Abstract:

It is widely acknowledged that firms’ employees and systems of Human Resource Management (HRM) practices used to manage them are critical for organizational success. Those sets of practices associated with so called High Performance Work Systems (HPWS) have shown to be highly effective for the improvement of firm performance. The term HPWS refers to a philosophy or (which is the same) a set of principles of HRM that emphasizes the use of management practices providing employees with the skills, motivation and latitude resulting in a workforce which is a source of competitive advantage (Huselid, 1995). Examples of high performance HR practices would include careful selection, performance evaluation, group incentives, extensive training, flexible job design, teamwork and information sharing.

By virtue of the positive impact that HPWS have proved to produce on several firm outcomes (e.g. workforce turnover, productivity, profitability), they are often associated with “best practice” models of HRM. Thus, many scholars recommend their use in every firm, irrespective of strategy pursued, sector, size and even the country of operation (Huselid, 1995; Pfeffer, 1998). Recently, however, a growing number of critics (e.g. Boxall and Macky, 2009) have questioned the claims for the international generalizability of the efficacy of HPWS. Criticisms arose as a consequence of the “cultural sensitiveness” developed during the last decades within the HRM literature, which has boosted so called Comparative HRM studies. These studies have shown that theories and practices that work in one cultural and institutional environment do not necessarily apply within the borders of other contexts, as things are done differently in different settings (Hofstede, 1993). Hence, causal relationships between HRM practices and firm performance which are found in one cultural and institutional context cannot be automatically and uncritically extended to others.

Using data derived from Cranet 2005 dataset, we conduct an international comparative analysis to explore the impact of HPWS on two performance indicators (i.e. labor turnover and profitability) of companies that operate in four diverse countries: the United Kingdom (i.e. a Liberal Market Economy), Germany (i.e. a Coordinated Market Economy), and Greece and Spain (i.e. two Mixed Market Economies). Results show that HPWS travel well from one country to another, as such management philosophy proves to be equally effective in all the countries considered. However, our results do not allow excluding that HPWS need to be tailored to each national context through idiosyncratic HR practices. The study ends by providing a discussion of the value of such findings for academicians, practitioners and policy makers, with particular reference to the current economic crisis.

References:

Boxall, P., & Macky, K. (2009). Research and theory on high-performance work systems: Progressing the high involvement stream, Human Resource Management Journal, 19: 3–23.

Hofstede, G. (1993). Cultural constraints in management theories, Academy of Management Executive, 7: 81-94.

Huselid, M. A. (1995). The impact of human resource management practices on turnover, productivity, and corporate financial performance, Academy of Management Journal, 38: 635-672.

Pfeffer, J. (1998). The Human Equation: Building Profits by Putting People First. Boston, MA: Harvard Business School Press.

Keywords:

Human Resource Management, High Performance Work Systems, International Comparative Analysis.