competition
had moved from customers to the workforce, and that for companies to succeed
going forward, they needed to focus on acquiring and retaining the best talent.
Combined with the popularity of GE’s forced distribution ranking system to push
differentiation in pay, the differentiated nature of jobs and HR systems attained
increasingly greater research interest.
While this research and practice recognized the need for firms to differenti-
ate a number of aspects of the workforce, what was ignored was any attempt at
integration. As Katz and Kahn (1966) noted, firms constantly grow into more dif-
ferentiated entities, but this increasing differentiation requires integrating mecha-
nisms for firms to sustain success. As firms differentiated HR systems (with high
pay, high perks, elite development programs for “talent” and low pay, decreased
benefits, decreased development for lower level employees), this created difficulty
in building cultures of trust and strong management–employee relations. When
lower level employees feel potentially exploited to push more resources to “elites”
within the firm, engagement and alignment suffer (Kaufman, 2015c).
SHRM research has successfully addressed differentiation issues through
either focusing on particular jobs within the firm or assessing HR systems for
more than one job category within the firm. However, to date little attention
has focused on the intended and unintended outcomes of this differentiation.
For instance, the recent interest in income inequality has resulted in the new
legislative requirement that firms report the “pay ratio,” that is, the ratio of the
total compensation of the CEO relative to the median employee in the firm.
Those supporting this pay ratio reporting believe that it will create incentives
for firms to lower CEO pay and create less inequality within the firm. Whether
or not this occurs, simply making the pay ratio public should elicit reactions
throughout the organization. Hourly employees may be resentful, decreasing
their engagement and extra-role behaviors. Executives may react positively, see-
ing opportunities for greater wealth as they move higher in the organization.
Thus, research crossing levels of the firm can provide unique insights regarding
the impact of pay differentiation.
More interesting than the outcomes of this differentiation may be the integrat-
ing mechanisms firms use across differentiated jobs, and HR systems. How much
differentiation exists within the firm, and how well known are the different aspects
of the differentiation (e.g., salary, perks, benefits, etc.)? How do these differentia-
tions affect sorting and motivation across different job types and responsibili-
ties? Additionally, how do firms share this information with employees? Further,
when these differences are known, how do firms communicate the rationale for
this differentiation? This opens new avenues for research. First, studies can focus
on the practices firms use to create integration from a descriptive standpoint.
Second, researchers can explore the effectiveness of these practices in generating
outcomes such as employee alignment, engagement, and retention.
Fit/Flexibility
One of the assumptions of early attempts to examine SHRM was that HR
practices have to “fit” with strategy (Wright & McMahan, 1992) or some other
aspect of the firm (Baird & Meshoulam, 1984; Lengnick-Hall & Lengnick-Hall,
1985). Nadler and Tushman (1980) defined fit as “the degree to which the needs,
demands, goals, objectives, and/or structure of one component are consistent
with the needs, demands, goals, objectives and/or structure of another compo-
nent” (p. 40). Venkatraman (1989) presented a framework for categorizing a vari-
ety of models of fit. SHRM researchers have tended to view fit as one of what
Venkatraman referred to as “criterion specific” models, meaning they concep-
tualize fit as having an impact on some criterion. Fit as moderation resembles a
contingency view, such that the impact of one variable on the criterion depends
on the level of the other variable. This is normally tested through moderated
regression. For instance, testing if the impact of HR practices on performance
depends on the strategy of the business would be a fit as moderation view. Fit as
mediation refers to the logic that the impact on one variable on the criterion is
through another variable. For instance, fit as mediation is exemplified by research
on the impact of HR practices on performance through some mediating vari-
able. This is usually tested through mediation tests such as those proposed by
Baron and Kenny (1986). Finally, fit a profile deviation suggests that some ideal
configurational profile exists and that the extent to which a firm deviates from
that profile will result in lower performance. In a sense, research on HPWS has
implicitly used this model of fit, as researchers specify a set of practices they
believe lead to higher performance and then correlate how many practices a firm
uses to performance.
However, little academic research actually demonstrated any support for such
fit (Wright & Sherman, 1999). In his data, Huselid (1995) assessed “fit” in a num-
ber of the ways that Venkatraman (1989) had proposed but was unable to find an
effect. MacDuffie (1995) found some support for “bundling” HR practices with
team-based work systems and low inventory buffers. This tested the bundling
through using a fit as moderation logic. Similarly, Youndt et al. (1996) found
some fit between some HR practices and aspects of manufacturing strategy using
a fit as moderation view. Finally, Delery and Doty (1996) found some support
for a “contingency” (i.e., fit as moderation) model and also tested a fit as profile
deviation (ideal configuration) model but found most support for a universalistic
(best practices) approach.
In spite of these studies, the bulk of research has supported the efficacy of a
