Measuring HRM and organisational performance: concepts, issues, and framework

Purpose The purpose of this paper is to contribute to the understanding of the HRM and organisational performance (OP) nexus by drawing attention to the complex interplay of internal and external factors affecting OP, and to further provide an integrated framework for the testing of this nexus. Design/methodology/approach Relevant literature is reviewed and assessed critically. A theoretical framework is provided with the objective to measure the HRM‐OP nexus. Findings Whilst the majority of the extant literature on HRM has focused mainly on internal factors, the authors suggest that the domain of the internal factors considered thus far needs to be widened and external factors need to be acknowledged explicitly. They provide a schematic model portraying the intricate nature of internal and external factors. They subsequently provide an integrated framework of factors in order to measure HRM practices' effects on OP. Research limitations/implications The suggested framework is theoretical pending empirical testing. The framework can serve as a template for future research. Practical implications The framework can be put into a universally testable template for use by researchers. Originality/value The paper, for the first time, schematically brings together and discusses the elements affecting the HRM‐OP nexus, and further provides a framework in the form of a set of exhaustive factors – which will facilitate this nexus being put to empirical test.