Impact of the Relationship between HR policy and Practices on Corporate Growth

Using data collected from an interview survey of intangible assets in Japan, this study analyzes the relationship between internal fit of human resource management (HRM), which is the fit between a human resource (HR) policy and its subordinate concept HR practices, and its impact on corporate growth in Japan.

The empirical results are as follows: First, corporations which adopt both results-oriented and lifetime employment-oriented HR policies at the same time face a negative effect on their corporate growth. Second, results-oriented HR practices themselves have a positive effect on corporate growth, but interactions between results-oriented HR practices and HR development practices have a negative effect. Third, interactions between a lifetime employment-oriented HR policy and HR development practices indicate a positive effect, but interactions between a results-oriented HR policy and HR development practices indicate a negative effect on corporate growth. These results imply that corporations need to consider the importance of internal fit of HRM, and how the lack of internal fit might have a negative effect on corporate growth.