The impact of HR practices on the performance of business units

Abstract

the purpose of this study is to examine the relationship between HR practices and ®rm performance in a way that improves the causal inferences that can be drawn. This article goes beyond previous work in three ways. First, it examines the phenomenon at the business unit level, thus minimising the amount of potential `noise’ introduced when studying more heterogeneous HR systems across various businesses within corporations. Secondly, it uses more proximal measures of business unit performance rather than only the distal profitability or stock price measures. Finally, it uses a predictive research design enabling more con®dent causal inference