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Human Resource Management and Organizational Performance: Evidence from Retail Banking

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  • Ann P. Bartel

Abstract

Studies of the relationship between human resource management and establishment performance have heretofore focused on the manufacturing sector. Using a unique longitudinal dataset collected through site visits to branch operations of a large bank, the author extends that research to the service sector. Because branch managers had considerable discretion in managing their operations and employees, the HRM environment could vary greatly across branches and over time. Site visits provided specific examples of managerial practices that affected branch performance. An analysis of responses to the bank's employee attitude survey that controls for unobserved branch and manager characteristics shows a positive relationship between branch performance and employees' satisfaction with the quality of performance evaluation, feedback, and recognition at the branch—the “incentives†dimension of a high-performance work system. In some fixed effects specifications, satisfaction with the quality of communications at the branch was also important.

Suggested Citation

  • Ann P. Bartel, 2004. "Human Resource Management and Organizational Performance: Evidence from Retail Banking," ILR Review, Cornell University, ILR School, vol. 57(2), pages 181-203, January.
    • Handle: RePEc:sae:ilrrev:v:57:y:2004:i:2:p:181-203
    DOI: 10.1177/001979390405700202
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    References listed on IDEAS

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    1. Casey Ichniowski & Kathryn Shaw, 2004. "Using "Insider Econometrics" to Study Productivity," American Economic Review, American Economic Association, vol. 94(2), pages 217-223, May.
    2. Abdul Raziq, Retha Wiesner, 2016. "High Performance Management Practices and Sustainability of SMEs. Evidence from Manufacturing and Services-based Industries in Pakistan," Journal of Management Sciences, Geist Science, Iqra University, Faculty of Business Administration, vol. 3(2), pages 83-107, October.
    3. Brent Boning & Casey Ichniowski & Kathryn Shaw, 2007. "Opportunity Counts: Teams and the Effectiveness of Production Incentives," Journal of Labor Economics, University of Chicago Press, vol. 25(4), pages 613-650.
    4. Sinan Aral & Erik Brynjolfsson & Lynn Wu, 2012. "Three-Way Complementarities: Performance Pay, Human Resource Analytics, and Information Technology," Management Science, INFORMS, vol. 58(5), pages 913-931, May.
    5. Laurent Gobillon & Dominique Meurs & Sébastien Roux, 2015. "Estimating Gender Differences in Access to Jobs," Journal of Labor Economics, University of Chicago Press, vol. 33(2), pages 317-363.
    6. Kiu-Sik Bae & Hiroyuki Chuma & Takao Kato & Dong-Bae Kim & Isao Ohashi, 2011. "High Performance Work Practices and Employee Voice: A Comparison of Japanese and Korean Workers," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 50(1), pages 1-29, January.
    7. Bogaard, Hein & Svejnar, Jan, 2018. "Incentive pay and performance: Insider econometrics in a multi-unit firm," Labour Economics, Elsevier, vol. 54(C), pages 100-115.
    8. Derek C. Jones & Takao Kato, 2011. "The Impact of Teams on Output, Quality, and Downtime: An Empirical Analysis Using Individual Panel Data," ILR Review, Cornell University, ILR School, vol. 64(2), pages 215-240, January.
    9. Tasawar Nawaz, 2019. "Exploring the Nexus Between Human Capital, Corporate Governance and Performance: Evidence from Islamic Banks," Journal of Business Ethics, Springer, vol. 157(2), pages 567-587, June.
    10. Rosemary Batt & Hiroatsu Nohara & Hyunji Kwon, 2010. "Employer Strategies and Wages in New Service Activities: A Comparison of Co‐ordinated and Liberal Market Economies," British Journal of Industrial Relations, London School of Economics, vol. 48(2), pages 400-435, June.
    11. Shaw, Kathryn, 2009. "Insider econometrics: A roadmap with stops along the way," Labour Economics, Elsevier, vol. 16(6), pages 607-617, December.
    12. Paul Osterman, 2006. "The Wage Effects of High Performance Work Organization in Manufacturing," ILR Review, Cornell University, ILR School, vol. 59(2), pages 187-204, January.
    13. Ann Bartel & Richard Freeman & Casey Ichniowski & Morris M. Kleiner, 2003. "Can a Work Organization Have an Attitude Problem? The Impact of Workplaces on Employee Attitudes and Economic Outcomes," NBER Working Papers 9987, National Bureau of Economic Research, Inc.
    14. Iskandar Muda, 2014. "Human Resources Development and Performance of Government Provincial Employees: A Study in North Sumatera, Indonesia," Journal of Economics and Behavioral Studies, AMH International, vol. 6(2), pages 152-162.
    15. Bill Harley & Belinda C. Allen & Leisa D. Sargent, 2007. "High Performance Work Systems and Employee Experience of Work in the Service Sector: The Case of Aged Care," British Journal of Industrial Relations, London School of Economics, vol. 45(3), pages 607-633, September.
    16. José Manuel Lasierra & José Alberto Molina & Raquel Ortega, 2016. "How does work management improve job satisfaction? Evidence from Spain," Economics Bulletin, AccessEcon, vol. 36(2), pages 1202-1213.
    17. Siebert, W. Stanley & Zubanov, Nick & Chevalier, Arnaud & Viitanen, Tarja, 2006. "Labour Turnover and Labour Productivity in a Retail Organization," IZA Discussion Papers 2322, Institute of Labor Economics (IZA).
    18. Chen, Shi & Lin, Ku-Jun, 2015. "Technology choice and bank performance with government capital injection under deposit insurance fund protection," International Review of Economics & Finance, Elsevier, vol. 39(C), pages 162-174.

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