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Introduction 9 1.1 Strategic Human Resource Management Employees can be considered an organization’s most valuable assets (Boselie, 2014; Paauwe & Farndale, 2017). Reflecting this value, employees have been dubbed the human resources of organizations and their combined knowledge, skills, and abilities have been labelled the organizations’ human capital (Baron & Armstrong, 2007; Coff, 2002). In order to compete and survive economically, organizations need to manage their human capital in a profitable and sustainable way (Barney, 2001; Baron & Armstrong, 2007; Huselid & Becker, 2011; Wright et al., 1994). This implies that organizations need to be effective and/or efficient in the way they hire, deploy, develop, motivate, and retain their employees. In academia, a whole stream of HRM research is dedicated to unveiling the optimal ways in which to organize and manage people in organizations. In practice, many contemporary organizations have a specialized HRM function – or (several) HRM professional(s) – in place to design and champion the policies and practices that should be implemented. 1.1.1 HRM & Performance Since the eighties, the HRM function has sought to convince others of the ways in which it adds value to organizational operations (Boselie, 2014; Boselie, Dietz, & Boon, 2005; Boxal & Purcell, 2000; Paauwe, 2009; Paauwe & Farndale, 2017; Paauwe, Wright, & Guest, 2012). Mark Huselid (1995) was among the first to substantiate the claimed influence of HRM practices for organizational performance scientifically. His research demonstrated that the extent to which organizations implemented so-called High Performance Work Systems related to a reduction in employee turnover, improved organizational profits, and a higher market value (Huselid, 1995). Huselid’s high performance systems included among others sophisticated selection and training practices, participation programs, formal performance appraisals, and contingent pay schemes. Since this seminal publication, a large body of research has demonstrated the impact of the HRM function and its policies and practices on the operational and financial performance of organizations (see Combs, Liu, Hall, & Ketchen, 2006; Crook, Todd, Combs, Woehr, & Ketchen, 2011; Jiang, Lepak, Hu, & Baer, 2012; Subramony, 2009). Currently, the leading paradigm is that HRM influences operational and financial outcomes because it improves employees’ abilities, their motivation, and their opportunities to contribute to organizational goals (Jiang et al., 2012). Yet, not everybody is fully convinced of the positive impact of HRM. For example, there are three recurring topics of discussion: the causal order of effects, how to measure HRM impact, and the influence of context. 1.1.1.1 Causal Order First, critiques have been raised regarding the causal direction of the relationship between HRM and performance. Early empirical studies exploring HRM’s impact have used mostly cross-sectional or even post-predictive designs (Wright, Gardner, Moynihan, & Allen, 2005). Hence, their results do not provide conclusive evidence for the causal impact of HRM implementation. Recognizing this limitation, scholars have examined the effects of HRM via longitudinal research designs as well. Such longitudinal studies have generally found an equally positive impact of HRM on performance outcomes as the