Research summary: This article replicates and extends Welbourne and Cyr's (1999) pioneering study of the relationship between the presence of human resource executives (HREs) and firm performance in ...initial public offering (IPO) firms. We employ a larger, more generalizable sample, a model better fitted to the IPO context, and alternative performance measures to execute a more robust examination of this relationship. Using Welbourne and Cyr's model specifications, our results parallel theirs: there is no significant relationship between HREs and firms' post-IPO financial performance. Moreover, extending Welbourne and Cyr's study, we find that the presence of HREs at the time of firms' IPOs is positively related to the ultimate success measure: post-IPO firm survival. Additionally, for firms that had executives at the time of IPO, the negative effect of firm size on firm mortality is greater and the positive effect of leverage on firm mortality is smaller. Managerial summary: Does paying attention to HRM help firms to succeed? This study examines that question in a sample of generally small, young firms that went public from 1996 to 2008. Only about 10 percent of these firms had human resource executives (HREs) at the time of their IPOs, allowing us to examine the effects of the presence of HREs on firm performance. While we find that the presence of an HRE at IPO is not related to firms' post-IPO financial performance, firms that had HREs at IPO are significantly more likely to survive in the long run. Since approximately 20 percent of the sample firms do not survive, this is a very meaningful outcome. Indeed, survival may be the ultimate measure of firm performance.
This study provides an empirical examination of the relationship between organizational investments directed toward the human resource (HR) function and a key performance outcome - labor ...productivity. Utilizing a multiple constituency perspective of the HR function, we proposed that organizational investments of financial resources into their HR functions will influence labor productivity; and that the availability of professional HR staff and implementation of high performance work systems will moderate this relationship. Utilizing a sample of 475 organizations drawn from multiple locations and sectors in the United States, we found that HR function investments predicted labor productivity, and the proportion of HR staff occupying professional/technical roles moderated (enhanced) the HR function investment-labor productivity relationship. However, the HR function investment-productivity relationship was found to be stronger in organizations with low (as opposed to high) levels of high performance work systems. We discuss these findings within the context of increasing demand on the HR function to demonstrate returns on investments.
As employee downsizing has become increasingly ubiquitous in recent years, the study of this phenomenon has assumed greater significance. This article develops an integrative framework that ...incorporates environmental and organizational antecedents as well as the implications of downsizing for individuals and organizations. Key empirical studies are reviewed and major patterns and contradictions are identified. The authors identify and discuss theoretical and methodological concerns related to the extant literature and provide recommendations for future research aimed at developing a better understanding of employee downsizing.
Prior research shows that family control affects firm value through capital investment, debt financing, M&A activities, and governance structure. This study investigates the role of corporate culture ...in family firms and its implications for firm value. We use more than 100,000 surveys collected by Glassdoor between 2008 and 2012 that capture how employees perceive their company's culture. We find that employees who work for firms with active founders rate their companies higher than employees in nonfamily firms, especially if the founder runs the company. In contrast, employee satisfaction in scion firms does not differ from nonfamily firms, and when scions run the company, employees are less satisfied. Scion firms also exhibit significant lower employee satisfaction during the recent financial crisis. Furthermore, employee assessments predict subsequent firm performance measured by Tobin's q and return on assets (ROA). Our findings provide evidence that family firms exhibit a human-capital-enhancing culture that improves firm performance.
•We use survey data to capture how employees perceive their company's culture.•The data includes more than 100,000 surveys between 2008 and 2012.•Employees who work for firms with active founders rate their companies higher.•Employees are less satisfied in companies run by heirs.•Employee assessments predict firm performance measured by Tobin's q and ROA.
Study results indicate a positive association between use of high-involvement work practices and employee retention and firm productivity. A disordinal interaction was indicated: employee turnover ...was associated with decreased productivity when use of high-involvement work practices was high and with increased productivity when use of these practices was low.
To operationalize the extent to which firms place a strategic emphasis on human capital and human resource management (HRM), we draw on the strategy field's dominant logic theory and on the emerging ...literature on executive compensation for the heads of major firm functions, such as HRM. Specifically, we investigate whether the pay of human resource executives (HREs) relative to other members of top management teams (TMTs) is related to firm performance. After controlling for the endogeneity of HRE status as one of the highest paid executives on the TMT, we find in a comprehensive sample of the largest US firms that HRE relative pay is positively related to firm financial performance, specifically Tobin's Q. We also find that the relationship of HRE relative pay with Tobin's Q is stronger in relatively smaller and younger firms in our sample. The findings suggest that a strategic emphasis on human capital and HRM leads to higher firm value.
Relative to the large body of work in the broader strategic HRM (SHRM) literature, knowledge about determinants of SMEs' approaches to HRM remains limited. We argue that heterogeneity in the use of ...high performance work practices (HPWPs) is influenced by top managers' exposure and attention to information obtained via environmental scanning. Invoking an attention-based view (ABV), we develop hypotheses suggesting that competition tracking, participation in trade associations, and social network embeddedness will be associated with greater use of HPWPs. We also propose direct and moderating roles for top managers' perceptions of competitive intensity. We test our hypotheses using a database comprised of a combination of archival data and mail survey responses from 260 agricultural SMEs located in geographical clusters. Our results broadly support this study's hypotheses and contribute to a better understanding of the role of top managers' environmental scanning in the shaping of HPWPs in SMEs.
Workforce downsizing through employee layoffs has become commonplace in American businesses over the last 20 years. While these initiatives are typically undertaken in the quest for improved firm ...performance and competitiveness, empirical research to date has been equivocal in supporting the efficacy of these initiatives. In addition, extant research has not thoroughly examined factors or conditions that may influence or moderate the performance impact of workforce downsizing. In this paper, we address the question: Do industry conditions moderate the impact of workforce downsizing on firm performance? We examine this question using matched primary and secondary data on a sample of U.S. manufacturing firms. After controlling for a set of industry and firm-level variables, including firms' prior performance levels, our results indicate that downsizing is associated with decreases in subsequent firm profitability and that these negative effects are more pronounced in industries characterized by research and development (R&D) intensity, growth, and low capital intensity.
