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.