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Do “High-Performance†Work Practices Improve Establishment-Level Outcomes?

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  • Peter Cappelli
  • David Neumark

Abstract

Studies 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.

Suggested Citation

  • Peter Cappelli & David Neumark, 2001. "Do “High-Performance†Work Practices Improve Establishment-Level Outcomes?," ILR Review, Cornell University, ILR School, vol. 54(4), pages 737-775, July.
  • Handle: RePEc:sae:ilrrev:v:54:y:2001:i:4:p:737-775
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    Cited by:

    1. repec:iza:izawol:journl:y:2017:n:377 is not listed on IDEAS
    2. Dr Alex Bryson, 2011. "HRM and Workplace Motivation: Incremental and Threshold Effects," National Institute of Economic and Social Research (NIESR) Discussion Papers 381, National Institute of Economic and Social Research.
    3. Philip Mellizo & Jeffrey Carpenter & Peter Hans Matthews, 2017. "Ceding control: an experimental analysis of participatory management," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 3(1), pages 62-74, July.
    4. Phillipe Aghion & Nicholas Bloom & John Van Reenen, 2014. "Incomplete Contracts and the Internal Organization of Firms," Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(suppl_1), pages 37-63.
    5. Yun-Hwa Chiang & Chu-Chun Hsu & His-An Shih, 2015. "Experienced high performance work system, extroversion personality, and creativity performance," Asia Pacific Journal of Management, Springer, vol. 32(2), pages 531-549, June.
    6. Joseph R. Blasi & Richard B. Freeman & Christopher Mackin & Douglas L. Kruse, 2010. "Creating a Bigger Pie? The Effects of Employee Ownership, Profit Sharing, and Stock Options on Workplace Performance," NBER Chapters,in: Shared Capitalism at Work: Employee Ownership, Profit and Gain Sharing, and Broad-based Stock Options, pages 139-165 National Bureau of Economic Research, Inc.
    7. Annalisa Cristini & Tor Eriksson & Dario Pozzoli, 2013. "High-Performance Management Practices and Employee Outcomes in Denmark," Scottish Journal of Political Economy, Scottish Economic Society, vol. 60(3), pages 232-266, July.
    8. Caroline Mothe & Uyen T. Nguyen-Thi & Phu Nguyen-Van, 2015. "Assessing complementarity in organizational innovations for technological innovation: the role of knowledge management practices," Applied Economics, Taylor & Francis Journals, vol. 47(29), pages 3040-3058, June.
    9. John T. Addison & Clive R. Belfield, 2004. "Union Voice," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 563-596, October.
    10. Hideo Owan, 2004. "Promotion, Turnover, Earnings, and Firm-Sponsored Training," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 955-978, October.
    11. Tavares, Priscilla Albuquerque, 2015. "The impact of school management practices on educational performance: Evidence from public schools in São Paulo," Economics of Education Review, Elsevier, vol. 48(C), pages 1-15.
    12. repec:eee:iburev:v:27:y:2018:i:3:p:563-583 is not listed on IDEAS
    13. Alex Bryson & Michael White, 2016. "When does HRM 'Work' in Small British Enterprises?," DoQSS Working Papers 16-01, Department of Quantitative Social Science - UCL Institute of Education, University College London.
    14. Adel Ben Youssef & Ludivine Martin & Nessrine Omrani, 2014. "The complementarities between Infomation and Communication Technologies Use, New Organizational Practices and Employee's Contextual Performance: Evidence from Europe in 2005 and 2010," Post-Print halshs-01068238, HAL.
    15. Riccardo Leoni, 2013. "Organization of work practices and productivity: an assessment of research on world- class manufacturing," Chapters,in: Handbook of Economic Organization, chapter 17 Edward Elgar Publishing.
    16. Guerci, Marco & Radaelli, Giovanni & De Battisti, Francesca & Siletti, Elena, 2017. "Empirical insights on the nature of synergies among HRM policies - An analysis of an ethics-oriented HRM system," Journal of Business Research, Elsevier, vol. 71(C), pages 66-73.
    17. Bruce E. Kaufman, 2013. "The economic organization of employment: systems in human resource management and industrial relations," Chapters,in: Handbook of Economic Organization, chapter 16 Edward Elgar Publishing.
    18. Casey Ichniowski & Kathryn L. Shaw, 2009. "Connective Capital as Social Capital: The Value of Problem-Solving Networks for Team Players in Firms," NBER Working Papers 15619, National Bureau of Economic Research, Inc.

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