لخّصلي

Strategic human resource management
(SHRM) research focuses on
the contribution that HR practices
can make to organizational performance
and competitive advantage
(Collins & Clark, 2003). Within this research
context, the role of HR management as a strategic
partner with influence in organizational
and HR strategic decision making has growing
importance (Barney & Wright, 1997).
Globalization of business and the associated
intensification in competitive pressures has
led to an increasingly strategic role for HR
professionals, directed toward aligning
HR practices with business strategy (Raub,
Alvarez, & Khanna, 2006). The strategic role
of HR professionals focuses on
strengthening the organizational
value of the HRM system and its
contribution toward achieving organization
strategic goals (Pfeffer,
1994; Ulrich, 1997). Among HR
roles, many authors argue that the
“strategic role” is a pivotal one for
HR professionals in today’s organization
(Cleland, Pajo, & Toulson,
2000).
Despite the priority placed
on HR professionals as strategic
partners, recent reviews suggest
that there has been little effort to
evaluate the strategic contribution
of the HR role (Cabrera & Cabrera,
2003). This is a significant research
gap, particularly as studies show
that firms remain primarily concerned
with efficiency of human
resources (Becker & Gerhart,
1996). The current study responds
to this gap by investigating the
impact of a strategic role for HR
management in organizational
financial performance.
Given the importance of
consistency between what a role
purports to achieve and its actual impact, a
strategic role for HR professionals should focus
on the achievement of organizational goals
by aligning HR practices with business objectives
(Conner & Ulrich, 1996). This alignment
necessitates the design and implementation
of HR policies and practices that enhance
productivity and develop human resource–
related organizational capabilities (Ulrich,
1997; Ulrich & Lake, 1990). Substantial work
has occurred in SHRM, which suggests that
the adoption of high-performance human
resource practices (HPHRPs) promotes better
organizational performance (Becker &
Gerhart, 1996; Huselid, 1995). However, the
relationship between a strategic role for HR
professionals and the effective implementation
of HPHRPs remains unexplored (H. T.
Chang & Chi, 2007). While previous research
indicates that the strategic role held by HR
professionals is a critical aspect of HRM policy
enactment (Hailey, Farndale, & Truss, 2005),
few studies have investigated, or established,
the link between the literature on HPHRPs
and HR professionals’ strategic role.
In recognition of this research need, the
current study investigates the “black box”
between the HR strategic role and financial
performance by exploring the mediating role
of HPHRPs, defined as a system of interrelated
human resource managerial practices that,
taken together, influence employee’s ability,
motivation, and opportunity by creating
conditions of high involvement and participation
in them in order to increase organizational
effectiveness (Huselid, 1995). HPHRPs
reflect a combination of HR practices that
aim to improve organizational performance
(Boselie, Dietz, & Boon, 2005). Building on
recent work by Applebaum, Bailey, Berg,
and Kalleberg (2000), this study employs the
Ability-Motivation-Opportunity taxonomy
of performance to categorize the components
of HPHRPs. Consistent with previous definitions,
the term HPHRPs is used to refer to a set
of HR practices that are intended to enhance
employees’ skills, motivation, and opportunity
to participate, and which, in turn, seek
to improve organization performance.
A strategic role for HR management is
argued to enhance the effective utilization
of HPHRPs, which, in turn, increases financial
performance through increased human
resource productivity. In addition to exploring
this indirect relationship, this study also
explores the moderating role of devolvement
of responsibility for HR practices to line
THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 901
Human Resource Management DOI: 10.1002/hrm
Line management
devolvement is
argued to increase
the operational
integration of
HR practices
and facilitate a
strategic focus for
HR professionals
by reducing their
responsibility for
traditional HR
practice execution
and administration.
management in the relationship between the
HR strategic role and HPHRPs. Line management
devolvement is argued to increase the
operational integration of HR practices and
facilitate a strategic focus for HR professionals
by reducing their responsibility for traditional
HR practice execution and administration.