universalistic application of HR practices. This lead Guest, Wright, and Paauwe
(2013) to state:
[...] reviews of research findings have consistently shown that, irrespective of business strat-
egy and context, there is a positive association between the adoption of more ‘progres-
sive’, ‘high performance’ or ‘high commitment’ HR practices and organizational outcomes.
(pp. 197–198)
Wright and Sherman (1999) hypothesized that this relative support for uni-
versalistic over contingency (fit) models of HR and strategy likely stemmed from
the generic nature of the HR practice items used. For instance, simply asking
“Number of hours training per year” or “Use of validated selection systems”
should not necessarily vary between an operational efficiency and customer inti-
macy strategy. However, one would expect the content of the training (lean six
sigma vs customer service) or characteristics assessed (ability to follow rules vs
customer orientation) to vary. However, the latter have not been assessed in most
research. They proposed a model that might focus on the “products” of HR prac-
tices (i.e., the target competency or behavior the practice is aimed at eliciting) that
might better enable researchers to study the fit between HR practices and strategy.
On a positive note, studies are beginning to emerge with a fit-based assessment
despite not being able to examine how strategy might moderate the relationship
between practices and performance. In an early effort at this, Collins and Clark
(2003) assessed “Network Building HR Practices” that included “[…] training,
performance assessment, and rewards designed to help and encourage top man-
agers to build relationships with internal and external actors” (pp. 743–744). They
found that these practices were related to managers’ social networks, which were,
in turn, related to firm performance. More recently, Kehoe and Collins (2017)
explored both HPWS and more specific relationship-oriented HR practices. They
found that: “[…] the positive relationship between the high commitment HR sys-
tem and unit performance is mediated by employees’ collective organizational
commitment, firm-specific human capital, and access to knowledge in other
organizational units; whereas the positive relationship between the relationship-
oriented HR system and unit performance is mediated by units’ access to knowl-
edge within the unit, in other units, and outside the organization.” These studies
indicate that more targeted measures of HR practices aimed at eliciting specific
“products” are related to those products, and those products mediate the relation-
ship between the HR practices and organizational outcome.
While these studies are promising, the changing external and internal environ-
ment might suggest that an overemphasis on one way of doing things could result
in dysfunctional outcomes over time. For instance, Sanchez (1995) defined flex-
ibility as “a firm’s abilities to respond to various demands from dynamic competi-
tive environments” (p. 138). SHRM research has certainly addressed flexibility
in a cross-sectional way. Numerous studies (Beltrán-Martín, Roca-Puig, Escrig-
Tena, & Bou-Llusar, 2006; Bhattacharya, Gibson, & Doty, 2005; Ketkar & Sett;
2009; Ngo & Loi, 2008; Way et al., 2015) have assessed HR flexibility and demon-
strated its relationship with performance. However, two aspects of flexibility have
been underdeveloped.
First, most treatments of flexibility consider it a slack resource. Consequently,
developing and maintaining the resources incurs costs for the organization. These
resources provide value when firms face environmental change as they provide
the capability to more quickly and efficiently adapt to those changes relative to
firms that do not possess such slack resources (Kim & Ployhart, 2014). However,
because these resources have costs, they would be financially disadvantageous
when organizations do not face change. Thus, the theory underlying flexibility
suggests that it provides value (i.e., is positively related to firm performance) in
industries characterized by dynamicity, but do not (and, in fact, are negatively
related to firm performance) in stable industries. Yet, until recently all of the
research exploring HR flexibility has simply tested for the positive relationship
with firm performance. For instance, Way, Wright, Tracey, and Isnard (in press)
explored the moderating role for industry dynamicity, and found a positive rela-
tionship between HR flexibility and performance in dynamic industries, but not
in stable ones. Clearly, more research needs to explore the basic theoretical propo-
sition that flexibility only provides value in dynamic industries.
Second, and more importantly, Wright and Snell (1999) noted that the con-
struct of flexibility can best be measured and tested over time because “evidence
that flexibility existed at time 1 is best obtained by observing a successful adapta-
tion to an environmental change at time 2” (p. 758). Thus, the only true test of
the value of HR flexibility would entail assessing flexibility (as a capability) at
one point in time, and then examine adaptations and performance following a
significant environmental change. Such longitudinal research does not yet exist,
and would be difficult to conduct, but only such research can truly assess the
impact of HR flexibility.
Commitment / Control
In one of the earliest studies of HR practice, Arthur (1992) examined how dif-
ferent strategies were associated with HR practices. Using a sample of steel mini-
mills, he used cluster analyses to identify six different clusters of organizations
using similar HR systems. Based on the work of Walton (1985), he collapsed the
clusters into two: cost-reducers and commitment-maximizers (which he later reti-
tled them control and commitment; Arthur,1994). He then found that mills with
business strategies stressing the manufacture of few products in large quantities

