A Study on the Relationship between Human Resource Management and Firm Performance Based on VAR Modeling

In this paper, after analyzing the VAR model, we design the Gram causality test between human resource management and enterprise performance and establish a structural equation combining multiple regression and factor analysis to explore the interrelationship between the two, in addition to evaluating enterprise performance based on mutation theory. In order to study the relationship between human resource management and enterprise performance, assumptions are made about the relationship between the two, a conceptual model of the role path relationship between human resource management and enterprise performance is established, and the proposed assumptions are empirically analyzed based on the existing literature and actual data. The results show that the coefficient of HR practices is 10.048343, which is significant at the 0.0031 level, and the goodness of fit is 0.403881, and HR practices do have a relatively significant impact on business performance, and the marginal impact is 10.048343, which indicates that HR practices significantly amplify business performance. This study confirms that human resource management is positively correlated with firm performance and that firms can optimize their human resource management strategies, which in turn will enhance their performance and provide impetus for their progress and development. © 2023 Yue Qin et al., published by Sciendo.