August 11, 2025Human Resource ManagementOpen Access

Pay and Train to Sustain: A Dynamic Human Capital Resources View of the Relationship Between HRM Practices and Organizational Performance Over Time

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Longitudinal analysis shows HRM practices improve organizational performance in low human capital firms, implying strategic HRM investments matter.

Increases in human resource management practices enhance organizational performance, particularly in firms with low initial capital resources.
Findings indicate that skill-enhancing and motivation-enhancing HRM practices significantly reduce staff turnover, thus boosting performance.
The study employs a unique high-frequency panel dataset from the English adult social care sector to address biases in prior research.
This dynamic view of human capital resources highlights the long-term impact of HRM investments on performance outcomes.

Georgiadis et al. (2025) studied this question.

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Longitudinal analysis shows HRM practices improve organizational performance in low human capital firms, implying strategic HRM investments matter.