The Effect of Strategic Human Resource Management on Organizational Performance: A Correlational Meta-Analysis

The Effect of Strategic Human Resource Management on Organizational Performance: A Correlational Meta-Analysis

Rex Lord V. Ranalan

University of Southeastern Philippines

DOI: https://dx.doi.org/10.47772/IJRISS.2025.906000329

Received: 10 June 2025; Accepted: 17 June 2025; Published: 15 July 2025

ABSTRACT

The study is conducted due to knowledge gap of the context, pooled effect of strategic human resource management (SHRM) on organizational performance. A quantitative research design utilizing meta-analysis is used wherein a two-stage process undertaken as part of its procedure which are: Systematic Literature Review adapting PRISMA approach and the Coding Procedure where standard meta-analysis (correlational) and sub-group analysis are utilized. Results indicate that the effect size across the included studies is significant, having a large positive effect, but with a significant variation in true effect sizes of SHRM on organizational performance. The said variation is further validated based on the conducted subgroup analysis. Lastly, both standard and subgroup meta-analytic result shows no publication bias. The result of the study will contribute to the existing research on SHRM and organizational performance in terms on meta-analytic procedure. As such the study suggests that HR practitioners in different countries must localize their HR strategies instead of applying universal practices gearing to improved performance across diverse markets. Limitations of the study can be seen in the inclusion criteria while conducting the systematic literature review and the capability of the type of meta-analytic procedure used, correlational. However justifications are made as to the way how the study is being conducted, data gathered, and statistical analysis to ensure reliability of the study.

Keywords: SHRM, Organizational Performance, Correlational Meta-Analysis, Sub-Group Analysis, Heterogeneity, Publication Bias

INTRODUCTION

Organizations strive to sustain against competition, and to compete, organizations must continually improve their performance (Ludwikowska, 2021). Improving organizations’ performance merely relies on the kind of practices they hold and how their resources are managed both efficiently and effectively. This led to continued research in determining what affects organizational performance and how it can be sustained. It is also a long-term concern in management as to which aspect of the organization, internal or external, tangible or intangible assets, human or non-human resources, greatly contribute to its performance.

From a Human Resource Management perspective, the people working in the organization are the most important resource, and organizational performance largely depends on them (Phiri et al., 2022). It is one of the greatest assets of any organization that ensures the achievement of its goals and objectives (Nandhini & Vimala, 2020). Moreover, in order for it to make a meaningful impact on organizational performance, specific and practical human resource policies and processes must be crafted and enforced effectively (Armstrong, 2008). However, people in the organization are comprised of diverse cultures and varied behaviors, leading to diverse outcomes. This constitutes the problem of black box, and to address it, organizations develop various strategies that relate to their most important resources, such as human resources. This is where strategic human resource management (SHRM) takes place.

The Strategic Human Resource Management (SHRM) sets the causality between human resource management activities, policies and how organizational strategies fit ensuring the attainment of organizational objectives. It plans and manages the durability and integration of human resources in organizations (Li et al., 2022). As such, SHRM flexibly adjusts its human resource policies and practices in response to changes in external contexts, thus providing strategic tools to promote resource integration, crisis prevention and control, and learning and innovation in organizations (Yu, et al., 2022).

Understanding the correlation of strategic human resource management (SHRM) and organizational performance is one of the enduring objectives of SHRM research (Chourasia et al., 2023). It is suggested among SHRM researchers that intensive empirical analysis should be done in determining the relationship between SHRM and organizational performance under different angles and contexts (Alaraqi, 2017). Though numerous studies have been conducted in determining SHRM and Organizational Performance under different settings, approaches, and quantitative designs, based on intensive electronic inquiry, a knowledge gap exists regarding the meta-analytic approach that determines the pooled effects of SHRM on organizational performance. This study will shed information on the degree of effect on the said relationship.

The study’s main objective is to assess the strength of evidence on the effect of SHRM on organizational performance using a meta-analytic procedure. Specifically, it aims to: (1) determine whether an effect exists; (2) determine whether the effect is positive or negative, large or small; and (3) obtain a single summary estimate of the effect.

LITERATURE REVIEW

Across researches in organization, several prominent theories exist that supports the relationship between human resource practices and organization’s performance. In the context of strategic human resource management, Resource-Based and Universalistic Perspective is among of the dominant theories that have implication on the performance of any organizations. This section presents the said theories which are as follows.