were likely to use a control strategy, but those focused on flexible manufacturing
and products marketed on some basis other than cost were more likely to use a
commitment strategy. He later (Arthur, 1994) found that mills using the control
strategy had lower productivity, higher scrap rates, and higher employee turnover
compared to those using the commitment strategy.
This, combined with Huselid’s findings regarding HPWS, Delery and Doty’s
(1996) results showing support for an HPWS-oriented system resulting in higher
performance, and MacDuffie’s (1995) support for bundling commitment-type
practices with work systems suggested that of the two types of HR strategies, one,
the commitment-oriented, was clearly preferable. These empirical results com-
bined with an ideological preference for “high road” as opposed to “low road”
HR approaches, set the field off on a chase to find continued support for the fact
that organizations should seek to implement HR systems that elicited commit-
ment from employees and should eschew approaches aimed at control.

However, recent research has begun to question this ideologically based para-
digm. This paradigm assumes that HR systems are either/or… either commitment
or control. Because Arthur (1992, 1994) used cluster analysis, his results forced
mills into either a commitment or a control strategy category. Later research used
continuous scales, but the assumption became that the items represented com-
mitment-oriented practices, and the absence of those practices implied control.
Su and Wright (2012) developed a scale of HR practices that included the tra-
ditional commitment-oriented practices, and added some control-oriented prac-
tices (e.g.., disciplinary procedures). They found that the commitment practices
significantly predicted firm performance, but that adding the control practices
resulted in significant additional explained variance beyond that of the commit-
ment practices alone. This led Su, Wright, & Ulrich (in press) to develop a typol-
ogy of HR systems based on a two dimensional (control and commitment) model.
They found that the highest performance was observed among firms simultane-
ously implementing commitment and control HR practices.
These results were all observed among firms in China. This leads researchers
to question whether the setting provides a boundary condition to their theory
and results. However, when looking at their control HR practices (punishment
for violating rules/regulations, emphasis on work rules and procedures, and closer
employee supervision than competitors), one would be hard pressed to argue
against the fact that all firms use them in one form or another. This speaks for
future research that moves beyond the purely commitment-oriented measures of
HR practices to also include practices that show how firms also seek to control or
guide employee behavior.
Individual / organizational
The field of SHRM began with an emphasis on the organizational level of analy-
sis. In contrast to traditional HRM research that largely examined practices at
the individual level of analysis, early and subsequent SHRM writers sought to
emphasize and explore how firms sought to manage their workforces in ways
that would positively impact performance. Thus, the research in this area tended
to focus on the firm (Huselid, 1995), business unit (Wright et al., 2005), or plant
(Arthur, 1992) levels of analysis.
However, more recent research has acknowledged that, while the focus is on
organization-level outcomes, the processes through which HR practices impact
firm performance take place within individuals. For instance, Nishii, Lepak, and
Schneider (2008) found that employees make attributions regarding the firm’s
motivation for implementing certain HR practices, and that these attributions
influence how they react. Wright and Nishii (2013) developed a comprehensive
model for how HR practices impact firm performance using a traditional “bath-
tub” approach crossing levels of analysis. These authors described the “intended”
HR practices as those that the firm has designed to be implemented for a given
set of employees. However, they recognized that supervisors may differ in how
they implement HR practices across their direct reports, and referred to theses as
the “actual” HR practices. They then noted that even if these practices were uni-
formly implemented, employees would interpret them (and consequently react)
based on their previous experiences, and thus, labeled these as “perceived” HR
practices. They then noted that individuals perceiving the same practices may
interpret them differently based on their previous experiences, and consequently
noted that “employee reactions” (both affective and behavioral) determine the
extent to which the practices were effective in driving organizational outcomes.
Finally, they recognized that individuals behave in an interdependent social con-
text and that firms must seek to coordinate behavior across individuals to result
in firm-level consequences.
Other research has sought to develop multilevel frameworks that explain
how HR practices shape individual characteristics (including Knowledge, Skills,
Abilities, and Other characteristics (KSAOs) and attitudes), which in turn come
to influence individual and collective outcomes. For instance, Ployhart (2004)
proposed a multilevel model of selection, where selection practices influence
individual KSAOs that come to form collective human capital resources. These
human capital resources then influence firm performance and competitive advan-
tage. The model by Lepak, Liao, Chung, and Harden (2006) has been particularly
influential because it connects multiple HR practices to individuals, collective
processes, and firm strategy (e.g., differentiation) and performance. An important
feature of their framework is explicit recognition that different HR systems will
be used to achieve different strategic goals. For example, there are HR systems for
control, different HR systems for commitment, and different HR systems for cus-
tomer service. These different strategic foci then shape the manner in which HR
policies are emphasized and thus the specific HR practices that are used.
While these models recognize how individuals interpret, react, and are shaped
by HR practices, they are all silent about how human capital resources emerge
from individual KSAOs (Nyberg et al., 2014). A major challenge has been to
understand how individuals with distinct skills, perspectives, and motivations
can form collective human capital resources — that is, the process of human cap-
ital resource emergence (Ployhart, 2006). Ployhart and Moliterno (2011) devel-
oped a multilevel model of human capital emergence to explain this process.
Their model proposes that whether human capital resources will emerge from
individual KSAOs is dependent on an emergence enabling process. One part
of the process is the complexity of the task environment. When work requires
greater interdependence and interaction, there is a greater opportunity for
human capital resources to emerge. The second part of the process is the nature
of emergence enabling states. Emergence enabling states are affective (e.g., cohe-
sion), cognitive (e.g., shared knowledge), and behavioral (e.g., coordination)
states that either support or diminish the likelihood of resource emergence.
A key prediction of this model is that general human capital resources are deter-
minants of specific human capital resources, which are themselves the proximal
determinants of performance.
Ployhart et al. (2014) sought to take these insights further to clarify what
human capital resources are and what they are not. There has been quite a bit
of confusion in the research literature about the definition, antecedents, conse-
quences, and boundary conditions of human capital resources (Nyberg et al.,

