Associate Professor University of Minnesota University of Minnesota
Abstract: Human resource development (HRD) research has not clearly addressed when training investment leads to a firm’s performance. Given that firms’ slack resources are interwoven with their contexts and strategies, it is necessary to explore strategic roles of HRD in human resource (HR) slack situations. This study examines the relationship between training investment and performance outcomes of firms, such as productivity and added value, with interactions with HR slack using firm-level longitudinal panel data. The three waves of the data obtained bi-annually (2015-2019) from the Workplace Panel Survey include 2,044 cases from 682 firms. A random-effects model reveals that HR slack moderates the linear relationship between training investment and productivity. Training investment positively predicts productivity only when HR slack is high, offering a different effectiveness of training investment increase by HR slack. Moreover, HR slack moderates the curvilinear relationship between training investment and added value. The positive relationship is nearly linear when HR slack is low whereas a U-shaped relationship is found when HR slack is high, indicating that firms with high HR slack have a stronger effect of training investment increase. This study supports the training effectiveness model from a contingency perspective and advances theories of strategic HRD and a resource-based view. Practical implications and limitations for future research are discussed.