Resource-Based Theory

Resource-Based Theory (RBT) as advanced by Penrose (2009) sets the idea on how firm manage its resources effectively enclosed with diversification strategy in order to have a competitive advantage in its production. It is an influential approach in strategic management in which it maximizes the capabilities of an organization by strategically using its valued resources to gain a competitive advantage among others (Utami & Alamanos, 2023). Accordingly, these resources are internal to organizations that positively contribute to their performance.

Contextualizing the theory in this study, Resource-Based Theory aids organizations in their SHRM by determining the appropriate practices that leverage the capabilities of the organization’s resources, particularly its laborers, to become effective and productive. As such, it directs laborers to conform to the organization’s goals and objectives, leading to sustained competitive advantage and superior performance.

The Universalistic Perspective

The Universalistic theory argues that certain human resource practices directly and positively impact organizational performance (Harney, 2023). This theory mainly involves the analysis of isolated human resource policy towards organizational performance. This isolated human resource policy is the by-product of SHRM and becomes a best practice, which directs the specific role of its workers, ensuring a harmonized workforce environment that leads to improved organizational performance. Based on empirical research, six HR practices are consistently considered strategic and universalistic: recruitment, selection, compensation, employee participation, internal labor market, and training (Pfeffer, 1998).

In addition, this theory emphasized the performance relationship of SHRM by integrating policies like an appraisal of the performance (Delery & Doty, 1996) that ultimately affects the organization’s general performance. As such, this perspective asserts that organizations following the best practices in managing their workers’ skills, abilities, and knowledge will have a better performance level than the other organizations that do not have these practices (Duncan & Hoffman, 1981).

RESEARCH METHOD

This section sets the method used in analyzing the effect of SHRM in organizational performance using meta-analytic procedure. As a quantitative systematic review method, meta-analysis analyzes the statistical results of a large population of existing studies to generate a pooled effect on the relationship being examined (Glass, 1976). This procedure involves systematic literature review and data coding.

Systematic Literature Review

The starting phase of meta-analysis is to search for existing studies relevant to its focus using systematic literature review. This study follows the criteria of Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA). The steps included were (a) eligibility criteria, (b) information sources and search terms, and (c) study selection.

Eligibility Criteria                                                

Materials were eligible for inclusion if they were: (1) presenting empirical and conceptual evidence; (2) directly relevant to the effect of strategic human resource management on organizational performance; and (3) published in peer-reviewed journals between 2020 and 2024. The five-year recency period indicated follows the rule of thumb by Southern New Hampshire University in using published sources, primarily if the topic being focused on is in rapidly evolving fields. Studies that were in a perceived structure or approach, which are not quantitative and correlational in design, that are in literature review and essays, that are not published or written in English, and that are not available in full texts are excluded from the study.

Information Sources and Search Terms

Google Scholar, JSTOR, and ProQuest are prime sources for gathering studies. Articles including “strategic human resource management/SHRM + organizational performance” in the title, abstract, and full text were included. Only those references that shared the exact keywords in the search scheme of the database records were included.

Study Selection

Four stages are considered as part of the PRISMA study selection process. These involve: Identification, Screening, Eligibility, and Inclusion. Figure 1 presents the PRISMA flow of the study. Under the first stage, 105 studies are identified using search engines (Google Scholar and JSTOR) and database (Proquest). Out of 105 studies, only 103 remained after initial screening due to duplication. It was further screened, leaving 18 articles (excluded articles: those published before 2020 and having a perceived approach in the title). Of the 18 articles, one was not in full text, leading to 17 articles for eligibility. Out of 17 studies, only seven are included for final analysis due to other exclusion criteria.

Figure 1. PRISMA Flow of the Study

Data Coding Procedure

Information is extracted and coded after selecting the studies included in the analysis. Tables 1 and 2 present the meta-analysis’s study information and data summary, respectively. Two sets of information were coded in the analyses: the variance effect size information and sub-group information (Lipsey, 2009). The variance effect sizes, describing the standardized associations between strategic human resource management and organizational performance, were calculated into Fisher’s Z variance effect sizes. A random effect model is used to determine the effect size based on the assumption that the relationship between SHRM and organizational performance differs across organizations by the internal and external environment that sets the organization (Human Resource Management International Digest, 2019).

