The impact of human resource and operational management practices on company productivity: A longitudinal study

Within the strategic human resource management (SHRM) perspective, psychology-based practices, especially empowerment, extensive training, and teamwork, are seen as vital to sustained competitive advantage. Other approaches, such as those of integrated manufacturing and lean production, place greater emphasis on operational initiatives such as total quality management, just-in-time, advanced manufacturing technology, and supply-chain partnering as determinants of organizational performance. We investigated the relative merits of these practices through a study of the productivity of 308 companies over 22 years, during which time they implemented some or all of these 7 practices. Consistent with SHRM theory we found performance benefits from empowerment and extensive training, with the adoption of teamwork serving to enhance both. In contrast, none of the operational practices were directly related to productivity nor did they interact with other practices in ways fully consistent with the notions of integrated manufacturing or lean production.