One size does not fit all: the relations between service capabilites and human resource management

Previous research in strategic human resource management (HRM) has generally taken two approaches. The best practices perspective conveys a high performance philosophy, while the contingency perspective based on generic market positioning differentiates between high performance and low cost philosophies. This paper is among the first to draw on the capability-based view of strategic management to provide HRM with a more accurate anchor of strategic capabilities. Under the current dynamic environment, the key to sustained competitive advantages depends on the heterogeneous and inimitable capabilities of organizations that are aligned with organizations’ strategic focus. The heterogeneity in turn demands different HRM practices and strategic positions. Using the hospitality industry, I conducted three studies using both quantitative and qualitative approaches to examine the extent to which hotels in different segments aligned their strategic foci, strategic capabilities, strategic positions, and HRM systems and the subsequent impact on financial performance. Results showed that there were different capabilities that predicted financial performance: hotels’ capability to provide tangibles to customers was a threshold capability for all hotels, while the capability to provide service was a distinctive capability only for luxury hotels. In addition, an alignment with the recommended HRM profiles and an emphasis on the strategic positions were helpful for creating the needed strategic capabilities. Implementing efficiency-oriented and reliability-oriented HR and emphasizing back-of-the-house positions were critical to hotels that focused on operational excellence and product leadership, while adopting flexibility-oriented HR and valuing front-of-the-house positions were important for hotels that excelled at customer intimacy. This has implication for future strategic HRM research in that instead of advocating for more best practices, this study suggests that identifying the right practices and strategic positions according to needed capabilities is key.Ph.D.Includes bibliographical references (p. 96-107)by Ying Hon