Employee perceptions of HR practices: A critical review and future directions

Scholars are directing more attention to employee perceptions of human resources (HR) practices and have explored issues such as whether and how employees’ idiosyncratic or collective perceptions of HR practices shape employee outcomes. To further this area of research, we seek to determine what authors mean when they refer to “employee perceptions of HR practices”. We review 105 articles from leading human resource management journals and find that employee perceptions of HR practices is not a monolithic concept. Rather, following previous scholars, we identify three distinct components of employee perceptions of HR practices: the ‘what’, ‘how’, and ‘why’. We critically summarize extant literature on these three components of employee HR perception and propose future research directions, including enriching the theoretical foundations of HR communication, embracing cross-national contexts, and enhancing practical relevance.

Over the last decade, the strategic human resource management field has paid increasing attention to employee perceptions of human resource (HR) practices (Beijer, Peccie, Van Veldhoven, & Paauwe, in press; Hewett, Shantz, Mundy, & Alfes, 2018; Ostroff & Bowen, 2016; Sanders, Shipton, & Gomes, 2014). Human resource management (HRM) scholars largely agree that employee perceptions of HR practices play a key role in influencing the effectiveness of these practices (e.g. Den Hartog, Boon, Verburg, & Croon, 2013; Jensen, Patel, & Messersmith, 2013; Jiang, Hu, Liu, & Lepak, 2017). At the individual level, employee perceptions of HR practices have been shown to mediate and moderate relationships between an organization’s HR practices and employees’ attitudes and behaviors (e.g. Aryee, Walumbwa, Seidu, & Otaye, 2012; Liao, Toya, Lepak, & Hong, 2009). At the organizational level, employee perceptions of HR practices have been identified as antecedents of unit-level performance (Bowen & Ostroff, 2004).

The rapidly expanding literature in this field has led to growing diversity in the way scholars conceptualize and operationalize employee HR perceptions. For example, the phrase “employee HR perceptions” has been used when discussing the perceived existence of certain HR practices within an organization as well as when discussing employees’ understanding of employers’ intentions behind HR practices. In this review, we aim to enhance clarity regarding the different approaches taken when researchers use the phrase “employee HR perceptions”. We build on Ostroff and Bowen’s (2016) work and identify three approaches that have been adopted when considering employee HR perceptions: the ‘what’, ‘how’, and ‘why’ of HR practices. The ‘what’ of an HR practices approach considers the content of HR practices through which an employer delivers messages to employees. The ‘how’ of an HR practices approach recognizes the possibility that the same HR content may lead to divergent outcomes depending on how such practices are framed and received by employees. The ‘why’ of an HR practices approach looks at the potential discrepancies in the way employees judge the motivations that lie behind their organization’s introduction of HR practices. We critically summarize existing research in the HR perception literature and adopt this three-fold lens to organize research in the area and to offer directions for future research.

Our study contributes to the HR perceptions field in two ways. First, we clarify the “employee perceptions of HR practices” construct and review research progress on the three different components (the ‘what’, ‘why’ and ‘how’) that have been subsumed under this umbrella construct. We critically summarize extant literature on the three components of employee HR perceptions and propose future research directions. Our review indicates that different components of employee HR perceptions address different aspects of the HR process, and rely on different theoretical assumptions and methodological approaches. Our review reveals that we lack knowledge about how the three different components of HR perceptions complement each other. In this review, we take stock on the different research streams in the field of employee perceptions of HR practices. Our review identifies the merits, limitations, and hidden assumptions of each research stream. We seek to help scholars develop integrative research across different components of employee HR perceptions.

Second, we extend prior reviews in this domain, presenting new insights. In relation to the ‘what’ component of employee perceptions of HR practices, we build on work by Beijer et al. (in press), who provide an insightful review on perceptual measures of HR practices. We extend Beijer et al.’s work by offering additional perspectives on how employee perceptions of HR are conceptualized and operationalized in the literature. Hewett et al. (2018) offered a summary of HR perception research through the lens of attribution theory. We build on this research by expanding the theoretical domain related to the ‘how’ and ‘why’ component of HR perception research. Specifically, we identify several theoretical approaches that we suggest would enrich this area. Our review also builds on, but goes beyond, Ostroff and Bowen’s (2016) work in the HR strength research stream (the ‘how’ of employee perceptions). Finally, Farndale and Sanders (2017) discuss the connection between national cultures and HR strength. We build on their insights and consider the implication of cultural influences on the dynamics of employees’ HR perceptions. Below, we explain the methodology adopted in this review. We then investigate the difference between the assumptions, concepts, and measures of the three components of employee HR perceptions. Next, we critically review the empirical findings on the perceived ‘what’, ‘how’, and ‘why’ of HR practices, and offer insights into how research in these areas of inquiry should advance.