This study contributes to current research
in a number of areas. First, we respond to calls
to investigate the impact of the HR strategic
role, and pathways through which this effect
occurs. Previous research in SHRM has been
criticized for its lack of theoretical and empirical
work on the mediating, explanatory
pathways through which HR strategic factors
lead to firm outcomes (Becker & Gerhart,
1996; Delery, 1998; Dyer & Reeves, 1995).
This study builds on prior research exploring
the impact of HR strategic role and is one of
the first to focus on HPHRPs as a mediating
pathway explaining this effect. Moreover,
this is one of very few studies to do so in a
non-Western context (Bae & Lawler, 2000),
providing greater understanding of the utility
of the HR strategic role in promoting financial
performance in non-Western contexts,
especially developing countries. The empirical
data reported in this article comes from
Jordan, a developing country in the Middle
East.
A further contribution stems from the
investigation of line management devolvement
as a moderating variable, enabling
researchers, HR professionals, and managers
to understand the situations under which a
strategic role for HR professionals is more or
less likely to generate positive organizational
performance effects (H. T. Chang & Chi,
2007). By exploring a moderated mediating
relationship, this study clarifies a key mechanism
that explains the influence of HR strategic
role, as well as identifying circumstances
that affect the operation of this mechanism.
Theoretical Background and
Hypotheses
The following sections submit the rationale
underlying the proposed relationships and
discuss how HR strategic role is linked to
HPHRPs, which, in turn, is linked to financial
performance. The subsequent discussion argues
the moderating role of line management
devolvement in this relationship and a moderated
mediated pathway between the HR
strategic role and organization financial
performance.
HR Strategic Role, HPHRPs, and
Financial Performance
Dessler, Griffiths, and Lloyd-Walker (2007)
argue that, ideally, the strategic partner role
incorporates HR as a full participant in both
the development and operationalization of
organizational strategies. This role requires
HR managers to support strategic HRM initiatives
by aligning HR goals, strategies,
and practices with corporate
objectives and the implementation
of business strategy
(Andersen, Cooper, & Zhu, 2007).
It also requires the participation of
HR managers in the strategic business
planning process (Sheehan,
2005), which means that HR managers
have an active role in both
strategy formulation as well as
strategy implementation (DeCieri
et al., 2008).
A critical function for HR managers
in a strategic planning role is
to build the organization’s human
resources as a source of sustained
competitive advantage (Barney &
Wright, 1997; Becker & Gerhart,
1996). This implies the incorporation
of HR practices that contribute
to organizational performance
into the strategic decision-making
process (Huselid, 1995). In
their meta-review, Delery and
Doty (1996) identified seven such
practices, which are consistently
depicted as HPHRPs. These practices are theoretically
and empirically connected to organizational
performance and include practices
related to ability, such as training systems;
factors related to motivation, including
results-oriented appraisal; and factors related
to opportunity, such as employee participation
programs.
902 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013
Human Resource Management DOI: 10.1002/hrm
A critical function
for HR managers in
a strategic planning
role is to build
the organization’s
human resources
as a source
of sustained
competitive
advantage.
A pivotal determinant of the adoption of
HPHRPs is a perception of HRM in a strategic
role as a legitimate mechanism to enhance
organizational performance. Those HR professionals
possessing a legitimate strategic
role through their hierarchical position
within an organization are likely to have
the authority, opportunity, and resources
to search for and adopt innovative HPHRPs
(Gooderham, Nordhaug, & Ringdal, 1999;
Jennings, 1994). Equally important, as an HR
professional, is expertise in HPHRPs, which
leads to the perception of “individual competence”
(Walton, Allen, & Gaffney, 1987).
This, in turn, can enhance the ability to provide
valuable information to, and influence,
other strategic decision makers
(Kane, 1994). A legitimate HR
strategic role, therefore, builds the
credibility of HR-related initiatives
(Bennett, Ketchen, & Schultz,
1998; Galang, Elsik, & Russ, 1999).
