Personality-Based Human Capital Resources Impact on Firm Performance

This literature review summarizes an article evaluating the influence of personality on firm performance, drawing from the Attraction-Selection-Attrition (ASA) perspective, Strategic Human Resource Management (SHRM), and human capital research. The review highlights the importance of personality-based human capital resources, emphasizing the roles of managers and employees. It discusses the relationship between the ASA model and organizational personality, the influence of personality on organizational departments like finance, and the impact of top management's personality on overall organizational outcomes. The review also addresses the direct and indirect effects of personality on firm performance, considering both internal (operational) and external (financial) factors. The research methodology involved questionnaires and literature review, with findings suggesting a correlation between emotionally stable managerial departments and good performance. Strengths of the article include significant measures and adherence to theories, while limitations include the use of single-item scales for job satisfaction and reliance on self-reports from a single region. In conclusion, the review emphasizes the importance of hiring personnel who align with the firm's personality to enhance labor productivity and overall performance.

Running head: Personality Vs Performance 1
Reviewing the Article
“Do Personality –Based Human Capital Resource Matter To Firm Performance?”
Student’s Name
University Affiliation

Personality Vs Performance 2
Summary
The article starts with an evaluation of various models and theories that explains how
personality influences the performance of a firm. According to Oh, Kim, & Van Iddekinge,
(2015) organizational performance is influenced by human capital resources based on individual
personality. The article analyses the Personality-based human capital resources using the
Attraction-Selection-Attrition prospective (ASA), Strategic Human Resource Management
(SHRM), and Human Capital Research in stressing on the issue of Personality in Organizations.
The study is based on qualitative research of various firms and managers.
It is evident that managers play a significant role in a firm because of their huge
involvement in administration of most activities done. Relatively, employees also take part in
the overall organizational performance. We note that there is a disparity in individual
personality, skills, and knowledge depending on areas of specialization. In addition, according to
Posthuma, Campion, &Masimova (2013) suggest that human capital resources are considered as
valuable resources in an organization relative to the individual personality.
The authors of the article point out the relationship between the ASA model and the
Organizational emergence of personality whereby ASA implies that most organizations hire and
keep those individuals whose personalities suit the organization. According to King, & Ryan,
(2015) organization performance helps us to understand ASA theory. The model shows that
firms formulate the organizational personality profiles, which helps to find individuals who will
use their personality in contributing to organizational goals. These profiles vary across
organizations by uniqueness, therefore, creating disparities in inter-firm performance.

Personality Vs Performance 3
It is important to take into consideration that personality influences major departments
of an organization such as the finance sector. Ployhart & Hale, (2014) suggest that human
resource based on personality influences finance succession and workforce productivity of a
firm. This phenomenon has been used by most organization to ensure that they keep the best
performance both internally and externally. Organization rather spend many resources on hiring
qualified personnel who will act as assets in the organization by improving both labor
productivity and financial productivity. Notably, the resource-based theory suggests that Human
resource is the most valuable asset to any organization. According to Bergeron, & Martinez,
(2014) a productive labor force is necessary for an organizational performance.
Moynihan, & Peterson, (2014) Personality influences performance in two levels that is
the individual level and the Organization level. Authors outline the huge gap between the two, as
it is unclear to suggest whether there is a relationship between personality-performance in
organizational levels and individual levels or whether the two have the same impact towards a
firm. In addition to that, Utility analysis deduces personality performance at the organization
level from the individual level by estimating the market price of total performance contributed by
both. Authors suggest that studies have not properly addressed this relationship by majorly
putting more emphasis on the intrafirm and less emphasis on inter-firm.
It is, therefore, significant to determine the performance of a firm based on personality
perspectives at the organization levels. Reading through, we note that the gap between Inter-firm
and Intrafirm has been contributed by external (financial) and internal (operational)
performances of a firm. On the other hand, research stresses on closing the gap between micro
and macro performance levels by putting more emphasis on human resources.

Personality Vs Performance 4
The article discusses how personality in top management influences the general outcome
of an organization. According to Judge, T.A., (2017) personality influences leadership attitudes
shown by leaders. Research done on the top management team suggests that administrators who
are emotionally stable and diligent will create an environment of positive relations between
organizational-level to the workforce productivity. Therefore, employees working under such
criteria will receive clear information from their managers and they will work positively towards
the goals of the organization and promote the increase in labor productivity and performance in
general. An Organization with such influence will be seen to produce good performance despite
the calamities that may occur to the working atmospheres. In addition to that, there will be no
financial constraints due to profitability present in the organization.
We learn that Similarity-attrition hypothesis and social theory identity suggest managers
in such organizations have a job satisfactory experience. Authors point out that organization with
more managers who lack job satisfaction will probably lead to administration problems causing
managerial difficulties. Employees in such organization receive less information about the goals
of the organization and have little or no experience thus reducing labor productivity and
performance. According to Kaplan, & Larcker, (2015) poor attitude of the CEOs minimizes
organization excellence because of low performance from the workforce, which is influenced by
managerial departments.
The article outlines the direct effects of personality on an organization. Authors suggest
that organizations with emotionally stable managers are considered progressive since such
managers formulate and keep a good environment that offers room for collaboration. In addition
to that, research on top management shows that organization with more emotionally stable
managers can handle disagreements in an effective way and remain oriented on the task.

