In this paper we examined factors hypothesized to facilitate and constrain the adoption of a High Performance Work Systems (HPWS). In 2,410 firms across diverse industries and three time periods we found both organizational...
moreIn this paper we examined factors hypothesized to facilitate and constrain the adoption of a High Performance Work Systems (HPWS). In 2,410 firms across diverse industries and three time periods we found both organizational characteristics and external environmental contingencies to be associated with the adoption of a HPWS. Prior conceptual work in the field of personnel and human resource (HR) management has traditionally focused on the development, implementation, and evaluation of the wide range of organizational practices associated with this function. In recent years this largely "micro" orientation has been augmented by an increasing interest in what might be called the strategic role of human resources. Unlike the early work in strategic human resources , this new literature stream is not confined to the strategic management of the HR function. Rather, greater emphasis is given to the strategic impact of human resources at the level of the firm; namely, the impact of the firm's HR strategy on overall firm performance . This trend is reflected in recent work that reframes the role of the HR function as a partner in the management of the business (Jackson & Schuler, 1995;. Within this context, firm HR strategy, whether driven by formalized HR structures or embedded within general management, is comprised of an internally consistent system of HR management (HRM) practices that is aligned with and helps to implement the firm's competitive strategy Jackson & Schuler, 1995). Reflecting recent calls for the application of meso or cross-level research methodologies , the recent empirical work in this field is expanding to embrace a more holistic or "macro" orientation as well. Rather than focusing on one HR function or practice, the level of analysis has become clusters or "bundles" of High Performance Work Practices (HPWP) . For example, Pfeffer (1994) advocates the adoption of sixteen HPWP including employment security, selectivity in recruiting, work teams, incentive compensation, and employee ownership. Similarly, Huselid (1995) describes thirteen HPWP including comprehensive employee selection and development procedures, organizational work structures that encourage employee involvement, and performance management and incentive compensation systems that align the interests of employees with those of the shareholders. Conceptually, firm efforts to develop complementarities or synergies among HRM practices, and thereafter between the HRM system and firm competitive strategy, should lead to enhanced firm performance (Jackson & Schuler, 1995;. Collectively, the adoption of an operationally appropriate HPWP comprises an organizational High Performance Work System (HPWS). In a dynamic and highly competitive marketplace, the intent of such a system is to develop a workforce with the appropriate skills and motivation and to provide an organizational structure that allows employees to influence how their roles are performed . Indeed, prior work focusing on the firm-level impact of HPWS finds substantial economic returns associated with the adoption of such systems. Arthur (1994), , Delaney (in press), ), Huselid & Becker (1995; 1996a; 1996b all found that the adoption of a HPWS to have an economically and statistically significant impact on employee turnover, productivity, or corporate financial performance. More recently, special issues devoted to this topic have appeared in the Academy of Management Journal and Industrial Relations. The impact of this work has been to amplify earlier conclusions about the importance of HRM systems in the determinants of firm performance. As the empirical evidence supporting the existence of a HPWS-firm performance relationship accumulates, the moderate rate of HPWS diffusion observed by a number of authors becomes a more salient subject for inquiry . Indeed, if HPWS are so successful economically, why haven't all firms adopted them? The literature in the field of strategic management presents one plausible explanation. For a firm's HRM system to generate sustainable competitive advantage, its organizational structures must not be easily imitated by competitors . Moreover, to the extent that different firm competitive strategies require different role behaviors from employees, we should expect that the form and structure of the HRM system to reflect these requirements . In short, while firms should have an incentive to adopt HPWS, there are likely to be sufficient barriers to implementation that we