Its always gratifying when a study proves what you intuitively know. Professors from Florida State University and Auburn University used a technique called meta-analysis to mathematically combine the findings of 92 previous studies covering 19,319 organizations published since the mid-1980s.
They produced the study, How Much Do High-Performance Work Practices Matter? A Meta-Analysis of Their Effects on Organizational Performance, published in the autumn issue of Personnel Psychology.
Key Conclusions:
When a company emphasizes human resource activities such as incentive pay and flextime, it can enjoy a 10 to 20 percent improvement in employee retention, employee productivity, profitability and stock price.
Conversely, companies which cut spending on human resource programs can expect to see their bottom line shrink by up to 20 percent.
Performance improvements are stronger when companies take a systematic approach to human resources rather than implementing one or two practices.
When companies cut their HR budgets”which was often the first place to save dollars when the economy took a slide”it had a knockdown effect on retention, productivity, profitability, and stock price.
Study co-author and Lowder Eminent Scholar at Auburn University, Dave Ketchen said: Over the last 25 years, corporate America has debated whether the human resources function adds value or if it is just a necessary evil. Our results show that negative images of human resource managers miss the mark. Skilled HR managers can make the difference between a company making a profit or losing money.
Talent drives performance. Talent management matters.
