seen as a critical intangible asset in RBV (Barney and Wright 1998 ). Culture, often
deWned as embedded assumptions and shared values (O’Reilly and Chapman
1996 ), ‘function(s) both as [an] antecedent to the HRM system and as a mediator
of its linkage toWrm performance... [These] organizational assumptions and
values shape HRM practices which, in turn, reinforce cultural norms and routines
that can shape individual andWrm performance’ (Bowen and OstroV 2004: 205 ).
Gordon and DiTomaso ( 1992 ) use consistency of value-sharing as a test of strong
cultures. Values are likely to be articulated by senior management in part as a
reXection of their own, or the organization’s inherited, value system. It is these
values which, in part at least, are likely to shape HR architecture and HR practices.
Thus, the starting point is to identify these articulated values and then assess the
extent to which they are shared. This is similar, but not identical to, organizational
‘climate.’ This is deWned by Bowen and OstroV( 2004 : 205 ) as being ‘a shared
perception of what the organization is like in terms of practices, policies, proced-
ures, routines and rewards, what is important and what behaviours are expected.’
While Bowen and OstroVsuggest that ‘HRM practices and the HRM system will
play a critical role in determining climate perceptions’ ( 2004 : 205 ), it is just as likely
that culture and climate inXuence both the choice of HR practices and how these
practices are perceived by employees. This is an empirical question which has yet to
be answered. We need to measure culture/climate if we are to assess the relative
importance of these and HR practices and assess how the one mediates the other in
linking to performance. We have therefore placed it as a contextual ring outside the
central HRM causal chain, as shown in Fig. 26. 2.
26.4 Conclusions
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This chapter has focused on the problems experienced in seeking to assess the extent
to which HRM impacts on organizational performance. Paradoxically, many
researchers report positive associations but are unable to do so in a way which is
suYciently convincing to meet strict tests in the theory of causality or generate
suYciently robust evidence of either HR practices or performance. Four types of
substantive problems have been considered. First is the problem of performance
measures. These range from distalWnancial measures to proximal indicators, which
are more likely to be directly inXuenced by employees, and are thus more obvious
outcomes of HR practices. It is doubtful whether objective measures of performance
are necessarily the only outcomes of interest since longer-termWrm viability and, for
some, the maintenance of sustained competitive advantage is likely to require
Xexibility and agility. These requirements may inXuence the design of HR systems
as much as achieving shorter-term performance outcomes. In some cases, they may
hrm and business performance 547