paper 1: comparative growth (gilman & raby)

3rd July, IPM ‘10, Kent, UK

National context as a predictor of HPWS effectiveness in SMEs:

A British-French comparative study

Dr Mark Gilman & Simon Raby

Introduction

• Literature

• HRM & Performance

• HPWS & small firms

• HPWS across borders

• Method & results

• Distribution & level of HPWP adoption by country

• Correlation between HPWP adoption & country

• Discussion, conclusion and further research

HRM & Performance

• HRM & Performance!

• Burgeoning range of empirical works on the performance enhancing effects of HRM.

• High Performance Work Systems (HPWS) emphasise the integration of strategy, innovation, technology, flexibility and HRM

• Large firm theory....application at a small firm level?!?

HPWS & Small Firms

• On the one hand it is believed that they….

• avoid the complex employment relations issues and conflicts inherent in larger firms, and

• are more innovative, informal, flexible and in touch with their employees.

• However…. the key is in their ability to understand the sources of sustained competitive advantage:

• Developing HRM practice,

• Linking to wider business issues.

HPWS Across Borders

• Institutional setting plays an important role in the way firms behave

• Debates revolve around whether HR practices are converging or diverging and what the key forces at play - contextual, institutional or organisational?

• Significant differences between British and French historical, religious, educational and political backgrounds….

Method

• Comparative investigation into the incidence, nature and performance enhancing effects of HPWS in small firms.

• Dataset of 351 British and French small firms.

• Survey included a wide range of growth related variables including; firm strategies, HR practices, communications mechanisms, training and skills methods and performance measurement systems.

• The analyses uses 38 work practices within 3 HPWS bundles: High Involvement Practices, Human Resource Practices and Reward & Commitment Practices.

Background

• Small (<50 employees)

• Representative of main industry sectors

• High levels of family-ownership

• Age – relatively mature

• Under intense competition

• Business strategy

• Price/quality strategy

• HR expertise

• Management qualifications

Level of adoption

• Low level of HPWS adoption…..

Correlation: HPWP by country

High Involvement Practices

• British: No variables discriminate British firms….

• French: Quality circles, teamwork and team briefings, sharing info, communication & problem solving skills development, culture/change programmes, process innovation (importance of).

Emphasis on strategic route to process improvement and innovation.

Correlation: HPWP by country

Human Resource Practices

• British: Formal recruitment & selection, selection testing, induction, appraisal, equipment operations skills, harmonised conditions, strategic skill development and quality improvement.

Use of a set of common HR practices, task focussed skill development, skills dev and quality integrated to strategy.

• French: Strategic employment practices, Quality management system (ISO 9000), quality control skills.

Quality related skill dev and accreditation, employment policies & practices integrated to strategy.

Correlation: HPWP by country

Reward & Commitment Practices

• British: Employee share options (ESOPs), labour turnover & absenteeism records.

Less emphasis on employee relations practices that engender high levels of commitment, high level assessments of employee satisfaction.

• French: Job satisfaction, internal promotion, job security, formal pay system, performance related pay.

Reinforcing the importance of motivation, job security and internal development.

Correlation: HPWP by country

Other contextual variables

• British: Reliability/time mgt training, health & safety training, customer service training, email communication, communication through managers, skills development (importance of), long working hours.

Reinforces importance of skills dev, but compounds notion that largely statutory or task related, communication on individual level, long working hours.

• French: Productivity records, business strategy, exports.

Reinforces quality and strategic emphasis.

Discussion & conclusion

• Few SMEs possess a comprehensive set of HPWPs – HRM potentiality?

• British firms appeared to be more inclined to experiment with a wider range of practices – government's more liberal approach?

• French firms appeared to adopt a narrower approach – strict regulatory environment?

Discussion & conclusion

• French SMEs more likely to reflect an integrated orientation towards quality & productivity-related practices

• British SMEs displayed a tendency to focus on discrete practices

• Intentional and rational? Strategic?

• Imitation of large firms in response to national government ‘best practice’?

Discussion & conclusion

• This research does not identify any evidence of the presence of a HPWS in small firms…. And there isn’t even evidence of a set of comprehensive HR practices…..

• Given that there seems to be a relationship between HR practices and performance….and the national differences highlighted on the previous slide….national policy effects?

• This research raises need for greater understanding of processes, etc. through more detailed qualitative research.

• Our future work will take a more qualitative stance and will aim to better understand the nature of HRM in small firms, and….

• What this means for HRM theory(s)?

• Major implications for policy....

Thank you for listening!!