Multiple dimensions of human resource development and organizational performance

Abstract

Building on strategic human resource management literature, this study investigates the effects of various human resource development (HRD) dimensions on organizational performance. We identify four distinct dimensions of HRD that reflect either quantitative or qualitative approaches from either managerial or employee perspectives. Furthermore, we propose that HRD affects organizational performance by shaping employee outcomes, a prevailing but rarely tested assumption. Multi-source data collected from 207 manufacturing companies at three time points over a 5-year period largely support our theoretical propositions. A series of structural path analyses confirm that HRD improves employee commitment and competence, which in turn determine the financial performance of the organization. The quantitative dimensions of HRD (resource investment in HRD) predict only employee commitment. By contrast, the qualitative dimensions of HRD (management support for, and perceived benefits of, HRD) enhance both employee commitment and competence. Our analysis also demonstrates synergistic interactions between the quantitative and qualitative dimensions of HRD in predicting employee outcomes. This study elaborates the distinct values of different dimensions of HRD and highlights the significance of employee outcomes as the mediating mechanism between HRD and firm performance. Copyright © 2014 John Wiley & Sons, Ltd.

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