HRM and firm performance::an investigation of Turkish mid-size IT firms

Abstract

This research aims to explore and highlight the nature and type of human resource management (HRM) practices exist, and explain how they contribute towards firm performance in medium-sized information and communication technology (IT) businesses in Turkey. To achieve this, a mixed methods approach was adopted involving two phases of data collection. In Phase 1, data were collected from 55 participants at 14 firms, which highlighted the nature of HRM practices prevalent at the research firms and explored the linkages between HRM and firm performance and employee performance. Furthermore, during this Phase, an integrated multi-level model of HRM and performance was developed. This model presents relationships between HRM, organisational citizenship behaviour (OCB) and intellectual capital of the firm at employee level. Moreover, it also presents linkages between HRM practices, corporate entrepreneurship (CE), intellectual capital and financial performance at the firm level. Phase 2 of the study adopted a survey method to test the model developed in Phase 1. For this, data were collected from 310 employees and managers at 21medium-sized IT firms in Turkey. Overall, the findings suggest that medium-sized IT firms are becoming more innovative and proactive via enhancing the effectiveness of HRM. HRM practices also help employees by improving their creative and organisational behaviours. The study also indicate that HRM practices play a mediator role between HRM and corporate entrepreneurship. This study contributes to the growing body of literature on HRM in Turkey in general and the role of HRM in supporting mid-sized IT firms in Turkey in particular, by employing a mixed method approach involving both qualitative and quantitative studies. It also contributes to the debate on the resource-based view of the firm (RBV), and social exchange theory (SET) by examining the relationship between HRM and firm performance at both the organisational and individual levels. Based on the perspectives of RBV and SET, the influence of HRM practices is expected to positively affect the levels of employee creativity (human capital - knowledge, skills and abilities) and organisational collaboration (social capital - interaction, helping behaviours and relational connections) within the research firms. A firm’s human resources are an essential element in developing entrepreneurial behaviours that lead to a sustained competitive advantage, which eventually leads firms to have better performance.