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PERSONNEL PSYCHOLOGY
2006, 59, 501–528

HOW MUCH DO HIGH-PERFORMANCE WORK
PRACTICES MATTER? A META-ANALYSIS OF THEIR
EFFECTS ON ORGANIZATIONAL PERFORMANCE
JAMES COMBS, YONGMEI LIU
Department of Management
Florida State University
ANGELA HALL
Department of Risk Management and Insurance,
Real Estate, and Business Law
Florida State University
DAVID KETCHEN
Department of Management
Auburn University

Although there is growing evidence that high performance work practices (HPWPs) affect organizational performance, varying sample characteristics, research designs, practices examined, and organizational performance measures used has led extant findings to vary dramatically, making the size of the overall effect difficult to estimate. We use metaanalysis to estimate the effect size and test whether effects are larger for (a) HPWP systems versus individual practices, (b) operational versus financial performance measures, and (c) manufacturing versus service organizations. Statistical aggregation of 92 studies reveals an overall correlation that we estimate at .20. Also, the relationship is stronger when researchers examine systems of HPWPs and among manufacturers, but it appears invariant across performance measures. We use our findings as a basis to offer 4 suggestions intended to shape research practices such that future meta-analyses might answer today’s emerging questions.

Human resources can be an organization’s largest and most difficultto-control expense, but it can also be central ingredients affecting organizational performance (Pfeffer, 1998). Thus, a key task for researchers has been to understand how human resources can be managed to maximize productivity and enhance creativity while controlling costs. Rising to this challenge is a body of research labeled strategic human resource management (SHRM), which is devoted to understanding how human reWe are grateful to John Delery, Jerry Ferris, Jack Fiorito, Mark Huselid, and Micki Kacmar for their assistance and insight.

Correspondence and requests for reprints should be addressed to James Combs, Florida State University–Management, College of Business, Tallahassee, FL 32306-1110; Jcombs@fsu.edu.
COPYRIGHT

C

2006 BLACKWELL PUBLISHING, INC.

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PERSONNEL PSYCHOLOGY

source management practices affect organization-wide outcomes (Ferris, Hochwarter, Buckley, Harrell-Cook, & Frink, 1999; MacMillan & Schuler, 1985).
Human resource practices that SHRM theorists consider performance enhancing are known as high-performance work practices (HPWPs— Huselid, 1995). HPWPs include, for example, incentive compensation, training, employee participation, selectivity, and flexible work arrangements (Huselid, 1995; Pfeffer, 1998). SHRM theory asserts that these practices increase employees’ knowledge, skills, and abilities (KSAs), empower employees to leverage their KSAs for organizational benefit, and increase their motivation to do so (Becker & Huselid, 1998; Delery & Shaw, 2001). The result is greater job satisfaction, lower employee turnover, higher productivity, and better decision making, all of which help improve organizational performance (Becker, Huselid, Pickus, & Spratt, 1997). HPWPs also operate through organizations’ internal social structures to increase flexibility and efficiency (Evans & Davis, 2005).

Researchers have devoted significant empirical effort toward understanding the HPWP–organizational performance relationship. Indeed, our literature search uncovered 92 studies that report relevant statistics on the link. As suggested by this volume of research, the question of how much HPWPs affect organizational performance is important to both managers and researchers. Understanding the degree to which HPWPs affect organizational performance and the conditions that moderate the relationship helps researchers build contingencies into SHRM theory and aids practitioners seeking to justify investments in HPWPs. Studies have attempted to synthesize...
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