The relationship between HRM and performance was expected in 366 UK companies using objective and subjective performance measures and cross-sectional and longitudinal data. Using objective measures of performance,greater use of HRM is associated with lower labour turnover and higher profit per employee but not higher productivity. After controlling for previous years ' performance, the association ceases to be significant. Using subjective performance estimates,there is a strong association between HRM and both production and financial performance. The study therefore confirms the association between HRM and performance but fails to show that HRM causes higher performance.
The interest in strategic human resource management (HRM) has spawned a number of empirical research that investigated the impact of HRM practices on organizational performance. However,very little attention has been paid to address the impact of HRM practices on operations management and to generalize the findings across countries and industries. Success of some business decisions ( e.g. globalization and merger and acquisition) necessitates recognition and reconciliation of the differences among HRM practices in different countries and industries. This study attempts to generalize the efficacy of seven HRM practices proposed by pfeffer in the context of country and industry, focusing primarily on the effects of these practices on operations. The findings provide overall support for Pfeffer 's seven HRM practices and empirically validate an ideal-type HRM system for manufacturing plants.