[Excerpt] The purpose of this paper is related to these last two trends: we conceptually examine some of the mediating processes that might occur in the HRM – performance relationship, and try to make explicit their multilevel nature. In order to accomplish this, we will first explore the concept of variance, which is crucial to the analysis of any phenomena across multiple levels. We will show how virtually all existing SHRM research focuses on variance at one level of analysis while assuming constancy at other levels. We will next discuss the process through which HRM practices must act, and identify some of the relevant variables that have heretofore been virtually ignored in the empirical SHRM literature, specifically focusing on variance at different (unit vs. individual) levels of analysis. Finally, we will present some implications for theorizing and research in this area.