High Performance Workplace Practices (HPWPs) are rapidly spreading throughout the world. The key factor inhibiting deeper understanding of theoretical advances concerning the nature and effects of HRPs is the extraordinary difficulty in obtaining appropriate data. By generating the right data and applying appropriate econometric methods, this project will contribute important findings and new data of interest to many researchers including economists in the fields of insider econometrics and personnel economics. By using large and rich data sets both for workers who remained in as well as those who left the firm during the study period, this project is able to employ unusual controls and to use appropriate econometric methods to deal with problems that often plague empirical work in this area, such as selectivity issues. Furthermore, in some instances, this project's approach may best be characterized as representing a quasi experiment. Having access to census data in some countries will enable the investigators to generalize their findings.
Already senior management in 10 firms in the U.S., Finland and China are providing the investigators with three types of extraordinary micro-data. Performance data sets usually include daily or weekly performance measures for individual workers and key organizational units (e.g. teams), cover extended periods (more than 3 years), contain multiple measures of performance (including productivity and quality), span the times both before and after major organizational innovations (such as the introduction of teams) and include all employees of the firm during the study period. Personnel data sets contain detailed individual employee records, including longitudinal disaggregated information by type of compensation. Employee survey data sets provide supplementary information both on employees' participation in HRPs and attitudinal and perceptual measures that are constructed to gauge both employee outcomes (e.g. job satisfaction and intensity of effort) and theoretical concepts, including proxies for the extent of peer pressure, discretionary effort, the extent of attention to quality, and communications. Most unusually, in some cases employee surveys will be panels-having been administered more than once to the same employees and for a period both before and after all employees were covered by a particular HRP.
In a series of "econometric case studies" these matching data will be used to test hypotheses on four sets of issues concerning the nature, determinants and effects of HRPs. The key focus is on the impact of different HRPs on business performance---especially high performance workplace practices (HPWPs, e.g. employee ownership, teams and profit sharing). Competing hypotheses on whether individual HPWPs improve levels and variability of enterprise performance and whether sets of HPWPs produce improvements in enterprise performance that exceed the effect of individual organizational changes are examined. The second set of hypotheses concern competing hypotheses as to whether individual HRPs improve employee outcomes (e.g. job satisfaction and work intensity) and whether sets of HRPs are associated with changes in employee outcomes that exceed the effect of individual organizational changes. The third set of hypotheses concern the actual channels through which firm and employee outcomes might be affected by the introduction of HRPs. Thus, financial participation (e.g. profit sharing) may lead employees to increase their co-workers performance either by enhanced peer pressure or through greater trust leading to improved cooperation. These influences may work in different directions. Also our data enable this project to study the incidence of certain HRPs within firms (e.g. what accounts for differences in individual shareholdings in firms that have employee ownership?) Finally, in all three areas the project will investigate hypotheses that exploit the uniform nature of data for cases located in very different environments. Thus the project provides evidence on hypotheses concerning predicted differences in the size of both firm and employee outcomes in differing institutional environments (such as the U.S. compared to Finland or China).
Broader Impacts: Since HRPs are assuming increasing importance, the project findings are apt to have broad implications for organizational design. Particularly novel will be evidence on offline teams and individual ownership, for outcomes including product quality and matching evidence on employee outcomes. Comparative evidence will provide useful insights concerning the potentially varying impact of HRPs across countries and sectors and hence indications as to how transferable HRPs are across diverse nations. These insights are particularly useful since the number of foreign transplants in China and other transition economies is expected to continue to rise. Finally, theoretical work concerning the nature and effects of organizational innovations is likely to benefit from our subjecting diverse hypotheses to rigorous empirical scrutiny.
