The Relationship Between HR Capabilities and Quality of Patient Care: The Mediating Role of Proactive Work Behaviors

• Author: Naresh Khatri,Arup Varma,Vishal Gupta
• DOI: http://doi.org/10.1002/hrm.21794
• Date: 01 July 2017
• Published date: 01 July 2017

Human Resource Management, July–August 2017, Vol. 56, No. 4. Pp. 673–691

© 2016 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI:10.1002/hrm.21794

Correspondence to: Arup Varma, Loyola University Chicago, Quinlan School of Business, 820 N. Michigan Ave.,

Chicago, IL 60611, Phone: 312-915-6664, E-mail: avarma@luc.edu.

than bench science, research on the genome,

stem-cell research, and everything else we hear

about on the news.” Unfortunately, organiza-

tional and management issues in health care have

generally taken a back seat because of a clinician-

centric care model (Khatri et al., 2006; McBride

& Mustchin, 2013). In particular, the vital role of

human resource management (HRM) in a highly

service-intensive health care context continues to

be overlooked (Khatri, Pasupathy, & Hicks, 2012;

Townsend & Wilkinson, 2010).

Health care systems across the globe are

facing critical organizational and man-

agement challenges. To navigate these

challenges successfully, health care orga-

nizations need to pay greater attention

to organizational and management issues than in

the past (Gawande, 2005; Institute of Medicine

Report, 2012; Khatri, Baveja, Boren, & Mammo,

2006; Ramanujam & Rousseau, 2006). For exam-

ple, Gawande (2005, p. 3) noted: “Research on

our health care system can save more lives …

THE RELATIONSHIP BETWEEN HR

CAPABILITIES AND QUALITY OF

PATIENT CARE: THE MEDIATING

ROLE OF PROACTIVE WORK

BEHAVIORS

NARESH KHATRI, VISHAL GUPTA, AND ARUP VARMA

Based on theoretical frameworks of resource-based theory, dynamic capabilities,

and behavioral perspective on human resource management, we developed a

multidimensional construct of human resource (HR) capabilities and tested its

relationship with quality of patient care using a national sample of U.S. hospi-

tals. The data on HR capabilities were collected from senior managers (421 indi-

viduals nested in 279 hospitals) representing both the administrative and clinical

sides of the hospitals. The data on quality of patient care were gathered from two

unique sources—patients of 207 hospitals who reported the data via the hospital

Consumer Assessment of Healthcare Providers and Systems Survey, and 421

senior managers of 279 hospitals. Our analyses using structural equation mod-

eling suggests that the positive relationship of HR capabilities with quality of

patient care is mediated by proactive behaviors of health care workers. Implica-

tions of the study fi ndings for research and practice are discussed. ©2016 Wiley

Periodicals, Inc.

Keywords: dynamic capabilities, HR capabilities, quality of patient care,

resource-based theory

674 HUMAN RESOURCE MANAGEMENT, JULY–AUGUST 2017

Human Resource Management DOI: 10.1002/hrm

research agendas in social sciences, suggests that,

in a changing context, firms need to possess capa-

bilities to continuously renew and reconfigure

resources to stay relevant (Barreto, 2010; Becerra,

2008; Helfat etal., 2007; Teece, 2007). The HRM

field now seems ripe for exploring sustainable

competitive advantage arising from building orga-

nizational capabilities in HR (Khatri, 2006; Park,

Gardner, & Wright, 2004).

Theoretical Background and Hypotheses

Development

The present study is premised on the related

theoretical frameworks of resource-based theory,

dynamic capabilities, and the behavioral perspec-

tive on human resource management. Resource-

based theory has evolved from a nascent, upstart

perspective to one of the most prominent and

powerful theories of understanding organizations

(Barney etal., 2011). It has helped build a pro-

ductive theoretical bridge between HR literature

and the field of strategy (Colbert, 2004; Wright,

Dunford, & Snell, 2001).

