Effects of Human Resource Systems on Manufacturing Performance and Turnover
* Academy o/ Managetnenl Journal 1994, Vol. 37. No. 3. 670-687.
EFFECTS OF HUMAN RESOURCE SYSTEMS ON MANUFACTURING PERFORMANCE AND TURNOVER
JEFFREY B. ARTHUR Purdue University
Using an empirical taxonomy identifying two types of human resource systems, "control" and "commitmeni," this study tested the strategic human resource proposition that specific combinations of policies and practices are useful in predicting differences in performance and turnover across steel "minimills." The mills with commitment systems had higher productivity, lower scrap rates, and lower employee turnover than those with control systems. In addition, human resource system moderated the relationship between turnover and manufacturing performance.
Long a concern among organizational contingency theory researchers, the concept of the congruence, or fit, between diverse sets of organizational policies and practices has recently emerged as an important subject of study for human resources management researchers. This new strategic, macro, human resource management perspective differs markedly from the more traditional approach focusing on the effects of separate human resource practices on individual-level outcomes (Butler, Ferris, & Napier, 1991; Jackson, Schuler, & Rivero, 1989; Mahoney & Deckup, 1986; Snell, 1992). In contrast, the strategic human resource management perspective integrates macro-level theories and concepts to explore the impact of specific configurations, or systems, of human resource activities on organization-level performance outcomes (Dyer & Holder, 1988; Fisher, 1989; Wright & McMahan, 1992). Dohbins, Cardy, and Carson pointed out that although a macro approach to studying human resource issues appears promising and conceptually very rich, "the validity of its propositions is ultimately an empirical question" (1991: 33). Empirical evidence demonstrating the predictive value of the strategic human resource perspective, however, has not heen forthcoming.
EFFECTS OF HUMAN RESOURCE SYSTEMS ON MANUFACTURING PERFORMANCE AND TURNOVER
JEFFREY B. ARTHUR Purdue University
Using an empirical taxonomy identifying two types of human resource systems, "control" and "commitmeni," this study tested the strategic human resource proposition that specific combinations of policies and practices are useful in predicting differences in performance and turnover across steel "minimills." The mills with commitment systems had higher productivity, lower scrap rates, and lower employee turnover than those with control systems. In addition, human resource system moderated the relationship between turnover and manufacturing performance.
Long a concern among organizational contingency theory researchers, the concept of the congruence, or fit, between diverse sets of organizational policies and practices has recently emerged as an important subject of study for human resources management researchers. This new strategic, macro, human resource management perspective differs markedly from the more traditional approach focusing on the effects of separate human resource practices on individual-level outcomes (Butler, Ferris, & Napier, 1991; Jackson, Schuler, & Rivero, 1989; Mahoney & Deckup, 1986; Snell, 1992). In contrast, the strategic human resource management perspective integrates macro-level theories and concepts to explore the impact of specific configurations, or systems, of human resource activities on organization-level performance outcomes (Dyer & Holder, 1988; Fisher, 1989; Wright & McMahan, 1992). Dohbins, Cardy, and Carson pointed out that although a macro approach to studying human resource issues appears promising and conceptually very rich, "the validity of its propositions is ultimately an empirical question" (1991: 33). Empirical evidence demonstrating the predictive value of the strategic human resource perspective, however, has not heen forthcoming.
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Theoretical perspectives for strategic human resource management. Journal of Management, 18: 295-320. Jeffrey B. Arthur is an assistant professor of management at the Krannert Graduate School of Management. Purdue University. He received his Ph.D. degree in industrial relations from Cornell University. His current research interests include strategic human resource management and industrial relations patterns and transformations.