What works at work? Evidence from the Minnesota Human Resources Management Practices Study

Abstract

Although many factors underlie competitive success for businesses, one factor that is frequently overlooked is the technology of managing workers-the day-to-day practices of human resources management. Basic decisions such as how compensation structures are set, how decision-making rights are allocated, and how much training employees receive have major effects on organizational performance and, by extension, the health of the regional economy. This article presents results from the 1994-1996 Minnesota Human Resources Management Practices Study, which had three main goals: to gain a detailed picture of which human resources practices have been adopted by Minnesota firms over time; to determine how the mix of practices differs across industries and ownership structures in the state; and to evaluate the relationships between human resources practices and employee productivity, firm profitability, and workplace safety. The article describes the methodology of the MHRMPS; summarizes findings related to the adoption of human resources practices and their distribution across industries and ownership structures in Minnesota; discusses factors that influence the adoption of particular practices; and considers the impact of particular human resources practices on workplace safety, employee productivity, and firm profitability. Based on their findings, the authors maintain that the organization of work in Minnesota firms, and the human resources practices that accompany it, have been thoroughly transformed since the early 1980s, largely as a result of increased reliance on computer-based technologies. The `new` workplace relies more heavily on employee involvement in both decision making and in firm performance, requires greater worker skills, and entails more complex tasks than the `old` workplace. The authors conclude by nothing that the optimal combination of human resources practices for a particular firm is not easy to determine. The decision must be made in the context of preexisting conditions, such as the nature of competition in the firm`s industry or the nature of the tasks the firm`s employees perform, and consideration must be given not only to the potential effects of individual practices on desired outcomes, but also to possible interactions and conflicts between them.