This variable is also not statistically different

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This variable is also not statistically different from zero, with the exception of the benefits administration equation. Again, therefore, strategy—or at least these measures—seems not related to HRM expenditures across firms. The third strategy-related question con- cerns the major performance criterion on which the HRM function is evaluated. This variable may also reflect the employee rela- tions philosophy of the firm and its top management. If the performance goal is cost-containment, for example, we hypothe- size that less is spent on per capita HRM whereas if it is employee morale and satisfac- tion, then a larger amount is spent. To test this, we enter a dummy variable for those respondents who chose the criterion goal “employee morale and satisfaction.” 29 Our hypothesis is broadly supported. The perfor- mance variable has statistical significance of varying degrees in six regressions, including the Total Expenditure equation. Interest- ingly, the coefficient is negative and signifi- cant in the Compensation sub-function regression. This result may be a statistical quirk; alternatively, it is congruent with the prediction of satisfaction/hygiene theory that firms find non-wage measures to be a more effective means to boost morale and satisfaction. The next variable drawn from the BNA survey is the percentage of employees in the reporting unit represented by a union. It is not statistically different from zero in all ten regressions, indicating that in this data set per capita expenditure on HRM does not 29 The question in the BNA survey allows respondents to circle two of the five possible answers; thus using a set of (say) four categorical dummy variables is precluded since some observations take more than one value. The results for all three strategy variables are problematic to the extent that the firm’s HRM expenditure level influ- enced the survey respondent’s choice in answering the firm’s strategic involvement level. show discernible variation with respect to union status. 30 One could well expect that for the Employee Relations and Safety and Health sub-functions this variable would be positive, which it is in both cases, but not sig- nificantly so. The survey also categorized firms into different broad industries/sectors: manu- facturing, non-manufacturing or service, government, and non-profit. We treated manufacturing as the excluded category and created dummy variables for the other three. In the aggregate HRM equation, per capita HRM expenditures are lower in services (rel- ative to manufacturing) and, using a ten- percent significance test, also lower in the government sector but not in the non-profit sector. At the sub-function level, per capita expenditure on Compensation and Benefits Administration is lower in Service sector firms and, for Compensation, also lower in non-profit firms (p .10). Recruitment ex- penditure per employee is higher in non- profit firms (p .10), however.
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