Human Resource Management, Strategy and Operational Performance in the Spanish Manufacturing Industry

Abstract

In recent years companies have begun to implement a series of human resource management (HRM) practices that are referred to in the literature as high-performance or high-commitment. Among others these practices include employee involvement, training and organisational incentive plans. In this study we attempt to determine how and to what extent the adoption of this type of practices affects the firm’s performance record. We focus specifically on the impact HRM has on operational performance. Moreover, we test if the impact of highcommitment practices on firm performance is contingent on the strategy followed by the firm. We try to detect possible differences in the relationship between HRM and the different kinds of operational results (efficiency, quality, and time). For this aim we use a database covering an initial sample of 965 factories each with a workforce of over 50 employees. We begin with a review of the literature before going on to present the descriptive statistics for the variables to be used and, finally, testing the relationship between HRM and operational performance through the estimation of several ordered probit models. Our results reveal the presence of a positive, statistically significant correlation between the adoption of high-commitment practices and improvements in quality and time-based performance. We also find that this effect is universal and not dependent on the strategy used by the firm.