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Bus 159 Presentation: Effectiveness Implications of Strategic HRM. Dr. Stan Malos SJSU College of Business. Article Presented High-Involvement Management and Workforce Reduction: Competitive Advantage or Disadvantage?. Zatzick & Iverson, Simon Frazer Univ. Academy of Management Journal
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Bus 159 Presentation:Effectiveness Implications of Strategic HRM Dr. Stan Malos SJSU College of Business
Article PresentedHigh-Involvement Management and Workforce Reduction: Competitive Advantage or Disadvantage? Zatzick & Iverson, Simon Frazer Univ. Academy of Management Journal October, 2006
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?
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
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
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
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
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
Results: Support for the hypothesized relationships—Hierarchical 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 Figures—hard copy]
Take-home message: Practical implications for Strategic Human Resource Management RIFs may cut short-term costs but also reduce productivity and overall performance If RIFs do become necessary, consider unit-level retention to maintain work group synergies and other benefits of HIMPs Don’t 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