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Long-Term Employment and Complementary Human Resource Management Practices

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  • Cynthia Gramm

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  • John Schnell

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    Abstract

    This paper identifies human resource management practices that we hypothesize will raise the return to and, hence, complement long-term-employment (LTE) contracts. Compared to firms that do not offer LTE contracts, we find that firms offering LTE contracts make greater use of a wide array of the hypothesized complementary practices relating to training, compensation, information-sharing, job design, employee-customer interactions, and responses to declines in the demand for labor. Additionally, we provide evidence of complementarities between LTE contracts and above average use of the hypothesized complementary practices in their effects on quit rates, an inverse proxy for employees’ reciprocal commitment to LTE. Copyright Springer Science+Business Media, LLC 2013

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    File URL: http://hdl.handle.net/10.1007/s12122-012-9151-z
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    Bibliographic Info

    Article provided by Springer in its journal Journal of Labor Research.

    Volume (Year): 34 (2013)
    Issue (Month): 1 (March)
    Pages: 120-145

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    Handle: RePEc:spr:jlabre:v:34:y:2013:i:1:p:120-145

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    Web page: http://www.springer.com/economics/journal/12122

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    Related research

    Keywords: Long-term employment; Human resource management practices; Complementarity;

    References

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    1. Kandel, Eugene & Pearson, Neil D., 2001. "Flexibility versus Commitment in Personnel Management," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 515-556, December.
    2. Gérard Ballot & Fathi Fakhfakh & Erol Taymaz, 2006. "Who Benefits from Training and R&D, the Firm or the Workers?," British Journal of Industrial Relations, London School of Economics, vol. 44(3), pages 473-495, 09.
    3. Lazear, Edward P, 1981. "Agency, Earnings Profiles, Productivity, and Hours Restrictions," American Economic Review, American Economic Association, vol. 71(4), pages 606-20, September.
    4. Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
    5. John T. Addison & Christopher J. Surfield, 2006. "The Use of Alternative Work Arrangements by the Jobless: Evidence from the CAEAS/CPS," Journal of Labor Research, Transaction Publishers, vol. 27(2), pages 149-162, April.
    6. Jyh-Jer Roger Ko, 2003. "Contingent and Internal Employment Systems: Substitutes or Complements?," Journal of Labor Research, Transaction Publishers, vol. 24(3), pages 473-490, July.
    7. Milgrom, Paul & Roberts, John, 1995. "Complementarities and fit strategy, structure, and organizational change in manufacturing," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 179-208, April.
    8. Jeffrey Pfeffer, 2007. "Human Resources from an Organizational Behavior Perspective: Some Paradoxes Explained," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 115-134, Fall.
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