Do "high-performance" work practices improve establishment-level outcomes?
AbstractStudies of how different work practices affect organizational performance have suffered from methodological problems. Especially intractable has been the difficulty of establishing whether observed links are causal or merely reflect pre-existing differences among firms. This analysis uses a national probability sample of establishments, measures of work practices and performance that are comparable across organizations, and, most important, a unique longitudinal design incorporating data from a period prior to the advent of high-performance work practices. The conclusion most strongly supported by the evidence is that work practices transferring power to employees, often described as 'high-performance' practices, raise labor costs per employee, suggesting that they may raise employee compensation. Higher compensation is a cost to employers, although some statistically weak evidence points to these practices raising productivity. The authors find little effect of high-performance work practices on overall labor efficiency, which they measure as the output per dollar spent on labor. (Author's abstract.)
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Bibliographic InfoArticle provided by ILR Review, Cornell University, ILR School in its journal ILR Review.
Volume (Year): 54 (2001)
Issue (Month): 4 (July)
Postal: 381 Ives East, Cornell University, Ithaca, NY 14853-3901
Other versions of this item:
- David Neumark & Peter Cappelli, 1999. "Do "High Performance" Work Practices Improve Establishment-Level Outcomes?," NBER Working Papers 7374, National Bureau of Economic Research, Inc.
- M11 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Production Management
- M12 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Personnel Management; Executives; Executive Compensation
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