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The relationship between HRM practices and perceived firm performance was analysed in 3,281 firms located in European Union countries using data derived from the Cranet data set. A factor analysis of 80 different HRM practices resulted in 15 bundles of HRM practices which were then further categorized as being either ‘calculative’, ‘collaborative’ or ‘intermediary’. While controlling for contingency factors, firm strategy, firm size, market conditions and degree of unionization, as well as controlling for industry and country, the resulting analysis indicates that while five of the six calculative practices and two of the three intermediary practices have a significant impact on performance none of the six collaborative practices has. Significantly it was further noted that the overall effect of HRM on performance was relatively modest.
Gooderham et al. (Sat,) studied this question.