Construction and Validation of HRM-Strategy Integration Scale: A Structural Equation Modelling Approach

Abstract

Human Resource Management (HRM) in organizations has often appeared to be disjointed and haphazard, giving little consideration to the organization’s strategy. Debates in the 1980s and early 1990s, however, suggested the need to explore the relationship between HRM and corporate strategy more extensively. Researchers now emphasize that HR practices need to be integrated with firm strategy.Despite the increasing importance of HRM-strategy integration, there is a paucity of valid instruments for measuring such integration in the Indian context. Keeping in mind the fact that India is one of the fastest growing markets today, such a study is expected to be both timely and pertinent. Thus, a need was felt to develop and validate an instrument for measuring HRM-strategy integration in the Indian context. On the basis of an extensive literature review, two constructs of HRM-strategy integration were identified. The scales were empirically tested for unidimensionality, reliability and validity using Structural Equation Modeling (SEM) capabilities of LISREL 8.50. The study is pioneering in the sense that it provides a reliable and valid instrument for measuring HRM-strategy integration that has been empirically tested in the Indian context. Key Words: HRM-Strategy Integration, Indicator Reliability, Scale Reliability, Convergent Validity, Discriminant Validity, Predictive Validity, Structural Equation Modelling

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