Prediction in HRM research - A gap between rhetoric and reality

Abstract

There are broadly two dimensions on which researchers can evaluate their statistical models: explanatory power and predictive power. Using data on job satisfaction in ageing workforces, we empirically highlight the importance of distinguishing between these two dimensions clearly by showing that a model with a certain degree of explanatory power can produce vastly different levels of predictive power and vice versa - in the same and different contexts. In a further step, we review all the papers published in three top-tier human resource management journals between 2014 and 2018 to show that researchers generally confuse explanation and prediction. Specifically, while almost all authors rely solely on explanatory power assessments (i.e., assessing whether the coefficients are significant and in the hypothesised direction), they also derive practical recommendations, which inherently result from a predictive scenario. Based on our results, we provide HRM researchers recommendations on how to improve the rigour of their explanatory studies.