Human Resource Differentiation and Labor Market Segmentation: A Systematic Review and Research Agenda

Abstract Purpose This article analyses and synthesises the literature linking human resource (HR) differentiation and labor market segmentation (LMS) to create a framework for further research in this area. Design/methodology/approach Building on a database-driven approach with additional backward and forward analysis, the study conducted a systematic literature review of 23 articles. Findings Two new properties of HR differentiation were identified: distribution shape and central tendency. Moreover, two groups of properties were distinguished: properties describing the process and those representing the outcomes of HR differentiation. In addition, by detailing the three components of HR differentiation dynamics (stability of employment segments, internal boundaries, and self-fulfilling prophecy), the analysis provided a deep understanding of the process by which employment segments emerge from HR differentiation. Finally, based on the review, a model was developed that captures the processes of mutual reinforcement between the intra-organizational and market segments of employment. Originality/value The review helps to structure the research field of HR differentiation by providing an extended catalogue of its properties, clarifying the role of external and internal factors, and describing its dynamics. The analysis also provides a starting point for further research linking HR differentiation and LMS.