Teece, Pisano, and Shuen (1997) introduced

the concept of dynamic capabilities and explained

competitive advantage arising from the confluence

of assets, processes, and evolutionary path. The

dynamic capabilities framework is useful in making

resource-based theory operational by identifying

specific organizational mechanisms and processes

that enable a firm to acquire, develop, deploy,

combine, and reconfigure its resources to achieve

sustainable competitive advantage (Barreto, 2010;

Wang & Ahmed, 2007). This is because the internal

logic of resource-based theory is somewhat para-

doxical: The strategic value of the firm resources

lies in their inherent complexity, and attempts to

causally unravel those complexities are counter-

productive. Thus, intermediate constructs, such as

dynamic capabilities, are needed to preserve the

strategic value of resource-based theory without

compromising its essence (Barreto, 2010; Colbert,

2004). The dynamic capability framework offers

an advantage in that it directs firms to combine,

develop, and deploy resources more effectively to

gain competitive advantage; simply owning more

of superior resources is not sufficient (Barreto,

2010). Dutta, Narasihman, and Rajiv (2004), in

their study of research and development capabili-

ties across firms in the semiconductor industry,

concluded that what makes capabilities so valu-

able is that they are “sticky,” a view corroborated

by Teece (2007), who observed that dynamic capa-

bilities are difficult to develop and deploy.

Barreto (2010), in his review of the litera-

ture on dynamic capabilities, concluded that the

research on dynamic capabilities has generated a

Health care policies around the globe under-

line the centrality of people and cultural issues

in delivering efficient and safe patient care (see

Baluch, Salge, & Piening, 2013; Buchan, 2004;

Dussault & Dubois, 2003; Institute of Medicine

Report, 1999, 2012; Kabene, Orchard, Howard,

Soriano, & Leduc, 2006; Khatri, Wells, McKune,

& Brewer, 2006; McBride & Mustchin, 2013;

Townsend, Lawrence, & Wilkinson, 2013).

Unfortunately, the prescriptions to resolve people

and cultural issues are not commensurate with

the diagnosis of the problem in that the proposed

solutions emphasize technological fixes even to

problems that are inherently people related and

cultural (Bartram & Dowling, 2013; Buchan,

2004; Khatri et al., 2006; Khatri, Brown, & Hicks,

2009; Ramanujam & Rousseau, 2006; Townsend &

Wilkinson, 2010). A predictable result is that peo-

ple and cultural issues remain unaddressed with

major adverse consequences such as low morale

of health care workers and poor quality of patient

care (Bartram & Dowling, 2013; Khatri etal., 2009;

McBride & Mustchin, 2013). Indeed, there seems

to be a glaring discordance between the attention

given to issues of financing and structural trans-

formation and the low attention given to HRM

issues, despite the fact that people-related issues

lie at the core of these other proposed initiatives

(Buchan, 2004; Dussault & Dubois, 2003; Khatri

etal., 2006; Townsend & Wilkinson, 2010).

In this study, we contribute to existing HRM

research in two ways. First, we respond to calls of

HRM scholars for identifying mediating mecha-

nisms through which HRM may influence orga-

nizational outcomes that range from proximal

(e.g., HR outcomes) to more distal (e.g., quality

of products or services, or financial performance)

(Guest, 2011; Jiang, Lepak, Hu, & Baer, 2012).

Indeed, investigating the “black box” of the HRM-

performance relationship seems to be the next

frontier in HRM research. Accordingly, we exam-

ine the mediating role of proactive work behaviors

in the relationship between HR capabilities and

quality of patient care in a national sample of U.S.

hospitals.

Second, we contend that the theory of

dynamic capabilities can be effectively extended

to HRM. The last two decades have seen a tremen-

dous amount of research in HRM with one of the

major themes being the relationship between HR

practices and organizational outcomes, and also

the emphasis on addressing the unanswered core

questions about the relationship between HRM

and performance (Barney, Ketchen, & Wright,

2011; Guest, 2011; Huselid, 2011). The theory

of dynamic capabilities, which has been hailed

as encapsulating one of the most ambitious