Table 1. Article Information

As to sub-group information, the industry types were extracted to examine their effect on the relationship between strategic human resource management and organizational performance. It is coded as Secondary and Tertiary, which refer to the secondary and tertiary industries.

Table 2. Data Summary for Meta-Analysis

RESULTS AND DISCUSSIONS

Table 3 shows the mean effect size estimated at 1.049 (95% CI: 0.559, 1.538) and is statistically significant (p < 0.001). This means that SHRM has a large positive effect (0.781) on organizational performance across studies. Q-statistics, Tau-squared, H-squared, and I-squared values were examined for heterogeneity. The Q-statistic (Q = 829.009, df = 6, p < 0.001) was statistically significant. In addition, Tau-squared, H-squared, and I-squared values were found to be 0.431, 89.281, and 98.9, respectively. This means that heterogeneity exists across studies. The Forest Plot in Figure 2 also affirms the said heterogeneity. This is supported by the study conducted by the Human Resource Management International Digest (2019), indicating that the impact of SHRM on an organization’s performance varies accordingly to internal and external factors. Regarding publication bias, it is of no concern since the intercept value based on the Egger’s test is 1.065 (p > 0.358) as presented in Table 4, suggesting no significant asymmetry and thus less evidence for bias.

Table 3 Effect Size Estimates for Standard Analysis

Table 4 Egger’s Regression-Based Test^a

Figure 2. Forest Plot for Heterogeneity

A subgroup analysis is conducted to identify and quantify the sources of the study’s heterogeneity. Table 3 presents the results indicating that the effect of SHRM on organizational performance is determined by the type of industry (secondary or tertiary) the firm or organization operates. This further indicates that the said variation can be seen mostly among secondary types with an effect size of 1.363 (95% CI: 0.649, 2.077) and is statistically significant (p < 0.001). However, the result of the homogeneity test indicates that the effect of SHRM on organizational performance is likely different across subgroups. It is of no concern regarding publication bias since the intercept value based on the Egger’s test is 1.065 (p > 0.358), suggesting no significant asymmetry and thus less evidence for bias.

Table 5 Effect Size Estimates for Subgroup Analysis

Table 6 Egger’s Regression-Based Test^a

CONCLUSION

Results indicate that the effect size across the included studies is significant, having a large positive effect as determined using the standard meta-analysis procedure. As such, the result shows a significant variation in true effect sizes of SHRM on organizational performance. The said variation is further validated based on the conducted subgroup analysis. Lastly, both standard and subgroup meta-analytic results show no publication bias, which minimizes the underrepresentation of published research findings.

Though publication bias is of no concern both on the standard and subgroup analysis, it is recommended that a separate analysis be done further to analyze the nature and magnitude of the subgroup effect since heterogeneity exists in both analyses. As such, the need to justify and further scrutinize the result of variation would help yield a result that would generalize the effect size of SHRM on organizational performance. Furthermore, it is recommended that multiple factors (firm demographics) and covariates (size of employees) be explored in addition to the type of industry used in the subgroup analysis to enhance further and provide a generalizable result.

Managerial And Theoretical Implications

Literature would agree that all organizations heavily rely on the capability of their laborers to do work despite the diversity of cultures and behaviors they have. Specific SHRM tailored to the organization’s context necessitates human resource practitioners to craft and respond to the diversity contributing to the organization’s performance. This study shows that the effect of SHRM on organizational performance differs across industries. This implies that studies included in the meta-analytic procedure vary differently, even under different locations, cultures, and environments. Human resource practitioners must conform their SHRM strategies to the local cultural and social environment so that their employees realize high-performance gains. The result of the study further suggests that HR practitioners under multinational and regional firms in different countries must localize their HR strategies instead of applying universal practices to optimize their employee productivity, gearing to improved performance across diverse markets.

For the theoretical implications, this research will contribute to the existing research on SHRM and organizational performance in terms on meta-analytic procedure. As indicated in the study gap, knowledge, this will provide insights as to the pooled association between SHRM and organizational performance. As such, the study results and the outcome of future studies (as recommended) will shed light on the disagreement between the universalistic and contingency approaches of SHRM, as they contribute to organizations’ performance.

