Commitment to employees, labor intensity, and labor productivity in small firms

Abstract

PurposeThe purpose of this study is to analyze the potential existence of a concave downward curve between organizational commitment to employees (OCE) and labor productivity in small firms. It also aims to examine the moderating effects of labor intensity on this curvilinear relationship.Design/methodology/approachThe paper uses a sample of 819 manufacturing small firms from the Spanish Ministry of Industry and Energy's Survey on Business Strategies, and applies hierarchical regression analysis to test its hypotheses.FindingsThe results support a non‐linear association between OCE investments and labor productivity: the higher the level of OCE, the lower its positive impact on organizational outcomes will be. The results also support the contingent view of strategic human resource management, so that an investment in OCE is more effective in some contexts than in others.Practical implicationsThe paper concludes that managers and investors should be aware of the fact that investments in OCE are not always correspondingly beneficial. In the small firm setting, not all firms with large profits apply OCE. A high level of OCE investment may be counterproductive.Originality/valueThe strategic human resource management literature usually assumes a linear relationship between OCE and organizational outcomes; very few empirical studies have considered a nonlinear approach.