Study title

Abstract copyright UK Data Service and data collection copyright owner.This research project investigated whether investing in 'progressive' human resources (HR) practices appears to pay dividends in terms of corporate performance for small firms in the sectors the project covered. However, the degree to which this is true, and the size and significance of the effect, will vary according to a range of factors. One of these factors is the strategy that the firm adopts. Broadly, it may be pursuing a 'high road' strategy of investing in progressive HR practices that tend to be associated with a greater degree of commitment and motivation amongst the workforce, as well as to both an increased ability and greater opportunities to work more productively. Hence such investment will tend to be associated with higher productivity and customer retention, and thus also profitability. Alternatively, the firm may choose a 'low road', cost-cutting strategy. This appears to be especially so for 'older' small companies, who may turn to this approach as a 'strategy of last resort'. The effectiveness of HR policies and practices, therefore, will depend, in part at least, on the strategy being pursued by the company. If a 'high road' strategy is consciously chosen, then the costs of investing in HR practices can be expected to be recouped through improved performance. However, in order to achieve this, HR practices need to improve commitment and motivation amongst staff, enhance skills, and provide opportunities to use them to increase productivity. For this to happen, HR practices should be introduced and implemented coherently, alongside appropriate organisational design. The dataset produced by the project included a firm-level survey, and four case studies, for which a questionnaire from the Workplace Employee Relations Survey, 1998 (held at the UK Data Archive (UKDA) under SN 3955) was used. See documentation for further details of methodology. Main Topics:Topics...