It’s 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.