The Effectiveness of Strategic Human Resource Management in Increasing Firm Performance in Indonesia

In Indonesia, HR practitioners and academics believe that Strategic Human Resource Management (SHRM) has a direct and positive impact on firm performance. This belief is thought to be rather conventional, since numerous studies across the globe on the relationship between SHRM and firm performance have shown the inconclusive results. There are unknown factors called "black-box" between SHRM-firm performance relationships that need to clarify. This study therefore aims at analyzing the "black-box" that may play a crucial role in the relationship between SHRM-firm performances in Indonesia. In order to gain a wider understanding of the context of Indonesian companies, this study involves companies from various industries, and to better understand the HRM practices in the participating companies, this study employs multiple respondents ranging from the Supervisor to the Director levels. The main findings of this study reveal that the role of line managers in implementing HR systems and procedures, employees' competency, motivation and performance are confirmed to be strong significant mediating variables between SHRM and firm performance relationship