Theorizing Human Resource Management and the Firm's Demand for HRM Practices

Abstract

Drawing on the economics and industrial relations literatures, this paper argues that the conventional conceptualization and theorization of human resource management, and the attendant empirical literature on the HRM-firm performance relationship, are likely to suffer from significant problems of mis-specification and limited domain. A new theoretical framework is advanced that generalizes the HRM concept, models the linkage between HRM practices and firm performance (the "black box"), generates an HRM input demand function and demand curve, and demonstrates how these analytic tools can explain major features of the distribution of HRM practices among firms and over time.