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HRM policies & worker/company performance. 1. HRM policies 2. The effect on worker performance Job satisfaction 3. The effect on company performance Ichniowski et al (1997). 1. HRM policies. HRM practices are a substitute for unionisation, offering management

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hrm policies worker company performance
HRM policies & worker/company performance
  • 1. HRM policies
  • 2. The effect on worker performance
      • Job satisfaction
  • 3. The effect on company performance
      • Ichniowski et al (1997)
1 hrm policies
1. HRM policies
  • HRM practices are a substitute for unionisation, offering management
    • ‘…the prospect of improved performance whilst simultaneously improving workers’ job satisfaction, security and perhaps pay’ (Machin & Wood, 2004).
  • ‘High performance workplace practices’
    • (a) Recruitment & selection
    • (b) Training
    • (c) Pay policies & incentives
1 hrm practices
1. HRM practices
    • (d) Non-pecuniary elements
    • (e) Unions & union agreements
    • (f) Employee involvement schemes
    • (g) Team working
  • ‘transform’ organisations into being cost-efficient and productive, whilst also increasing employee well-being (Black and Lynch, 1997)
2 the effect of hrm practices on worker performance
2. The effect of HRM practices on worker performance
  • Data
    • The Changing Employment Relationships, Employment Contracts and the Future of Work Survey (CERS)
      • Collected between July 2000 and January 2001,
      • Main aim of the Survey was to identify and describe the key changes in British employee relations.
      • Two data collection methods were used: interviews and self-completion questionnaires.
      • Sample size = 2,466, respondents = 2,349 (95% response rate)
      • Omit respondents with missing values on key variables and the self-employed (334), the sample drops to 1,518.
    • The Workplace Employment Relations Survey (WERS) contains a much larger sample of workers
      • 19,890 once we allow for missing data, - both employees and their managers.
2 the effect of hrm practices on worker performance5
2. The effect of HRM practices on worker performance
  • Methods of analysis
    • Dependent variables = 7 point likert scale
      • Completely satisified (7),……, Completely dissatisifed (1)
      • Not normal – not OLS
    • Ordered logit model
    • Descriptive statistics
slide6
Table 1 The distribution of overall job satisfaction (CERS)

Note: 10 respondents did not state their level of job satisfaction.

slide7
Table 2B The distribution of satisfaction over pay (WERS)

Note: 1.16 percent of respondents (326) did not answer the question, or answered ‘I don’t know’.

slide8
Table 3 The effect of HRM practices and perceived pay inequality on overall job satisfaction (CERS)
3 the effect of hrm practices on company performance
3. The effect of HRM practices on company performance
  • Data
    • 36 homogeneous steel production lines
      • 17 companies – visits
      • Longitudinal data – 2,190 months
      • Changes in productivity & changes in HRM practices
  • Theory
    • Engineering production function
      • Actual Qit = [f(wit. git. sit. hsit)] X (1-dit)
3 the effect of hrm practices on company performance12
3. The effect of HRM practices on company performance
  • Control variables & complementary HRM practices
    • HRM System 4 (Traditional)
      • E.g. supervision, rules, incentive pay for Q, etc.
    • HRM System 3
      • As above but also worker involvement in teams & improved communications
    • HRM System 2
      • As above but skills training & worker involvement in teams
    • HRM System 1
      • See Table 2 Ichniowski
3 fixed effects models
3. Fixed effects models
  • Why fixed effects models?
    • Uit = µHit + bXit + ai + eit
  • Results
    • Production lines using innovative HRM practices
      • substantially higher levels of productivity
    • Complemetarities in HRM practices
conclusion
Conclusion
  • HRM practices are important for worker & company performance
  • Data problems – under-researched area by economists
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