HRM Signals for the Capital Market
Human Resource Management · 2016 · Volume 55 · Issue 6
Abstract
This conceptual study contributes to an emerging literature at the intersection of strategic HRM and finance, which is concerned with the undervaluation of future-oriented HRM practices in the capital market and consequent disincentives for managers to invest in such HRM practices. More specifically, the study contributes to a search for signals of HRM investments that the capital market either attends to or should attend to. It focuses on potential signals of high-performance work systems (HPWSs), constituting an HRM investment that has been at the center of research in strategic HRM. Based on signaling theory, a model is proposed of relationships among three signal characteristics (signal fit, signal erosion, and signal diffusion) and sustainable signal correlation. The model provides a basis for the exploration of alternative strategies for the establishment of an HRM signal tailored specifically to the needs of the capital market. © 2015 Wiley Periodicals, Inc.
Keywords
strategic HRM, signaling theory, high-performance work systems, securities analysts, capital market signaling, HRM index, HRM certificate
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