The concept of performance covers both what has been achieved and how it has been achieved. Sheilds (2007: 20) explained that, ‘we can conceptualize work and work performance as a system’. This system comprises the three elements of inputs, throughputs (the processes and activities involved in transforming inputs into outcomes) and outcomes arranged in a linear sequence.
Identifying the HRM inputs is not difficult. Outcomes can be measured, the most obvious and most used measures in research studies being in terms of key performance indicators (KPIs), which identify the results or outcomes that are assumed to be crucial to the achievement of high performance and are usually to do with financial results (profitability) or productivity. Measuring the ‘how’ – the throughputs – is more difficult. As Purcell et al (2003: 2) remarked: ‘… we do not know why or how HR policies translate into performance. This is known as the “black box” problem’.