2014). Ployhart et al. (2014) demonstrated that human capital resources exist
at either individual levels or collective levels. They further distinguished human
capital resources that are relevant for operational performance, from strategic
human capital resources that are relevant for competitive advantage. Human
capital resources are thus defined as, “individual or unit-level capacities based
on individual KSAOs that are accessible for unit-level purposes.” (p. 374). A key
insight from this study is that all collective human capital resources are likely
to be inimitable, due to the emergence process and the complementarities that
result from this process. Additionally, this paper clarifies that the human capital
resource is considered, in contrast to human capital, from the perspective of the
firm rather than the individual.
This focus on the tension between individual and organizational levels of anal-
ysis in SHRM speaks to a few future research issues. First, team’s research has
explored a variety of compositional models for how individual skills aggregate
to the higher level construct. For instance, different models suggest that a team’s
capability is constrained by the lowest skilled person (weakest link), is a function
of the average skills of all members, or is influenced more by the highest skilled
person (Chan, 1998). Up to now, most empirical research in SHRM has simply
used the average skills of the group as the compositional model. However, this is
unlikely to be the best and most accurate model for understanding how human
capital aggregates to the human capital resources.
Second, Ployhart and Moliterno’s (2011) human capital resource emergence
model presents a detailed description of the psychological and social processes
that take place. However, no empirical work currently explores these processes
in detail and over time at anything higher than the group level. Some studies use
the model as a way to explain how coordinated behavior might emerge (Harris,
Wright, & McMahan 2017), but they do not address the specific constructs pro-
posed by the model. While conducting a comprehensive test of the model may
not be possible, future research needs to explore one or more processes over time
as a means of assessing the extent to which the model accurately describes the
emergence process.
Third, through considering the human capital resource and its emergence,
it is necessarily the case that this involves multilevel theorizing. For instance, to
understand how the human capital resource forms (emerges) to affect organiza-
tional outcomes, it becomes clear that the mechanisms affecting this emergence
are psychologically based. As Nyberg and Ployhart (2013) noted, the emergence
process will be affected by both the incoming and outgoing personnel and by
the manner in which both organizational and social groups form. This also means
that the emergence process will both be affected by and affect the unit’s culture.
However, very little research to date has examined deeply how such groups emerge.
To understand how these processes work, it is necessary to examine how within
level combinations form simultaneously with how cross-level combinations form
(Ployhart et al., 2014). In describing these processes, Ployhart et al. (2014, Fig. 2)
layout examples of how these human capital resources can develop both within
and across levels. They further discuss both composition (additive) and compila-
tion mechanisms for such aggregation, noting that in addition to the individual
pieces (e.g., employees), the type of combination (interaction complementarity vs
causal complementary), the level at which the combination is examined, and the
process by which the combination occurs will all affect the human capital resource.
Fourth, each of these components will also be affected by and affect the
organization’s climate and culture. Hence, understanding and incorporating
climate and culture also necessarily becomes an important line of research in
understanding the relationship between the individual and the organization. For
instance, in examining the organization, the climate (e.g., a climate of trust) can
help drive collaboration, shape the human capital resource and ultimately influ-
ence the unit’s performance. However, as collective turnover occurs it can disrupt
a climate of trust, which in turn can lead to additional collective turnover, which
further depletes the human capital resource, and in combination can reduce the
organization’s performance. The challenge of researching both individual and
organizational considerations simultaneously involves considering the continu-
ous and recursive relationships, both theoretically and analytically.
Conclusion
SHRM research has evolved over time. For instance, in recent years, the field is
increasingly seeing a number of rigorous empirical studies. While much of the
empirical attention has focused on the HR practices – performance relationship,
we happily recognize that the human capital concept has re-emerged in the field.
Thus, the field’s empirical and theoretical foundations have made great strides.
However, trends within the external environment require that this research push
the boundaries considerably further.
We identified four key tensions facing the field going forward. These tensions
can be seen in that there seem to be research streams that look at one side of
the tension (e.g., HR practices, fit, and commitment) or the other (e.g., human
capital, flexibility, and control) but not both. We suggest that combining stra-
tegic HR practices with strategic human capital can begin to revolutionize our
understanding of how firms manage people as a source of competitive advantage.