Once legitimacy of the HR manager
as a strategic partner is established,
research indicates that
this will enhance influence over
resource allocation and decisionmaking
authority. Possible benefits
include a greater allocation
of resources and increased authority,
both of which provide greater
opportunities to drive the adoption
of HPHRPs (Coopey, Keegan,
& Emler, 1998; Galang et al., 1999;
Kanter, 1988). This is supported
by previous studies that have
highlighted the key role played by
senior management in the identification of
HR initiatives and priorities, and its resourcing
and support (Beer, 1997; Kane, 1994).
Similar support for the relationship
between the HR strategic role and HPHRP
implementation is provided in research into
innovation adoption and the role of innovation
champions. Previous research provides
evidence of the importance of champions in
the successful adoption of new HR practices
(Frost & Egri, 1991; Kanter, 1983). The HR
professional in a strategic role operates as a
champion, motivated to explore new policies
and practices to build HR-related capabilities,
which is likely to result in a greater rate of
adoption of new HPHRPs (Howell & Higgins,
1990). The HR strategic practitioner is often
depicted as an organizational change agent—
a professional who is willing and sufficiently
skilled to identify HR-related initiatives that
will enhance organizational performance,
and enable and oversee their implementation
(Beatty & Schneier, 1997; Russ, Galang,
& Ferris, 1998). Therefore, while underresearched,
the connection between the HR
professional in a strategic role as a critical element
impacting the adoption of HPHRPs has
considerable merit.
Following this, we will hypothesize a positive
relationship between the HR strategic
role and HPHRPs:
Hypothesis 1: The HR strategic role is positively
related to HPHRPs.
Strategic human resource management
has been most concerned with the impact of
HR strategies on organizational performance
(Boxall & Macky, 2007). The resource-based
view (RBV) of the firm provides justification
of the importance of human resources and
effective human resource management as a
source of sustainable competitive advantage
(Barney & Wright, 1997; Wright, Dunford, &
Snell, 2001). In particular, the RBV emphasizes
the role of HR practices in influencing
the human capital within organizations in a
way that may lead to organizational success.
Building upon the RBV, the nature of the
relationship between HPHRPs and organizational
performance has become the focus of
the entire SHRM field (Boselie et al., 2005).
Within this context, there is significant evidence
for the link between HPHRPs and organizational
financial performance.
There is significant evidence that the range
of practices comprising HPHRPs enhance productivity
and, consequently, organizational
financial performance. Ability-enhancing
HR practices of staffing and training directly
influence employees’ ability to perform by
affecting their knowledge, skills, and abilities
at work (Katou & Budhwar, 2010). Selective
staffing techniques are used to identify applicants
whose abilities are compatible with the
THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 903
Human Resource Management DOI: 10.1002/hrm
needs of the organization (Huselid, 1995),
and the provision of comprehensive training
can lead skilled employees with capabilities
that are honed to the particular requirements
of developing organizational technologies
(Arthur, 1994). Similarly, motivation-enhancing
HR practices have been linked to employee
productivity and incorporated into previous
models of HPHRPs. For example, Batt (2002)
suggested motivational dimensions of a highinvolvement
HR system, which include high
relative pay and commitment to job security,
and Guest (1997) generates evidence to support
the link between performance-related
pay and enhanced employee motivation.
Other motivation-enhancing practices mentioned
in the strategic HRM literature include
formal performance appraisal, skill-based
pay, and group-based pay, which have all
been linked to organizational performance
(Guthrie, 2001; Huselid, 1995). The final
component of HPHRPs, opportunity-enhancing
practices (Huselid, 1995), has also been
positively linked to organizational outcomes.
The performance of highly skilled and motivated
employees will be limited if jobs are not
structured properly (Tsai, 2006). In particular,
employees perform better at work when they
are offered a working environment that provides
the necessary support and the opportunity
to contribute (Boxall & Purcell, 2003).
