What are the problems in establishing a link between HRM and firm performance?

●   At present the studies report a promising association between HRM and outcomes, but we are not yet in a position to assert cause and effect (Guest, 1997).

●   HR practices seem to matter; logic says it is so; survey findings confirm it. Direct relationships between performance and attention to HR practices are often fuzzy, however, and vary according to the population sampled and the measures used (Ulrich, 1997).

●   Measures that use profit or shareholder value are too remote from the practice of people management to be useful (Purcell et al, 2003).