Exploring how firms create flexible practices and people that can adapt to create
fit under a variety of external conditions can modernize our research to match the
constant environmental change firms face. Expanding our view of HR practices
from the ideologically based preference for commitment to a more realistic recog-
nition of the need to control employee behavior can alter our understanding of
how firms create organizational capabilities. Finally, recognizing that individuals
bring unique skills, histories, and perspectives to the workplace, but that these can
be altered and adapted through social emergence processes can transform how we
explore the development of capabilities. The realities of organizations requires
that we eschew these either/or distinctions to theorize and empirically examine
both simultaneously. Only then can we both accurately describe how organiza-
tions seek to manage these apparent paradoxes and provide better prescriptions
for how they can do so effectively.
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Wright Et Al. 2018 A Research Revolution in SHRM Research in Personnel and Human Resources

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Research in Personnel and Human Resources

Access to this document was granted through an Emerald subscription provided by

Patrick M. Wright, Anthony J. Nyberg and

Research in strategic human resource management (SHRM) has evolved

The field of strategic human resource management (SHRM) is young compared

Research in Personnel and Human Resources Management, Volume 36, 141–161

be characterized more as evolutionary than revolutionary. For instance, the field

the challenges that organizations face in seeking to strategically manager their

The SHRM Field

(1994) categorized steel mini-mills into using either “control” or “commitment”

plants bundling “high commitment” HR practices with team-based work systems

Trends Impacting SHRM in Organizations

Increasing Globalization of Firms and Markets

for understanding how SHRM leads to organizational performance in ways

Increasing Importance of Talent as a Competitive Necessity

Increasing Skills Gaps in Labor Markets

Tensions for SHRM Research

instance, as discussed below, early SHRM research distinguished between “com-

Human Capital/HR Practices

promotion practices as well as individual characteristics and responses to those

business strategies stressing the manufacture of few products in large quantities

ment from employees and should eschew approaches aimed at control.

quences, and boundary conditions of human capital resources (Nyberg et al.,

understanding of how firms manage people as a source of competitive advantage.

voluntary turnover relationship. Journal of Applied Psychology, 95(3), 440–453.

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