Personality Vs Performance 5
According to Colbert et al., (2014) organizations with conscientious managers create a good
motive environment that allows employees to achieve the accredited tasks.
We note that outgoing managers generate more significant emotions, which advances
collective process such as administration and work strategies. This results in improved
communication activities and individuals gain experience. According to Colbert, (2014)
managers of an organization are responsible for influencing communications activities and
effective skills to other departments under them.
Diligent managers are considered to have the best performance environment, which is a
good trait in urging the employees to work towards the organizational goals. Organizational
administrations with such managers is motivated to work harder thus promoting performance and
productivity outcomes. According to Chadwick et al., (2015) the resource-based theory
emphasizes on the significance of administration motive as beneficial assets to a firm. On the
other hand, we learn that there are indirect effects of personality at the organization level. This is
well illustrated by the performance of labor productivity through managerial job satisfaction and
financial productivity.
Authors have addressed the issue of firm effectiveness by considering Immense and
limited Personality traits. They suggest immense personality characters are easier for competitors
to learn because they might be less firm specific. We note that limited human capital resources
might be strongly attached to a firm managerial job contentment and operational performance as
opposed to financial performance due to the benefits created by the superior human capital.
According to Barrick, Mount, & Li, (2014) the theory of meaningful work is based on the
personality traits, which integrate performance with job satisfaction.

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From the article, we note that the method used during data collection was questionnaires
reports and Literature research. Questionnaires were used to collect samples from different firms
and managers based on different industries through. The research was conducted under several
guidelines. The first guideline was based on the personality aspect, which is considered vital
according to Khamisa, & Oldenburg (2015). The second guideline used was the Job satisfaction.
It was noted that single-item measure of job satisfaction is greatly related with longer measures
of job satisfaction. The third guideline was Firm performance, which was based on the Internal,
and external performance. The evaluation suggested that internal performance was mainly
influenced by labor productivity while the external performance was influenced by the return on
equity.
In addition, rational controls based on the size of the firm, financial performance, and
models used to predict firm external performance were used to foresee managerial satisfaction at
the organizational level. From the data collected, we note that most of the findings correlated
with the research expectations in that most organizations had emotionally stable managerial
departments, which ensured good performance, and labor productivity was high. Relatively,
some findings were different from the research expectations since some organizations had
limited personality traits, which minimized stronger relationships with the internal or extremal
performance of the organization.
In my point of view, I consider the article having some strengths and limitations based on
the research done. To begin with the strengths, the article has used significant measures while
undertaking the research. We note that research was conducted based on three key elements that
are personality, job satisfaction, and firm performance. These three are reliable guidelines in

Personality Vs Performance 7
providing information about the operational organization performance both external and internal
performance.
Secondly, the research has adhered to theories such as the resource-based theory and used
to determine firm performance based on personality human capital. We note that the implication
of the theories in determining the performance of an organization results in resourceful
information that is reliable. In addition, reliable statistical data retrieved from Korea
Informational Services (KIS) was used while evaluation firm performance during the research
activities.
Thirdly, the researchers collected samples through questionnaires from various industries
and managers. This is a reliable way of obtaining information from a diverse number of sources.
In addition, qualitative analysis is made on these data and accurate and realistic results will be
reflected at the end. The essence of having information from a variety of sources is that the
outcomes of the results produced will mostly be related to the expectations of the research.
On the limitations side, while measuring job satisfaction, single item scale was used.
Fishers, & Matthews, (2016) suggest single-item scale measures are not reliable ways of
examining the individual level performance since the research here was based only on one
motive. It will be much better if the research could consider using employee reviews about their
jobs in making. In addition, the researchers would have used comments from suggestion box is
organizations in order to find out where employees are satisfied with their routine departmental
jobs.

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In addition to that, Angalim & Grant, (2016) implied that personality traits account for
irrelevant incremental variance. Therefore, the common method variance might have caused an
inflation on the relation between personality and managerial job satisfaction in that the two were
measured using subjective reports in the same study. The research relied on self-reports on a
single region. It is appropriate if Self-reports would have been effective in different survey
studies at different places of research.
In conclusion, research done provides clarifications on personality-based human capital
resources. We have learned that organization, which hires personnel who correlate with the
firm’s personality, will help in attaining the goals of the firm. For this reason, personality is yet
declared a major issue that influences the performance of an organization either external or
internal performance. Organizations that want to increase their labor productivity and
performance should, therefore, put more emphasis on this matter

Personality Vs Performance 9
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