Adopting state-of-the-art HRM practices is associated with higher performance than firms that do not adopt them.

• A. False
• B. Not stated
• C. True
• D. Not Applicable

Answer: (C)

Adopting state-of-the-art HRM practices centers on building a workforce whose capabilities, motivation, and opportunities are tightly aligned with the organization’s goals. When a company implements advanced HRM—think selective hiring, rigorous training and development, strong performance management, and pay-for-performance or high-involvement practices—it enhances employees’ skills, engagement, and willingness to contribute, which tends to boost productivity, quality, and innovation. That combination often translates into higher performance outcomes compared with firms that do not adopt such practices, which is why there’s a positive association observed in research. It’s worth noting that the link shows correlation rather than guaranteed causation, and the strength of the effect depends on thoughtful design and effective execution within the specific context.