Bus 159 Presentation: Effectiveness Implications of Strategic HRM

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Bus 159 PresentationEffectiveness Implications
of Strategic HRM

• Dr. Stan Malos
• SJSU College of Business

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Article Presented High-Involvement Management
and Workforce Reduction Competitive Advantage or
Disadvantage?

• Zatzick Iverson, Simon Frazer Univ.
• Academy of Management Journal
• October, 2006

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Overview of Article

• -What are High-Involvement Management
  Practices HIMPs in the Strategic HRM context?
• -How can HIMPs impact Productivity or otherwise
  offer a source of Strategic Competitive
  Advantage?
• -How is the relationship between HIMPs and
  Productivity affected by Workforce Reductions?
• -What are the corresponding practical
  implications for Strategic Human Resource
  Management?

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What are High-Involvement Management Practices
HIMPs in the Strategic HRM context?

• -HIMPs Systems of management practices giving
  employees skills, information, motivation, and
  latitude
• -Examples Team-based training and incentives,
  flexible job design, and information sharing to
  facilitate effective interaction and improve
  productivity

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How can HIMPs impact Productivity or otherwise
offer a Strategic Competitive Advantage?

• -By generating and sustaining firm-specific human
  capital development
• -By developing dynamic capabilities to integrate,
  build, and reconfigure internal and external
  competencies based on that firm-specific human
  capital

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How is the relationship between HIMPs and
Productivity affected by Workforce Reductions?

• -Layoffs and other workforce reductions can be
  perceived as psychological contract violations
  that decrease motivation and commitment
• -Loss of firm-specific human capital and
  high-involvement competencies undercut gains
  otherwise realized through HIMPs

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Hypotheses

• H1 Layoffs moderate the relationship between
  HIMPs and productivity (i.e., more extensive
  HIMPs will relate to greater productivity losses
  from RIFs)
• H2 Continued investments in HIMPs after RIFs
  will lessen these effects

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Methods How this study was conducted

• -Archival survey data from Canadian government
  labor statistics used to assess Productivity,
  HIMPs, and layoffs
• -Productivity measured as log of revenues minus
  expenditures per employee
• -HIMP intensity measured as extent of flexible
  job design, problem-solving teams, self-directed
  work groups, training, employee information
  sharing, and gainsharing

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Results Support for the hypothesized
relationshipsHierarchical Regression Results

• H1 Layoff rates negatively related to
  productivity as predicted
• H2 Interactions indicate effects are less when
  HIMPs are continued after RIFs
• see Table 2 and Interaction Figureshard copy

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Take-home message Practical implications for
Strategic Human Resource Management

1. RIFs may cut short-term costs but also reduce
   productivity and overall performance
2. If RIFs do become necessary, consider unit-level
   retention to maintain work group synergies and
   other benefits of HIMPs
3. Dont give up on HIMPs after RIFs added training
   and investment in human capital development may
   be needed to reassure layoff survivors and
   reinstate motivation, commitment, and related
   productivity gains

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Questions?