The role of strategic reference points in explaining the nature and consequences of human resource strategy

We examine how managers use strategic reference points (SRPs) or benchmarks to guide their strategic decision making with regard to human resource (HR) issues and how these benchmarks can affect the performance-based consequences of such decisions. After describing the reference points that are relevant to the HR system, we develop propositions regarding the likely configuration of such reference points and their impact on the nature of HR policies and practices. We also explain how the management of SRP fit and consensus can reduce the likelihood that HR policies and practices will have a negative effect on a firm's performance. Organizationwide implications are discussed.