Over the past two decades, the linkage between HRM and performance has receive much attention in HRM research. Research evidence indicates that HRM is, at least weakly, related to firm performance (Combs et al., 2006) Recently, Guest (2011) concluded that, although significant progress has been made in the study of HRM and performance, some core questions still remain unanswered. According to Guest (p.3) ‘this is largely attributed to the limited amount of research that is longitudinal and has been able to address the linkages between HRM and performance and to study the management of HR implementation’. This article address these issues by examining the effect of line managers’ people management activities on employees’ attributes and behavior using longitudinal data. We thereby contribute to the current debate about the relationship between HRM and performance in three ways.