Human resource management and corporate performance in the UK

The relationship between HRM and performance was explored in 366 UK companiesusing objective and subjective performance measures and cross-sectionaland longitudinal data. Using objective measures of performance, greater use ofHRM is associated with lower labour turnover and higher profit per employeebut not higher productivity. After controlling for previous years’ performance, the association ceases to be significant. Using subjective performance estimates, there is a strong association between HRM and both productivity and financial performance. The study therefore confirms the association between HRM and performance but fails to show that HRM causes higher performance.