7 effects on enterprise performance most available

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7Effects on Enterprise PerformanceMost available studies (see Box5) show that the best productivity and businessimprovement results are achieved when good workplace (decent work) practicesare applied in a consistent and integrated manner and when they are used in148N. Hirsig et al.Sustainability and Human Resource Management : Developing Sustainable Business Organizations, edited by Ina Ehnert, et al.,Springer, 2013. ProQuest Ebook Central, .Created from uts on 2020-04-09 01:37:04.Copyright © 2013. Springer. All rights reserved.
“bundles” of mutually supportive and re-enforcing practices. Individually applied,their effectiveness may be limited or even be counter-productive. Also, theireffectiveness is dependent on and contingent to the enterprise’s culture, historyand current situation. While properly applied, these practices have been found tolead to better enterprise performance (see Box5).Box 5 HRM and Enterprise PerformanceA study of 138 South Korean firms (40 locally owned, 41 subsidiaries andjoint ventures of American firms, 42 European subsidiaries and joint venturesand 15 Japanese subsidiaries and joint ventures) conducted by Bae andLawler (2000) found that strong positive links exist between high involve-ment HRMstrategies (high employee participation, extensive trainingprogramme and broad job design) and firms’ competitive advantage (productdifferentiation and speed) as well as over-all business performance (Returnon Invested Capital).Comparing the performance of 58 companies identified as the bestcompanies to work for in the USA and 85 companies belonging to theStandard and Poor’s top 100 companies, Lau and May (1998) found statisticalevidence of the win-win hypothesis: companies supporting a high quality ofwork life for employees can also enjoy exceptional growth and profitability.Their findings suggest that a proper alignment of management philosophy,business strategy, and human resource policies can actually benefit all keystakeholders of the enterprise. The findings of this study was furthersupported by the findings of a follow-up study conducted by May, Lau andJohnson (1999).Vandenberg et al. (1999), in a study involving 3,570 employees of 49 lifeinsurance companies found that quality job (characterized by good job designthat makes jobs more meaningful, provides employee with control to adapt tochanging environment, provides adequate feedback, and incentive schemes atdifferent levels, training opportunities, information sharing, and flexibility toprovide balance between job and family requirements) is positively related tothe Return on Equity.Usingdatafrom968firmsdrawnfrom12,000publiclyheldUScompanies, Huselid (1995) found a strong correlation between high perfor-mance work practices (practices that builds employees’ knowledge, skills andabilities,participation,informationsharing,rewardsandcompensationsystems thatrecognize andrewardperformance,etc.)anddeclineinemployee turnover, productivity and corporate financial performance. Thereturns on investments in high performance working practices were substan-

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Human Resource Management, The Land, Sustainable Work Systems, Sustainable Business Organizations

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