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Keywords:

Strategic human resource management, Human resource alignment, HR strategy

Abstract:

This paper studies the moderating effect of flexibility on the relationships between different strategic HR alignment strategies and firms’ productivity, by using longitudinal data on 492 medium-sized and large enterprises. We make a distinction in two HR strategies. First, the outside-in HR strategy refers to adjusting human resource practices to strategic objectives and the competitive strategy. Second, the inside-out strategy means that the firm adapts competitive strategies to human resource strengths and weaknesses. The results showed that the outside-in approach had beneficial effects on firm productivity. This impact was strengthened by HR flexibility. The strongest effects on firm productivity were found in combining both alignment strategies. Finally, we found that an inside-out HR strategy had beneficial indirect effects on the share of personnel costs in the value added, through the value added per employee. However, adverse direct effects complemented this effect, when the firms did not dispose of enough strategic flexibility, but did implement strategic planning.