The effects of congruence between digital HRM systems and previous non‐digital HRM systems on firms' data‐driven insights

Abstract

Although the application of digital technology has long been considered to be an important and integral trend in human resource management (HRM), emerging evidence hints that digital HRM systems may not always work well in practice, and increasing research suggests that the adoption of digital HRM systems might have negative effects on organizations. In this article, we investigate whether a match in the levels of internal consistency exhibited by a digital HRM system and an original high‐performance work system (HPWS), i.e. congruence, impacts firms' data‐driven insight generation. We find that congruence between the digital HRM system and the original HPWS has a negative impact on firms' capability to generate data‐driven insights. Furthermore, organizations with high levels of internal consistency in both the digital and the original non‐digital HRM systems (i.e. high–high congruence) exhibit better data‐driven insight generation than organizations with low levels of internal consistency in both systems (i.e. low–low congruence). The results also reveal that the effect of congruence negatively influences firm financial performance and mediated by data‐driven insight generation. We discuss the implications of this study and call for future research to consider the characteristics of digital HRM systems and the original traditional HRM systems simultaneously.