There is a growing body of research showing that the methods used by an organization to manage its human resources can have a substantial impact on many organizationally relevant outcomes. Human resource management (HRM) practices have been linked with turnover (Arthur 19941, productivity (Ichniowski, Shaw, & Prennushi 1997; MacDufYie 1995), financial returns (Delcry & Doty 19961, survival (Welbourne & Andrews 19961, and firm value (Huselid 1995). This growing area of research has been labeled strategic human resource management (SHRM) in that it emphasizes the strategic role of human resources management in meeting business objectives. Estab~shing that HRM practices are linked with firm effectiveness is an important first step in this line of research, however, there is still little understanding of the mechanisms through which HRM practices influence effectiveness. For instance, Delaney and Huselid (1996) stated that researchers still do not know “how HRM practices affect org~izational outcomes, whether some practices have stronger effects than others, and whether complemtarities or synergies among such practices can further enhance organizational performance” (p. 950). This line of research has been interesting in that it points to the importance of human resources, but it has provided few real insights for organizations wishing to gain a competitive advantage through human resources. The purpose of this article is twofold. First, I provide a brief review of the major theoretical and empirical work completed to date in SHRM, focusing most closely on the fit of HRM practices into a coherent system. Second, I present several issues critical to empirical research in SHRAiI on which researchers must focus greater attention. To date, there is clearly no consensus as to how researchers must address these issues. It is argued throughout this article that the conceptual foundations of SHRM have been relatively weak and many of the empirical investigations have made assumptions not driven