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Chapter 1 10 results of the cross-sectional studies already indicated (Crook et al., 2011). However, they also demonstrated that the positive relationship between HRM and performance outcomes is often bidirectional (Guest, Michie, Conway, & Sheehan, 2003; Van de Voorde, Paauwe, & Van Veldhoven, 2010; Van de Voorde, Van Veldhoven, & Paauwe, 2010; Van Veldhoven, 2005). In this sense, more sophisticated HRM practices would not only lead to better performance but, the other way around, improved performance would also result in a higher degree of sophistication in HRM. 1.1.1.2 Balanced Perspective to Impact Second, although improved organizational performance may be most interesting outcome to the organizational stakeholders implementing HRM, there are other relevant implications of HRM. Scholars have argued that a more balanced perspective is necessary to fully appreciate HRM’s value (Paauwe, 2004). This balanced perspective would go beyond performance metrics and consider HRM’s impact on outcomes relevant to employees, or even to society as a whole. This aligns with the notion that HRM should not be about exploiting employees as a means to an end (i.e., the resource part), but about stimulating the mutual exchange relationship between an employer and an employee (i.e., the human part). Interestingly, studies that employ a balanced perspective have demonstrated that mutual gains can be achieved to some extent. Investing in HRM relates to improvements in individual and organizational performance as well as improvements in employees’ psychological well-being (Jiang et al., 2012; Kehoe & Wright, 2013; Van de Voorde, Paauwe, & Van Veldhoven, 2012). Only health benefits do not seem an immediate consequence of more sophisticated HRM implementation (Van de Voorde et al., 2012). When the general well-being of employees is also considered during HRM implementation, this could stimulate the organization’s legitimacy and the attraction, motivation, productivity, and retention of employees, in turn, contributing to organizational performance in the long run (Boselie, 2014; Jiang et al., 2012; Paauwe & Farndale, 2017; Van de Voorde et al., 2012). In light of these mutual gains, implementing sophisticated and sustainable HRM practices seems in the best interest of organizations that seek long-term viability. 1.1.1.3 Importance of Context A third, ongoing discussion regarding the impact of HRM is the role of context. Early HRM research had adopted a universalistic perspective where organizations that implement certain best practices in HRM will experience its positive impact (e.g., Huselid, 1995; Pfeffer, 1998). However, a different school of thought is that of the contingency or best fit perspective. Here, scholars argue that organizations should align their HRM policies and practices with their institutional, competitive, and cultural environment if they desire positive impact (Boxal & Purcell, 2011; Johns, 2006, 2017; Paauwe, 2004; Paauwe & Farndale, 2017; Ulrich & Dulebohn, 2015). This contingency perspective implies that the impact of HRM practices may vary between countries, sectors, and organizations. On top of this, research suggests that the impact of HRM may vary within an organization. On the one hand, employees differ in the ways in which they perceive and respond to HRM (Bowen & Ostroff, 2004; Croon, Van Veldhoven, & Peccei, 2014; Kehoe &