Substantial research on the link between
HPHRPs and organizational performance has
occurred worldwide since pioneering work
was published in the mid-1990s (Becker &
Gerhart, 1996; Huselid, 1995). In general,
empirical research on the HPHRPs and performance
link has demonstrated that HR
practices are related to a set of organizational
performance measures (Wright & Kehoe,
2008), and this has provided a basis for many
authors to promote the practical benefits
that can be gained from adopting HPHRPs
compared with the more control-based personnel
approach (Tsai, 2006). In particular,
many empirical studies have shown positive
HPHRPs influence on a range of indicators
of organizational performance, including
financial performance (Huselid, 1995), emplo y -
ee productivity (Guthrie, 2001), turnover
rate (Arthur, 1994; Vandeberg, Richardson,
& Eastman, 1999), and absence rate (Marks,
Mirvis, Hackett, & Grady, 1986; Wood & De
Menezes, 1998).
The previous discussion indicates that
a positive relationship is likely to exist
between HPHRPs and financial performance.
Accordingly, it is hypothesized that:
Hypothesis 2: HPHRPs are positively related to organizational
fi nancial performance.
We have argued that the HR strategic role
is linked to HPHRPs, which in turn are linked
to performance. Based on these arguments,
we reason that HPHRPs play a mediating role
in the relationship between the HR strategic
role and financial performance because HR
professionals’ holding a more strategic role
creates conditions conducive to the adoption
of HPHRPs within organizations. Such adoption
of high-performance practices leads, in
turn, to enhanced financial performance.
Thus, we hypothesize the following:
Hypothesis 3: HPHRPs mediate the relationship
between the HR strategic role and organizational
fi nancial performance.
Although a direct relationship between
the HR strategic role and HPHRPs is hypothesized,
a review of the literature on SHRM
indicates that there are factors capable of
moderating the HR strategic role–HPHRP
relationship. An examination of moderating
factors is especially important for a comprehensive
understanding of this relationship
and the conditions under which it applies
(Wright & Haggerty, 2005). One oftenmentioned
impediment to achieving success
in a strategic role is the oppressive burden of
administrative transactional tasks (Ulrich &
Brockbank, 2005). Informed by these studies,
devolvement of responsibility for HR practice
execution and administration to line management
is argued as a key factor influencing the
impact of the HR strategic role on HPHRPs.
The devolvement of HR practices, which
has been referred to as “downward integration”
of HRM (Zhu, Cooper, De Cieri,
Thomson, & Zhao, 2008), is defined as the
involvement of line managers, commonly
904 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013
Human Resource Management DOI: 10.1002/hrm
The devolvement
of more traditional
HRM activities
to line managers
allows HR
professionals
to adopt a more
strategic role
because it releases
them from the more
traditional and
time-consuming
operational
activities.
referred to as supervisors, in the execution
and administration of HR practices (Budhwar,
2000a, 2000b), including selection, training,
and performance management. While some
authors, like Thornhill and Saunders (1998),
state that the increased role of line managers
in the management of human resources is a
vital characteristic of any HRM model; others,
like Brewster and Larsen (2000), go further by
arguing that the devolution of HR responsibilities
to line managers is seen as a defining
issue in HRM since line managers’ actions
and behaviors are largely responsible for the
difference between intended and actual HRM
implementation.
Arguments for the moderating role of line
management devolvement are
based on the assumption that, if
HR professionals are going to hold
a more strategic role, the dayto-
day HR activities need to be
decentralized and shifted to line
managers (Kulik & Bainbridge,
2006). The devolvement of more
traditional HRM activities to line
managers allows HR professionals
to adopt a more strategic role
because it releases them from
the more traditional and timeconsuming
operational activities
(Conner & Ulrich, 1996; Ulrich,
1997). In addition, numerous
studies suggest the role of line
managers is important in ensuring
effective implementation of HRM
strategy and policies (Bhatnagar
& Sharma, 2005). In particular,
the adoption of more commitment-
oriented HPHRPs requires
line managers to be involved in
the initiation and implementation
of “high-performance” models,
especially when the actions
of line managers are the difference between
intended and actual HR practices (Boxall &
Purcell, 2008). Line management involvement
in HPHRP execution and administration
ensures consistent application through
integration with operational decision making
and planning, as well as day-to-day administrative
activities (Renwick, 2003).
