Human Resources Practices, Person-Environment Fit and Employee Turnover Rates: A study in the “Best Companies to Work For” in Brazil

Abstract

This work examines whether the Person-Environment Fit (P-E Fit) mediates the relationship between Human Resource Management (HRM) practices and Organizational Performance in the “Best Companies to Work For” in Brazil. The research is a descriptive quantitative cross-sectional survey. The population is the 500 “Best Companies to Work For” in Brazil, according to a database from the Institute of Directors (FIA), with data collected in 2010. The research sample consisted of 57 companies assessed in terms of People Management Practices and employee turnover, and 26,469 employees from these firms assessed in terms of Person-Environment Fit. Factor analysis pointed four dimensions for P-E Fit: Person-Job Fit, Person-Organization Fit, Person-Group Fit and Person-Supervisor Fit, in accordance with the literature on the topic. Regression analysis showed that HRM practices influence employee turnover: the more sophisticated the practices, the lower the turnover rates. HRM practices also affect Person-Job Fit, Person-Organization Fit and Person- Group Fit – the Person-Supervisor Fit was not impacted by practices. However, Person-Environment Fit (in its four dimensions) presented no mediating effect between HRM practices and employee turnover. Moreover, Person-Job Fit did not prove to have a mediating effect, but influenced turnover.

Keywords: People Management Practices, “Person-Environment Fit”, Organizational Performance.