A shareholder perspective has traditionally been used to measure firm performance, using financial performance indicators such as return on investment (ROI), financial and market performance and productivity (Becker and Gerhart, 1996). This is not surprising given that the primacy of shareholder concerns (in the Anglo-Saxon corporate governance [CG] system at least) means that for boards charged with satisfying interests of shareholders, the ultimate human resource management (HRM)–firm performance-related question would be: How does a particular change in HRM affect shareholder returns? The main HRM issue from this perspective can therefore be summed up as a question of costs versus contribution/ value creation. There is a general agreement in the literature that HRM has the potential to affect firm performance through its influence on employee behaviour (Combs et al., 2006; Beer, 2015; Chadwick et al., 2015; Cappelli, 2015). However, there is very little agreement regarding how to achieve this potential because of various methodological and conceptual limitations. These include a lack of consensus regarding how to best operationalise HRM and firm performance, a tendency to examine different human resource (HR) practices as well as to use different measures, and to report associations rather than causation. Studies are also inconsistent in how they define the concept of firm performance, and are questionable in terms of their cross-national generalisability (Wall and Wood, 2005; Guest, 2011; Paauwe et al., 2013; Brewster et al., 2016). There is also further evidence that suggests that executives fail to see tangible associations between the role of the HR department and firm performance (Charan et al., 2015). Creating models that reflect a broader view of performance and more complete taxonomies of factors influencing business and HR strategies remains a challenge (Cascio, 2015). Becker and Gerhart (1996) noted over 20 years ago when empirical HR-performance research was in its infancy, that the mechanisms through which HR decisions create and sustain value are complicated and not well understood. Some two decades and many empirical studies later, Guest (2011, p. 3) suggests that “we are more knowledgeable but not much wiser, in that we have not been able to explain the demonstrated association between HRM and performance with any conviction”.