THE IMPACT OF HUMAN RESOURCE AND OPERATIONAL MANAGEMENT PRACTICES ON COMPANY PRODUCTIVITY: A LONGITUDINAL STUDY

TLDR

Strategic human resource management emphasizes psychology‑based practices such as empowerment, training, and teamwork as key drivers of competitive advantage, while operational initiatives like integrated manufacturing, lean production, total quality management, just‑in‑time, advanced technology, and supply‑chain partnering are also considered determinants of organizational performance. The study examined the relative merits of seven human resource and operational practices on the productivity of 308 companies over 22 years. The authors analyzed productivity data from 308 companies over 22 years, tracking the implementation of up to seven practices. Empowerment and extensive training improved productivity, with teamwork further enhancing these effects, whereas none of the operational practices showed a direct or consistent interaction with productivity.

Abstract

Within the strategic human resource management (SHRM) perspective, psychology‐based practices, especially empowerment, extensive training, and teamwork, are seen as vital to sustained competitive advantage. Other approaches, such as those of integrated manufacturing and lean production, place greater emphasis on operational initiatives such as total quality management, just‐in‐time, advanced manufacturing technology, and supply‐chain partnering as determinants of organizational performance. We investigated the relative merits of these practices through a study of the productivity of 308 companies over 22 years, during which time they implemented some or all of these 7 practices. Consistent with SHRM theory we found performance benefits from empowerment and extensive training, with the adoption of teamwork serving to enhance both. In contrast, none of the operational practices were directly related to productivity nor did they interact with other practices in ways fully consistent with the notions of integrated manufacturing or lean production.