The Impact of Hrm Polices on Turnover and Productivity
© Academy of Management Journal 1995, Vol. 38, No. 3, 635–872.
THE IMPACT OF HUMAN RESOURCE MANAGEMENT PRACTICES ON TURNOVER, PRODUCTIVITY, AND CORPORATE FINANCIAL PERFORMANCE
MARK A. HUSELID Rutgers University
This study comprehensively evaluated the links between systems of High Performance Work Practices and firm performance. Results based on a national sample of nearly one thousand firms indicate that these practices have an economically and statistically significant impact on both intermediate employee outcomes (turnover and productivity) and short- and long-term measures of corporate financial performance. Support for predictions that the impact of High Performance Work Practices on firm performance is in part contingent on their interrelationships and links with competitive strategy was limited.
The impact of human resource management (HRM) policies and practices on firm performance is an important topic in the fields of human resource management, industrial relations, and industrial and organizational psychology (Boudreau, 1991; Jones & Wright, 1992; Kleiner, 1990). An increasing body of work contains the argument that the use of High Performance Work Practices, including comprehensive employee recruitment and selection procedures, incentive compensation and performance management systems, and extensive employee involvement and training, can improve the knowledge, skills, and abilities of a firm’s current and potential employees, increase their motivation, reduce shirking, and enhance retention of quality employees while encouraging nonperformers to leave the firm (Jones & Wright, 1992; U.S. Department of Labor, 1993). I am very grateful to Brian Becker for his many helpful comments on this article and for his direction and guidance on the dissertation on which it is based. I would also like to thank James Begin, Peter Cappelli, James Chelius, John Delaney, Steve Director, Jeffrey Keefe, Morris Kleiner, Douglas Kruse, Casey Ichniowski, David Levine,
THE IMPACT OF HUMAN RESOURCE MANAGEMENT PRACTICES ON TURNOVER, PRODUCTIVITY, AND CORPORATE FINANCIAL PERFORMANCE
MARK A. HUSELID Rutgers University
This study comprehensively evaluated the links between systems of High Performance Work Practices and firm performance. Results based on a national sample of nearly one thousand firms indicate that these practices have an economically and statistically significant impact on both intermediate employee outcomes (turnover and productivity) and short- and long-term measures of corporate financial performance. Support for predictions that the impact of High Performance Work Practices on firm performance is in part contingent on their interrelationships and links with competitive strategy was limited.
The impact of human resource management (HRM) policies and practices on firm performance is an important topic in the fields of human resource management, industrial relations, and industrial and organizational psychology (Boudreau, 1991; Jones & Wright, 1992; Kleiner, 1990). An increasing body of work contains the argument that the use of High Performance Work Practices, including comprehensive employee recruitment and selection procedures, incentive compensation and performance management systems, and extensive employee involvement and training, can improve the knowledge, skills, and abilities of a firm’s current and potential employees, increase their motivation, reduce shirking, and enhance retention of quality employees while encouraging nonperformers to leave the firm (Jones & Wright, 1992; U.S. Department of Labor, 1993). I am very grateful to Brian Becker for his many helpful comments on this article and for his direction and guidance on the dissertation on which it is based. I would also like to thank James Begin, Peter Cappelli, James Chelius, John Delaney, Steve Director, Jeffrey Keefe, Morris Kleiner, Douglas Kruse, Casey Ichniowski, David Levine,
References: a Adapted from Devanna, Fombrun, Tichy, and Warren (1982).