The significance of an increased HR role
for line managers has been recognized by a
number of researchers. Currie and Procter
(2001) show that line managers hold important
roles in the realization of HR strategy.
Other research has connected the devolution
of HRM to line managers to financial
performance. For example, Perry and Kulik’s
(2008) study showed a positive effect of devolution
on perceived people management
effectiveness.
Previously, we have argued that the
HR strategic role enhances the adoption of
HPHRPs, which, in turn, enhances performance.
Following this discussion, we also
argue that devolvement of HR practices to
line managers moderates this relationship:
Hypothesis 4: Devolvement moderates the relationship
between the HR strategic role and
HPHRPs.
We have argued that the HR strategic role
is linked to organizational financial performance
through HPHRPs and that devolvement
moderates the relationship between
HPHRPs and performance. Together this provides
a rationale for a hypothesis of moderated
mediation:
Hypothesis 5: Line management devolvement will
moderate the relationship between the HR strategic
role and fi nancial performance, such that
the positive relationship between the HR strategic
role and performance through HPHRPs will be
stronger at higher levels of line management devolvement
than at lower levels of line management
devolvement.
Methods
Sample and Data Collection
Data were collected through a self-administered
survey in the Jordanian private sector in
the period from March to June 2009. The
sample was drawn from the Jordanian
Company Control Department database. The
sample included companies from both the financial
and manufacturing sectors. In total,
176 participants were recruited in these
THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 905
Human Resource Management DOI: 10.1002/hrm
sectors. Only companies employing more
than 100 employees were included in this
study. The decision to exclude organizations
employing fewer than 100 employees was
based on results of previous research in HRM,
which indicates that the larger the firm, the
more likely it is to have a formal organizational
unit dealing with human resources as
well as more formalized HR practices (Guthrie,
2001; Huang, 2000).
The questionnaires were completed by
the most senior manager responsible for the
HR functions within the company. Of the 176
questionnaires distributed, 121 questionnaires
were returned. In total, 118 completed
and usable questionnaires were used in the
analysis, with a 66 percent response rate.
Responding companies represented
financial (41.5 percent) and manufacturing
(58.5 percent) sectors. Of the organizations
that responded, the majority (74.5 percent)
employed between 100 and 300 employees.
More than 81 percent of the organizations
had been in operation for more than five
years, and most of the organizations (88 percent)
were locally owned. The majority of
respondents were male (82 percent) and had
less than 10 years of experience (92 percent)
in their current organization.
Based on previous literature (Gardner &
Wright, 2009), studies that collect data from
a single respondent using the same method
may be subject to potential common meth -
od bias. To reduce the potential for common
method variance (CMV), a set of steps were
undertaken. In common with much previous
research (Guthrie, 2001), we chose to
ask the most senior person responsible for
human resource management to complete
the survey on the basis of required expertise.
Past research suggests that the most senior
HR manager is well placed to provide expert
judgment on HR-related policy and practices
(Guthrie, 2001; Way, Lepak, Fay, & Thacker,
2010). This is particularly true in our study,
which required knowledge of the HR strategic
management policy and also required understanding
across a wide range of HR-related
management practices.
