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Human Resource Management Systems and the Performance of U.S. Manufacturing Businesses

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  • Casey Ichniowski
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    Abstract

    This paper estimates the effects of systems of human resource management policies on the performance of U.S. manufacturing businesses. OLS results for labor productivity and Tobin's q models both reveal that nonunion businesses that employ a human resource management system with flexible job design, formal training, and workplace communication mechanisms have the highest levels of economic performance. Nonunion businesses with ''Union-style" human resource management systems involving grievance procedures, seniority-based promotions, and no flexible job design exhibit significantly lower levels of performance statistical models are unable to determine whether the more "progressive" human resource management system stimulates economic performance or whether this system is the appropriate choice for better performing businesses. Still, the positive :relationship between performance and this human resource management system suggests that this system will be more common in the future. In contrast, the "union-style" system appears to be a thing of the past. It is confined to unionized businesses in declining industries and very old nonunion businesses with low levels of economic performance.

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    File URL: http://www.nber.org/papers/w3449.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3449.

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    Date of creation: Sep 1990
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    Publication status: published as With Kathryn Shaw and Giovanna Prennushi, published as "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines", AER (1997).
    Handle: RePEc:nbr:nberwo:3449

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    1. Zvi Griliches, 1984. "Market Value, R&D, and Patents," NBER Chapters, in: R & D, Patents, and Productivity, pages 249-252 National Bureau of Economic Research, Inc.
    2. Brown, Charles & Medoff, James, 1978. "Trade Unions in the Production Process," Journal of Political Economy, University of Chicago Press, vol. 86(3), pages 355-78, June.
    3. Michael A. Salinger, 1984. "Tobin's q, Unionization, and the Concentration-Profits Relationship," RAND Journal of Economics, The RAND Corporation, vol. 15(2), pages 159-170, Summer.
    4. Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-90, October.
    5. Williamson, Oliver E, 1981. "The Modern Corporation: Origins, Evolution, Attributes," Journal of Economic Literature, American Economic Association, vol. 19(4), pages 1537-68, December.
    6. Amemiya, Takeshi, 1978. "The Estimation of a Simultaneous Equation Generalized Probit Model," Econometrica, Econometric Society, vol. 46(5), pages 1193-1205, September.
    7. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters, in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
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