Management capability and high performance work organization

Abstract

Building upon the resource-based view of the firm and the managerial rents model, we explore role played by two forms of management capability (‘general’ and ‘HR specific’) in the use of high performance work organization (HPWO) practices and their impact on performance.

A nationally representative establishment-level survey of organizational practices conducted in 1999 and 2002 in a single industry found that both forms of management capability were associated with the use of HPWO practices in 1999 but this association did not hold for the use of HPWO practices in 2002. There was a strong and positive relationship between the use of HPWO practices in 1999 and subsequent value-added per employee in 2002. HR-specific management capability did not moderate the relationship between HPWO practices in 1999 and value-added per employee in 2002. Contrary to expectations we found high levels of value-added per employee where the use of HPWO practices was high but our measure of general management resources was low.

Keywords:

• High performance work
• management capability
• human resource practices
• value-added per employee
• managerial rents
• aerospace

Notes

 1 Osterman (2000), contrary to many other studies, noted a ‘rapid diffusion’ of certain high performance practices in two surveys conducted in 1992 and 1997.

 2 Respondents were asked to give their job title when completing the questionnaire.

 3 It is important to distinguish between ‘firms’ and ‘establishments’. A firm may be comprised of several establishments (or ‘facilities’ as they are more generally termed in the US) whereas an establishment will always be a single, specific geographical location. Establishments do not generally report profit and loss figures.