As an additional strategy to reduce the
risk of CMV bias, we asked respondents to
nominate the source of information about
financial performance and we also nominated
measures that were less open to subjective
interpretation: return on equity,
return on assets, sales growth, and market
share. Previous research suggests that using
more objective and concrete measures is less
likely to be associated with bias (Podsakoff &
Organ, 1986). In doing so, we aimed to balance
emphasis on objective measurement and
expert judgment in order to be comprehensive
in our measurement of practices while
minimizing the risks that personal judgment
would reduce the reliability of our measurements
(Guest, 2001). This is supported by
research in strategic human resource management,
which argues that factual information,
of which the respondent holds accurate
knowledge and which is potentially objectively
verifiable, does not pose serious problems
(Guthrie, 2001). The primary dependent
variables (financial performance) in this study
reflect this type of measure.
Finally, we followed empirical recommendations
for the use of a CMV marker (Lindell
& Whitney, 2001; Richardson, Simmering,
& Sturman, 2009). The marker variable was
included in the middle of the survey. It was
chosen as the CMV marker because it did not
have a strong theoretical connection to the
predictor variables but was within the scope
of organizational management. The marker
variable chosen for analysis was low-cost
strategy. A measurement scale developed by
Huang (2001) was used in this study for measuring
business strategy of innovation and
cost leadership.
Measures
The questions used in the survey were drawn
from previously validated measures. The
double-back-translation method was used,
whereby the questionnaire was developed in
English language and then translated into
Arabic by a certified translator, and then
back-translated into English. The questionnaire
was then evaluated by a number of independent
researchers in human resource
management in order to ensure content
validity.
906 HUMAN RESOURCE MANAGEMENT, NOVEMBER–DECEMBER 2013
Human Resource Management DOI: 10.1002/hrm
Dependent Variable: Financial Performance
This study adopted quasi-perceptual measures
of performance, which evaluate performance
in objective terms (e.g., return on equity, sales
growth, and profitability) through the subjective
perception of managers (Ketkar & Sett,
2009). Perception-based measures of performance
are widely used in the literature (e.g.,
Macky & Boxall, 2008; Shih, Chiang, & Hsu,
2006). Measures of financial performance
were taken by asking respondents to compare
their company’s performance with that of
similar companies operating in the same sector
over the past one to three years. Responses
were taken on a seven-point Likert scale ranging
from 1 (0 percent) to 7 (100 percent).
Predictor Variable: HR Strategic Role
HR strategic roles were measured using a scale
derived by Conner and Ulrich (1996), frequently
used in similar research on HR managerial
roles (Raub et al., 2006; Voermans &
Veldhoven, 2007).
Respondents were asked to refer to their
role as HR manager on six items that reflect
the HR strategic role. Respondents were asked
to indicate whether they agree or disagree
with each of these items on a Likert-type
scale ranging from 1 (strongly disagree) to 7
(strongly agree). One item was reversed and
modified (“HR manager is seen as strategic
partner” became “HR manager is not seen as
strategic partner”). Negatively worded questions
are recommended in order to reduce
pattern response bias (Hinkin, 1995).
Mediating Variable: HPHRPs
Based on extensive review of the literature,
scales were developed for measuring the three
HPHRP dimensions: ability-enhancing, motivation-
enhancing, and opportunity-enhancing
practices. All items measuring HPHRPs
were adopted from survey items used by
Flood et al. (2008), Huselid (1995), and Snell
and Dean (1992). All items were measured
using a seven-point scale.
Nine items were used to measure ability-
enhancing practices, including staffing
(i.e., formal job analysis, recruitment, and
selection) and training and development practices
(e.g., “How much importance is placed
on the staffing process in this company?”)
Six questions relating to motivation-enhancing
practices were designed to measure both
performance management and compensation
practices. Three scale items were used to
measure performance management practices
(e.g., “What proportion of employees receive
formal performance appraisals and feedback
each 12 months?”). These items were adopted
from Flood et al. (2008) and Huselid (1995).
Three items were used to measure compensation
practices, taken from Flood et al. (2008)
and Snell and Dean (1992), including, for
example, “How would you rate pay level in
this company relative to other companies?”
