The Goldilocks Effect of Strategic Human Resource Management? Optimizing the Benefits of a High-Performance Work System Through the Dual Alignment of Vertical and Horizontal Fit

Although vertical and horizontal fit in strategic human resource management are foundational to the links between a high-performance work system (HPWS) and organizational performance, little is known about how these two fits interact to affect organizational performance. We address this shortcoming while also advancing knowledge on each type of fit. We offer a more nuanced examination of vertical fit (which has typically been assessed with respect to organizations’ broad strategic types) by focusing on the alignment of an HPWS with an organization’s market entry timing mode—a key element of strategy. We propose that among organizations pursuing new product development, the effect of an HPWS on organizational performance is most positive under a fast-follower entry timing, followed by a first-mover and finally a fence-sitter entry timing. We then hypothesize that the benefit of vertical fit is magnified when the complementary human resources practices comprising an HPWS are implemented with greater internal consistency (or with similar intensities) across the ability, motivation, and opportunity domains—reflecting a positive interaction between vertical and horizontal fit in predicting the effectiveness of an HPWS. Analyses of four-wave nationally representative panel data yield strong support for our dual-alignment model of SHRM.