High-involvement management practices and the productivity of firms: Detecting industry heterogeneity

Laura Peutere,Petri Böckerman,Antti Saloniemi,Tapio Nummi,Simo Aho,Jouko Nätti

doi:10.1177/0143831x20961155

Abstract

The aim of this article is to clarify the links between high-involvement management (HIM) practices, productivity and branches of industry. The data combine a representative survey ( N = 787) of private-sector firms in Finland and register-based firm-level data on sales per employee in the year following the survey. The authors analysed the data using mixture regression and identified two clusters in the association between HIM and productivity. In one cluster, high-involvement management and productivity were positively associated, while in the other cluster, the association was negative. The association between the intensity of HIM utilisation and productivity is not always additive; the benefits of HIM were most prominent in industries where HIM was most seldom utilised. This paradox was most notable in the service sector.

Highlights

Since around the mid-1990s, different articulations of high-performance paradigms have represented the modern style of organising work
According to a meta-analysis, differences in the various human resource management (HRM) practices explain the effects on performance less than the context in which they are carried out (Tzabbar et al, 2017)
The basic aim of this study is to investigate how the utilisation of high-involvement management (HIM) and its association with productivity varies by industry

Summary

Introduction

Since around the mid-1990s, different articulations of high-performance paradigms have represented the modern style of organising work. In contrast to Fordist principles, these paradigms involve workers effectively using their skills, independently solving production problems, and simultaneously continuously developing their skills. Mainstream research literature confirms the positive link between participatory human resource practices and productivity The whole mechanism through which the high-performance principles enhance productivity is not clear cut or without contradictions (Chi and Lin, 2011; Guest et al, 2003). According to a meta-analysis, differences in the various human resource management (HRM) practices explain the effects on performance less than the context in which they are carried out (Tzabbar et al, 2017)

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