Finally, opportunity-enhancing practices
reflect communication and participation
practices. Six items were used to measure
the opportunity-enhancing practices dimension,
taken from previous work by Flood et al.
(2008) (e.g., “What proportion of employees
are routinely administered attitude surveys to
investigate employee morale?”).
Moderator Variable: Devolvement
Based on Budhwar’s (2000a) study, devolvement
was measured on the basis of three sets
of items: the primary responsibility with line
managers for HRM, change of responsibility
of line managers for HRM, and the increased
training of line managers in HRM. The approach
used by Budhwar is consistent with
the approaches used by a number of authors
(Brewster & Larsen, 1992; Gautam & Davis,
2007; Larsen & Brewster, 2003; Perry & Kulik,
2008; Zhu et al., 2008). The level of devolved
decision making in areas of HPHRPs was measured
by asking respondents to indicate the
extent of line managers’ involvement in HR
decisions regarding the following HPHRPs:
recruitment and selection, training and development,
performance management, compensation,
incentives, communication, and
participatory practices. In addition, respondents
were also asked the extent of an increase
of line managers’ responsibility with regard
to the same set of HR practices mentioned
THE EFFECT OF STRATEGIC HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE 907
Human Resource Management DOI: 10.1002/hrm
earlier over the last five years. Finally, respondents
were asked to estimate the extent of
line managers’ formal training to perform a
set of HR-related skills.
Control Variable
Consistent with previous studies on performance
effect of HPHRPs (Arthur, 1994;
Huselid, 1995), a number of organizational
variables were included as potential control
variables: company size, company age, company
ownership, and the sector within which
the company operated. Company size was
measured in terms of the number of working
employees. The control variable for company
age was in the form of the number of years
the company has been in operation in Jordan.
Company ownership reflects whether the
company is foreign or locally owned.
Analysis and Results
Means, standard deviations, alpha values,
and correlations for all variables appear in
Table I. All of the index reliabilities, as measured
by Cronbach’s alpha, exceeded the cutoff
point of .70 (Hair, Anderson, Tatham, &
Black, 1998).
Partial least squares (PLS) structural equation
modeling (SEM) was employed to analyze
the data. Partial least squares is increasingly
used as an analytical technique, particularly
in health and organizational studies research
(Sosik, Kahai, & Piovoso, 2009). A number of
recent reviews of PLS structural equation modeling
have generated evidence supporting its
advantages over covariance-based modeling.
In particular, PLS SEM can be used to analyze
data from small samples, which is a factor pertinent
to the current study (Sosik et al., 2009).
Results of a Monte Carlo simulation indicate
that PLS SEM was able to produce estimates
for a six-variable model with low Type-I error
probability and satisfactory power, based on
a sample size of 17 (Majchrzak, Beath, Lim,
& Chin, 2005). In addition, PLS is capable of
producing more accurate coefficients when
there is correlation between independent
variables (Sosik et al., 2009). PLS SEM provides
information relating to measurement
and structural model components.
PLS SEM generates factor loadings for
each scale item, which can be used to assess
the measurement model. A matrix of factor
coefficients is provided in Table II. The matrix
shows that all coefficients are greater than .6,
except the sixth item for HR strategic role
T A B L E I Means, Standard Deviations, and Correlations for Study Variables
Variables Mean SD Alpha 1 2 3 4 5 6 7

1. Financial
   performance
   3.98 .96 .78


2. HR strategic
   role
   4.41 .81 .82 .449**


3. HPHR 4.28 .82 .88 .660** .692**


4. Devolvement 4.44 .76 .92 .573** .686** .828**


5. Number of
   employees
   2.35 .65 .547** .251** .396** .344**


6. Company size 3.21 .77 .385** −.002 .248** .083 .589**


7. Company
   ownership
   2.15 .50 .005 .099 .103 .078 −.007 −.107


8. Company