Power shifts in organizations: the role of high-performance work systems

Abstract

This paper analyses the effects of high-performance work systems (HPWS) on the rent appropriation of employees and shareholders in firms from the viewpoint of appropriation theory. Applying a meta-analytical approach I test the hypothesis that HPWS shift the balance of power between stakeholder groups in an organization, favouring employees over other stakeholders. This hypothesis is confirmed. However, the overall results of HPWS are positive for both stakeholder groups, as HPWS also increase firm value creation. My study also emphasizes the need to decompose the construct ‘firm performance’ into value creation and value distribution among stakeholder groups. Directions for future research and recommendations for management practice conclude the paper.

Keywords:

• bargaining power
• high-performance work systems
• meta-analysis
• stakeholder
• value appropriation

Notes

1. As not all studies provided the necessary information for all research models and not all studies were relevant for all models, N varies between the statistical models presented in Table 5. Model 1, for example, comprises only studies that applied employee-related or shareholder-related performance figures (N = 26).