Human Resource management, Institutionalisation and Organisational Performance

The relationship between Human Resource Management (HRM) and firm performance has been a hotly debated topic over the last decade, especially in the United States (e.g. Osterman, 1994; Huselid, 1995; MacDuffie, 1995). The question arises whether the domination of USA oriented models, however appropriate they might be for, say, the USA, hold in other for example more institutionalised contexts. Now we have the opportunity to study recent empirical data on the effectiveness of human resource management in the Netherlands, using Control versus Commitment HR Theory (Walton, 1985; Arthur, 1994) in combination with New Institutionalism (Dimaggio and Powell, 1983). We were able to include three different Dutch sectors/branches of industry i.e. Health care, Local Government and Tourism. Empirical results suggest that the effect of HRM is lower in highly institutionalised sectors (hospitals and local governments) than in a less institutionalised sector like hotels.