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

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  • Casey Ichniowski

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.

Suggested Citation

  • Casey Ichniowski, 1990. "Human Resource Management Systems and the Performance of U.S. Manufacturing Businesses," NBER Working Papers 3449, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:3449
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    File URL: http://www.nber.org/papers/w3449.pdf
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    1. 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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    Cited by:

    1. Sandra E. Black & Lisa M. Lynch, 2004. "What's driving the new economy?: the benefits of workplace innovation," Economic Journal, Royal Economic Society, vol. 114(493), pages 97-116, February.
    2. Lynch, Lisa M., 2007. "The Adoption and Diffusion of Organizational Innovation: Evidence for the U.S. Economy," IZA Discussion Papers 2819, Institute for the Study of Labor (IZA).
    3. Dearden, Lorraine & Reed, Howard & Van Reenen, John, 2000. "Who Gains when Workers Train? Training and Corporate Productivity in a Panel of British Industries," CEPR Discussion Papers 2486, C.E.P.R. Discussion Papers.
    4. Sandra E. Black & Lisa M. Lynch, 2005. "Measuring Organizational Capital in the New Economy," NBER Chapters,in: Measuring Capital in the New Economy, pages 205-236 National Bureau of Economic Research, Inc.
    5. Bloom, Nicholas & Van Reenen, John, 2011. "Human Resource Management and Productivity," Handbook of Labor Economics, Elsevier.
    6. Sandra E. Black & Lisa M. Lynch, 2001. "How To Compete: The Impact Of Workplace Practices And Information Technology On Productivity," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 434-445, August.
    7. Massimiliano Mazzanti & Davide Antonioli & Susanna Mancinelli, 2011. "Are Environmental Innovations Embedded within High-Performance Organizational Changes?," Working Papers 201115, University of Ferrara, Department of Economics.
    8. Greer, Charles R. & Ireland, Timothy C. & Wingender, John R., 2001. "Contrarian human resource investments and financial performance after economic downturns," Journal of Business Research, Elsevier, vol. 52(3), pages 249-261, June.
    9. Sandra E. Black & Lisa Lynch & Anya Krivelyova, 2003. "How Workers Fare When Employers Innovate," NBER Working Papers 9569, National Bureau of Economic Research, Inc.
    10. Rosemary Batt & Eileen Appelbaum, 1995. "Worker Participation in Diverse Settings: Does the Form Affect the Outcome, and If So, Who Benefits?," British Journal of Industrial Relations, London School of Economics, vol. 33(3), pages 353-378, September.
    11. Sanchez-Runde, Carlos & Whittington, Richard & Quintanilla, Javier, 2000. "Human resource management implications of new forms of organizing," IESE Research Papers D/409, IESE Business School.
    12. John T. Addison, 2005. "THE DETERMINANTS OF FIRM PERFORMANCE: UNIONS, WORKS COUNCILS, AND EMPLOYEE INVOLVEMENT/HIGH-PERFORMANCE WORK PRACTICES," Scottish Journal of Political Economy, Scottish Economic Society, vol. 52(3), pages 406-450, July.
    13. Kochan, Thomas A., 1996. "What works at work : overview and assessment," Working papers 3886-96., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    14. PĂ©rez, Jessica Helen & Iranzo Sancho, Susana, 2012. "Determinants of Decentralization within the Firm: Some Empirical Evidence from Spanish Small and Medium- Sized Enterprise," Working Papers 2072/211755, Universitat Rovira i Virgili, Department of Economics.
    15. Jaren Haber, 2016. "Institutionalized Involvement: Teams and Stress in 1990s U.S. Steel," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(4), pages 632-661, October.
    16. Jed Devaro & Fidan Ana Kurtulus, 2011. "What types of organizations benefit from teams, and how do they benefit?," UMASS Amherst Economics Working Papers 2011-16, University of Massachusetts Amherst, Department of Economics.
    17. Addison, John T., 2005. "The Determinants of Firm Performance: Unions, Works Councils, and Employee Involvement/High Performance Work Practices," IZA Discussion Papers 1620, Institute for the Study of Labor (IZA).
    18. Cristini, Annalisa & Pozzoli, Dario, 2008. "New Workplace Practices and Firm Performance: A Comparative Study of Italy and Britain," Working Papers 08-9, University of Aarhus, Aarhus School of Business, Department of Economics.
    19. repec:gam:jsusta:v:9:y:2017:i:10:p:1883-:d:115599 is not listed on IDEAS
    20. Keun Lee & Tsutomu Miyagawa & Shigesaburo Kabe & Junhyup Lee & Hyoungjin Kim & Young Gak Kim, 2009. "Management Practices and Firm Performance in Japanese and Korean Firms," Microeconomics Working Papers 22990, East Asian Bureau of Economic Research.

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