Examination of the Relationship between HRM Practices and Retention of Skilled Workers - Thesis Example

among many empirical studies is the discovery of how HRM practices actually result in improved firm performance, although firm performance is construed in different ways. Some pertain to enhancement of specific employee skills. For Prieto and Santana (2012), the specific skill they sought to confirm was ambidexterity – i.e., the ability to simultaneously explore new knowledge domains while exploiting current ones. A field study of 198 Spanish companies was conducted, focusing on three categories of high-involvement human resource practices: ability-enhancing, motivation-enhancing and opportunity-enhancing HR practices.

Factor loading and regression analysis were conducted on the HR practices and three other variables – social climate (as the mediating factor), ambidexterity, and firm performance. Findings from the study showed that HR practices contribute to establishing social climates which, in turn enhance ambidextrous learning and ultimately firm performance. One observation that may be made on this study is that the effect of HR practices on ambidexterity is not directly causal, but indirect. It is likely that the social climates created by HR practices also enhance a number of other skills likewise favourable to firm performance.

HR practices are therefore contributory, but not determinative, of the likelihood of skills development, including ambidexterity. HR practices are also seen to impact on firm performance relative to the ownership structure of the firm. Castrogiovanni and Kidwell (2010) examined the effects of HR practices on employee or franchisee managers and the resultant performance of their business units. A business unit that operates as a franchise imposes a different set of constraints upon management than that of a business unit integral to the parent corporation.

Franchising has variably been described as a geographic expansion strategy, a type of vertical integration, an organisational form, or an approach to conducting business,