A multi-level examination of quality-focused human resource practices and firm performance: evidence from the US healthcare industry

Abstract

In today's business world, the role of quality has become ever more significant for organizations to compete in a global marketplace. Based on the quality management theory, this study empirically examines the relationship between quality-focused human resource practices (QHRP) and organizational performance outcomes. Data from 69 healthcare organizations indicate a strong support for this relationship. A Human Resource (HR) system focused on quality management was directly related to multiple dimensions of organizational performance outcomes (i.e., intangible – employee satisfaction and customer satisfaction – and tangible – profit). Specifically, two measures of QHRP, knowledge management and strategic management, were found to be positively related to the financial performance of firms implementing quality management. Process management is found to be negatively related to employee satisfaction. General Human Resources were positively related to both employee and customer satisfaction. Employee focus of the firms is also positively related to employee satisfaction. In addition, employee satisfaction is also related to both customer satisfaction and financial performance while customer satisfaction is found to be positively related to employee satisfaction. The findings indicate a generally strong positive relationship with the organizational performance outcomes. The results of this study are particularly important in showing HR's contribution to the organization's bottom line.

Keywords:

• knowledge management
• leadership
• performance
• process management
• quality management
• strategic management

Acknowledgements

An earlier version of this research was named 2005 American Society for Training & Development Dissertation of the Year Award.

Prior versions of this research have been presented at: the 2006 American Society for Training & Development (ASTD) International Conference & Exposition, Dallas, Texas; the 21st Annual (2006) Society for Industrial and Organizational Psychology (APA Div. 14) Conference, Dallas, Texas; and the 2007 Human Resource Management Association of Southeastern Wisconsin Spring Conference, Milwaukee, Wisconsin.

I would like to thank my dissertation advisor Dr. Richard A. Swanson, and committee members, Dr. Sandra J. Potthoff, Dr. Ross E. Azevedo, Dr. Gary N. McLean and Dr. Rosmerie J. Park. Special thanks to friend and colleague Dr. Toby M. Egan for his many helpful suggestions on this research.