Strategic HRM and organisational performance: does turnover intention matter?

Abstract

Purpose Applying the job-demand resources model and the psychological contract theory, this paper aims to examine the mediating influence of employee turnover intentions (ETI) on the relationship between strategic human resource management (SHRM) and perceived organisational performance (POP). Design/methodology/approach With a two-phase data-collection method, 200 complete responses were collected through an online questionnaire survey. This study applied a structural equation modelling to examine the multivariate associations and provided comprehensive outcomes for the proposed hypothesised model. Findings This study suggests that SHRM has direct significant effects on both ETI and POP; partial mediational effect on POP via ETI; and ETI has negative effect on POP. Practical implications This paper suggests that organisations aiming higher POP should encourage SHRM and improve their strategic approaches of HRM. The implications of the study results can help organisations to recognise the adverse effects of ETI and effective SHRM outcomes. Originality/value Despite the significant relationship between HRM and organisational performance, limited empirical research has been conducted on the mediational influence of ETI. This paper examines the unique meditational role of ETI on the relationship between SHRM and POP, which has not been utterly observed from employee perspective.