REFERENCES

1. Alaraqi, A.K. (2017). Relationship between SHRM and organizational performance among Iraqi oil companies. Journal of Global Economics, 5:1. https://doiI: 10.4172/2375- 1000241
2. Armstrong, M. (2008). Strategic Human Resource Management: A Guide to Action (4th ed). London and Philadelphia: Kogan Page Limited
3. Chourasia, A., Bahuguna, P.C., & Raju, T.B. (2023). Strategic human resource management, a road to organizational performance: Evidence from public sector organizations in the oil and gas sector. International Journal of Organizational Leadership, 12(1), 66-90. CIKD Publishing: https://www.ijol.cikd.ca
4. Delery, J. E., & Doty, D. H. (1996). Modes of theorizing in strategic human resource management: Tests of universalistic, contingency, and configurationally performance predictions. Academy of Management Journal, 39, 802–835
5. Duncan, G., & Hoffman., S. (1981). The Incidence and Wage Effects of Overeducation. Economics and Education Review, 1: 75–86.
6. Eze, L.C., & Daniel,C.O. (2020). Strategic human resource management and performance of manufacturing firms in Nigeria. IOSR Journal of Business and Management, 22(5), 1-8. e-ISSN: 2278-487X, p-ISSN: 2319-7668
7. Giteru, A. M., & Bula, H. (2023). An empirical analysis of the relationship between strategic human resource management and performance: A perspective of Public Universities in Nairobi City County, Kenya. The Strategic Journal of Business and Change Management, 10(2), 383 –395. https://doi: 10.61426/sjbcm.v10i2.2605
8. Glass, G. (1976). Primary, secondary, and meta-analysis research. American Educational Research Association, 5(10), 3-8. https://doi.org/10.2307/1174772
9. Harney, B. (2023). Universalistic perspective. In S. Johnstone, & A. Wilkinson (Eds.), Encyclopedia of Human Resource Management: 401–403
10. Human Resource Management International Digest. (2019). Increasing the impact of SHRM on organizational performance: Why the firm’s context needs to be considered. Human Resource Management International Digest, 27(5), 7-8. https://doi.org/10.1108/HRMID-05-2019-0124
11. Li, Y., Zhang, L., & Yan, X. (2022). How does strategic human resource management impact on employee voice behavior and innovation behavior with mediating effect of psychological mechanism. Psychol.13:920774. https://doi: 10.3389/fpsyg.2022.920774
12. Ludwikowska, K. (2020). The mediating role of employee-oriented human resource policy in the relationship between strategic human resource management and organisational Forum Scientiae Oeconomia, 9(2), 131-150. https://doi: 10.23762/FSO_VOL9_NO 2_7
13. Mwaura, R.S.N., Kiruja, E.K., & Sagwa, E.V. (2022). Influence of strategic human resource management practices on performance of Public Universities in Kenya. Journal of Human Resource and Leadership, 7(2), 1-19. ISSN 2519-9099
14. Nandhini, B.R., & Vimala, B.S. (2020). Imperative role of human resource management in organizational activities. International Review of Business and Economics, 4(1). ISSN: 2474-   5146
15. Penrose, E.T. (2009). The theory of the growth of the firm. Oxford University Press.
16. Pfeffer, P. (1998). The Human Equation. Boston, Mass: Harvard Business School Press.
17. Phiri, K., Phiri, J., Mutono-Mwanza, B.G., and Mwange, A. (2022). Strategic human resource management practices and organisational performance: A case of the national assembly of Zambia. Open Journal of Business and Management, 10, 2461-2483. https://doi.org/10.4236/ojbm.2022.105124.
18. Titus, O., & Scholastica, W. (2023). Strategic human resource management practices and organizational performance of Unga Farm Care East Africa Limited. Int Journal of Social Sciences Management and Entrepreneurship, 8(1): 263-280. ISSN 2411-7323
19. Ugoani, J.N.N. (2020). Strategic human resource management and business performance in Nigeria. American Journal of Business and Society, 6(3), 128-137.
20. Utami, H., & Alamanos, E. (2023.) Resource-based theory: A review. TheoryHub Book. https://open.ncl.ac.uk / ISBN: 9781739604400
21. Yu, J., Yuan, L., Han, G., Li, H., & Li, P. (2022). A study of the impact of strategic human resource management on organizational resilience. Behav Sci (Basel), 12(12):508. https://doi:10.3390/bs12120508.