Bundles of HRM practices and performance: empirical evidence from a Latin American context

• DOI: http://doi.org/10.1111/1748-8583.12067
• Author: Alejandro Bello‐Pintado
• Published date: 01 July 2015
• Date: 01 July 2015

Bundles of HRM practices and performance:

empirical evidence from a Latin American context

Alejandro Bello-Pintado, Department of Business Administration, Universidad

Pública de Navarra-Spain

Human Resource Management Journal, Vol 25, no 3, 2015, pages 311–330

This article examines the extent to which the configuration of HRM practices in bundles and the

interactions among them have a significant impact on manufacturing outcomes. Using a unique data set

from a survey of a representative sample of the whole Uruguayan manufacturing industry, several

hypotheses related to interactions between ability–motivation–opportunity bundles of HRM practices are

tested. Analysis of 150 manufacturing plants partially highlights the existence of hierarchy between

bundles, being the bundle of motivation-enhancing HRM practices the most important to explain the

enhanced manufacturing outcomes. Based on this bundle of practices, synergistic interactions with both

ability and opportunity bundles of HRM practices were observed to explain different performance

measures.

Contact: Alejandro Bello-Pintado, PhD, Department of Business Administration, Universidad

Pública de Navarra-Spain, Pamplona 31006, Spain. Email: alejandro.bello@unavarra.es

Keywords: HRM systems; AMO framework; manufacturing performance; Uruguay

INTRODUCTION

While there is broad consensus about the critical role that the adoption of advanced

HRM practices plays in a firm’s success, there still is an open debate about the

configuration of HRM systems and their effectiveness. HRM systems incorporate a

highly integrated set of HRM practices. The system can be subdivided into bundles of HRM

practices, in which practices are aligned to achieve the goals of the organisation (Jiang et al.,

2012a). The bundling argument is built upon the notion that individual HRM practices do not

function in isolation, but work in concert so that employees are exposed to multiple practices

simultaneously (Huselid, 1995; Jiang et al., 2012b).

The strategic view of HRM has been emphasised in the positive contribution of bundles of

HRM practices, rather than individual HRM practices, to firm performance (Wright and

Boswell, 2002; Combs et al., 2006; Lawler et al., 2011). In support of this, MacDuffie (1995),

Huselid (1995) and Kepes and Delery (2007) argued that HRM bundles are the primary unit of

analysis when examining the impact of an HRM system on individual and organisational

outcomes. According to the ‘configurational’ approach, firms will perform better through both

internal and external appropriate fit. Internal fit refers to HRM practices incorporating bundles

in a consistent and coherent manner, while external fit refers to the alignment of practices in

bundles in accordance with firm’s strategy, institutional settings and other external factors

(Boxall and Purcell, 2000; Wright et al., 2005; Gooderham et al., 2008).

From this perspective, a widely addressed question is whether there is a best HRM system

with universal applicability or whether the configuration of bundles is contingent on internal

and external factors of companies (Becker and Huselid, 1998; Lawler et al., 2011). Empirical

evidence point out how hard it is to address this question. Combs et al. (2006) stated that the

number of practices included in bundles of HRM practices varies dramatically across empirical

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doi: 10.1111/1748-8583.12067

HUMAN RESOURCE MANAGEMENT JOURNAL, VOL 25 NO 3, 2015 311

© 2015 John Wiley & Sons Ltd.

Please cite this article in press as: Bello-Pintado, A. (2015) ‘Bundles of HRM practices and performance: empirical evidence from a Latin American

context’. Human Resource Management Journal 25: 3, 311–330.

studies. Jiang et al. (2012b) pointed to the difficulties of operationalising HRM systems

appropriately, which in turn limits the advance in the understanding and knowledge of HRM

systems based on sound measures. They propose the categorisation of practices in bundles

aimed to enhance workers’ abilities (A), motivations (M) and opportunities to participate (O)

– the AMO framework – as a way of clarifying the HRM system construct.

The AMO framework, perhaps one of the most extensive models, contributes to explain and

understand how HRM is operationalised when exploring the relationship between HRM and

performance (Boselie et al., 2005). This framework proposes that specific HRM practices

enhance the skills and knowledge of individual workers, their willingness to exert effort and

their opportunities to express their talents in their work (Boselie, 2010). Several empirical

papers demonstrate the positive association of bundles of practices enhancing abilities,

motivation and opportunities with firms’ outcomes such as higher productivity (MacDuffie,

1995), financial performance (Huselid, 1995; Jiang et al., 2012a) and lower turnover (Batt, 2002).

However, many questions around how HRM drives organisational performance need more

attention (Guest, 2001; Guest and Conway, 2011). One of these concerns the internal

configuration of HRM systems and how interactions among different components (bundles)

potentially explain organisational outcomes (Jiang et al., 2012a). Drawing on the AMO

framework, the aim of this article is to advance the understanding of why and how bundles

of HRM practices interact with each other to explain enhanced manufacturing performance. To

this end, the article uses data from a unique sample of 150 manufacturing plants from Uruguay,

a country located in the southern cone of Latin America.

This article contributes to the current literature of HRM by developing a theoretical

reasoning and offering new empirical evidence to explain how interactions between bundles of

internally aligned HRM practices affect manufacturing performance outcomes in a developing

country context. It is important to note that evidence from this region is totally new and

therefore represents a contribution. Latin American countries are year on year increasing their

participation in the global economy, becoming more active in world trade, at the same time

benefiting from considerable foreign direct investment (FDI) and a growing presence of

subsidiaries of multinational companies (MNCs). However, in Latin America, the study of

management in general, and HRM in particular, has been largely ignored in the academic

management literature (Davila and Elvira, 2005; Vassolo et al., 2012). While this article is not a

cross-country comparison, its empirical evidence can be analysed in line with findings in other

contexts, mainly from developed countries, and would contribute to the open debate about the

universalistic application of HRM systems.

THEORETICAL BACKGROUND AND HYPOTHESES

HRM bundles of practices and manufacturing performance

HRM includes a set of practices with the potential to improve organisational performance

(Wright et al., 2001). They play a major role in building human capital (Boxall and Steeneveld,

1999) and fostering the inimitable and non-substitutable attributes of strategic HR (Huselid,

1995). According to the resource-based view (RBV), HR has the potential to create and sustain

competitive advantages (Barney, 1991). RBV implicitly attributes a system perspective to HRM

practices and maintains that combinations of complementary resources enable a firm to realise

its full potential and help to achieve and sustain a competitive advantage (Kepes and Delery,

2007).

Likewise, the effective fit of HRM practices in ‘bundles’, ‘systems’ or ‘configurations’ has

been the subject of many studies in the specialised HRM literature (see Arthur, 1994; Osterman,

Bundles of HRM practices and performance

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© 2015 John Wiley & Sons Ltd.