Lorena Para González, Hrm and Efqm Model - EOQ

AUTHORS:
PHD STUDENT LORENA PARA GONZÁLEZ
(University Centre of Defence at the Spanish Air Force Academy)
PHD ÁNGEL RAFAEL MARTÍNEZ-LORENTE
(Technical University of Cartagena)
PHD DANIEL JIMÉNEZ-JIMÉNEZ (University of Murcia)
1

INTRODUCTION
• Human resources: competitive advantage for
companies.
• Continuous improvement and TQM.
• EFQM model “People criterion”.
• Relationship between “People criterion” and
organizational performance.
2

AIM
• Analyze the role of the personnel function on the
organizational performance, contextualizing this
research on EFQM model of excellence, emphasizing
the task of human capital on it.
3

EFQM MODEL OF EXCELLENCE
• Aim: to help European companies to be more competitive and to
demonstrate that Excellence is essential.
4

HUMAN RESOURCES ON THE EFQM
MODEL (I)
• Positive empirical evidence: effect of HRM on
performance and results.
• People criterion is divided in subcriteria:
1.- Planning, management and improvement of HR
2.- Identification, development and maintenance of
knowledge and capability of persons.
3.- Implication and assumption of liability.
4.- Existence of dialogue among people.
5.-Compensation, acknowledgment and attention.
Relationship among enablers and results supported.
5

HUMAN RESOURCES ON EFQM MODEL
(II)
• EFQM model helps to get a major effectiveness of the
job.
• A company could achieve a superior satisfaction of
their employees provided that it is concentrated on the
improvement of the completion of each worker
(Eskildsen & Dahlgaard, 2000):
H1: People criterion in the EFQM model is
positively related to organizational performance.
6

HUMAN CAPITAL AND THE COMPETITIVE
ADVANTAGE OF THE FIRM (I)
• Human capital: people possess skills and abilities that
provide a major performance to firms.
• Human resources can add value to the company, since
they are unique and difficult to replicate or substitute.
• Human capital value: capacity to improve the
efficiency and effectiveness of the firm.
• Human capital uniqueness: unique routines and
procedures that have limited value outside the firm.
7

HUMAN CAPITAL AND THE COMPETITIVE
ADVANTAGE OF THE FIRM (II)
• “Core employees”: firm- specific human capital.
• Positive impact of human capital on performance (Hitt
et. al., 2001), especially valuable and specific human
capital:
H2: Firm-specific human capital is positively
related to organizational performance.
8

HUMAN CAPITAL AND THE COMPETITIVE
ADVANTAGE OF THE FIRM (III)
• Valuable human capital relates to the capability to
develop a better efficiency of the firm. This perspective
asserts that in order to obtain a higher firm
performance, the abilities, competences and skills of
the employees have a key role (Buller and McEvoy,
2012).
9

HUMAN CAPITAL AND THE COMPETITIVE
ADVANTAGE OF THE FIRM (IV)
• An appropriate personnel recruitment and selection
policy, along with a workforce that is trained, involved
and committed to quality and to the improvement of
the activities of the organization must have an effect
on its human capital and the improvement of the
organization’s key processes.
H 3 : Valuable human capital is positively related to
organizational performance.
10

HUMAN CAPITAL AND THE COMPETITIVE
ADVANTAGE OF THE FIRM (V)
• Excellent companies should count with personnel, that have
knowledge and competences valuable and specific for each
company.
• Design every organizational system paying attention to
attracting, developing and motivating the best people (Lawler
III, 2009): COMPETITIVE ADVANTAGE.
• Nabitz et. al. (2009) show that some measures for people
criterion of EFQM model affect positively human capital:
H4: People criterion in the EFQM model is positively
related to human capital.
11

HUMAN CAPITAL AND THE COMPETITIVE
ADVANTAGE OF THE FIRM (VI)
• Buller and McEvoy (2012) found in their research that
certain HRM practices suggested by the People
criterion of the EFQM model, such as an incentive
compensation or performance assessment, contribute
positively to create distinctive competences.
• Firm-specific human capital is considered as an
essential intangible resource of an organization,
because is difficult to imitate due to the complexness
of the creation of distinctive competences (Chisholm
and Nielsen, 2009).
H 5 : People criterion in the EFQM model is positively
related to firm-specific human capital.
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PROPOSED MODEL
13

METHODOLOGY (I)
• Population and Sample: 3.814 companies from SABI
database with more than 100 employees.
• Structured questionnaire via webpage led to
following managers: quality, production, human
resources and marketing.
• Significant correlation of 0.823 (p=0.01) between
number of companies at each sector in the sample and
population.
• Likert scale of 5 points.
14

METHODOLOGY (II)
• Measures:
- EFQM people criterion: 10 items from the subcriteria.
- Value and uniqueness of human capital: human
resource architecture of Lepak and Snell (2002).
- Performance: 4 items for each four results criteria
of EFQM performance criteria.
- Control variables: organizational size and antiquity.
15

METHODOLOGY (III)
• Analysis: structural equations modeling to test the
hypotheses, using EQS 6.1 software.
Mean
SD
Lowest
t-value
Cronbach
alpha
SCR a
AVE b
Personnel criteria 4,0756 ,44165 - ,862 - -
Human capital value 3,7085 ,53102 6,647 ,809 ,824 ,501
Human capital uniqueness 3,2736 ,69811 11,151 ,912 ,911 ,672
Performance 3,9956 ,40776 5,982 ,788 ,798 ,510
χ 2 (74)=110.280, NNFI=0.968, CFI=0,974, IFI=0,974, GFI = 0,927, RMSEA=0,050
a
Scale composite reliability (qc=(Aki)2 var (n)/[(Aki)2 var (n) +Ahii]; (Bagozzi and Yi, 1988)
b
Average variance extracted (qc=(Aki)2 var (n)/[(Aki)2 var (n) +Ahii]; (Fornell and Larcker, 1981)
16

RESULTS
• H1 supported: companies that follow HR policies mentioned in people
criterion of EFQM will obtain better results.
• H2 and H3 supported: human capital value and uniqueness are
important to obtain better results. EFQM model incoporates HR policies
that help to generate human capital in organizations.
Paths
Standardized
coefficient
Td Hypothesis
People criterion → Performance ,418 4,705 Supported
People criterion→ HC value ,393 4,307 Supported
People criterion→ HC uniqueness ,355 4,685 Supported
HC value → performance ,149 2,049 Supported
HC uniqueness→ performance ,248 3,270 Supported
Value and uniqueness human capital will play a mediator role for
emphasizing the effects of human management policy in EFQM over
organizational performance.
17

RESULTS (II)
• H4 and H5 supported: for a successful
implementation of an excellence model, it is crucial
that the executives acquired a role of “executives of
persons”. The aim is to create HRM practices aligned
with strategy, connecting effective and motivated
employees with the organizational strategy, improving,
therefore, performance
18

CONCLUSIONS
- HRM play a key role in firm’s competitive advantage.
- Human capital value and uniqueness create a
competitive advantage for the firm.
- Positive relation among personnel management and
organizational results.
- An application of the principles included in the
“people criterion” of EFQM model increases the
satisfaction of employees.
- HC value and uniqueness play a mediation role in
the relationship between people and performance
criteria in the EFQM model.
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CONCLUSIONES (II)
FUTURE RESEARCH
• Examine which HRM practices are linked to the model
and their impact to organizational performance.
• Analyze what type of organizational culture is
required to foster the relationships of the model.
• Compare which HRM practices are derived from
EFQM and TQM or ISO norms.
20