Mediating effects of person–environment fit on the relationship between high-performance human resource practices and firm performance

Purpose: Drawing on the interactionist approach and interest alignment theory, this study aims to examine the mediating effects of three dimensions of person environment fit – person–organisation fit, person–job fit and person–supervisor fit – on the relationship between high-performance human resource practices (HPHRP) and firm performance. Design/methodology/approach: Survey data obtained from 3,014 employees of research and development units and 721 senior HR executives and top management team members belonging to 274 Indian-based pharmaceutical firms is analysed to investigate a mediated pathway between HPHRP and firm performance. Findings: The findings of the current research established that HPHRP was positively and significantly related to person–organisation fit, person–job fit and person–supervisor fit, and this facilitates firm performance and curtails employee turnover. Originality/value: The current work firmly establishes a link between human resource management with firm performance using interactionist approach. Implications of the study to theory and practice are discussed.