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Using an extensive data set on Finnish workers during the years 1990–2002, we analyze the relation between dispersion of wages within plants and labor productivity. We find a positive and significant relation between dispersion of wages within plant and average sales per worker. This relation is quadratic when dispersion is conditioned on workers’ observable characteristics. We also find positive and significant relation between unconditional dispersion of wages within plant and value added per hours worked, while we find a non-significant relation between conditional wage dispersion and valued added per hours worked. Results indicate that the incentive effect of wage dispersion dominates fairness or sabotage considerations.

Using a unique three‐digit firm‐level data set of all medium‐ and large‐sized manufacturing enterprises in Bulgaria covering the years 1997/1998, and investigation is conducted into how wage determination is related to ownership status. Building on a slightly modified version of the right‐to‐manage model, the pooled OLS, panel and first‐difference TSLS estimates show statistically significant differences in the share of rents taken by workers employed in state, private domestic and foreign firms. Taking account of firm heterogeneity, it is found that rent sharing is nearly non‐existent in foreign‐owned firms, while the level of pay is higher compared with state‐owned companies. Further, rent sharing seems to be highly pronounced in state‐owned enterprises, while on average domestically private‐owned companies are characterised by less rent sharing. Overall, the robustness checks confirm these findings.

This paper investigates the impact of adopting quality management standards like ISO9001 on a firm's performance and the mediator role of human capabilities within firms in this relationship. The article analyses this mediator effect in the context of an emerging economy that set a policy reform aimed at increase ISO adoption and with a large share of informal labour markets.

This study implements a quantitative approach, applying a Difference in Differences-DiD model with a Propensity Score Matching on fixed effect panel data analysis of a sample of certified and non-certified firms using firm-level data obtained from the national statistics office of Colombia. This methodology allows having comparable groups before the policy implementation. It reduces differences in observable characteristics and controls for parallel trends in primary outcomes before the policy reform.

The research findings suggest that after Colombian policy reform of the quality system (2006), firms that adopted ISO 9001 certification increased innovation (5.2%), labour productivity (4.6%), sales (5.7%) and wages (4.9%). Furthermore, it shows that the share of permanent workers is an essential mediator in adopting quality programs. Adopters firms with a large percentage of temporary workers weaken their initial investment in quality infrastructure.

This research does not consider one key aspect. This is the lack of information about the organizational culture inside Colombian organizations that is related to a successful implementation of Quality Management standards like ISO 9001. However, it does not affect the conclusion about the mediation effect of human capital in the relationship between ISO 9001 and firm performance.

The study covered all the Colombian manufacturing firms with ten or more employees. It provides critical insight for managers to value implementing ISO 9001 certification and appropriately put attention to enhancing their firms' human capital in emerging economies. Also, a policy implication of the paper is that governmental efforts to strengthen quality infrastructure in emerging economies should also include steps to increase a firm's investment in human capital.

This study provides further support for government policies to strengthen firms' incentives to adopt modern management practices. The strong effects of implementing these management practices on sales, productivity and innovation have been identified. Furthermore, the investments in quality infrastructure must be accompanied by investment in human capital and workforce stability.

Micro and small enterprises (MSEs) represent 99% of Peruvian firms, contribute 42% of Peru's Gross Domestic Product, and employ half of the country's labor force. Despite their relevance for the Peruvian Economy, they have low survival rates and are characterized by low productivity and processes inefficiencies. This chapter explores whether the adoption of Business and Supply Chain Management (SCM) practices influences MSEs' performance. We conducted a field study using data from 50 MSEs located in Piura, Peru, specifically from trade, service, and manufacturing sectors. We used the data collection guidelines from the MIT GeneSys to measure the firms' adoption of Business and SCM practices. Our results show that MSEs with higher adoption of Financial Planning, Supply Chain Planning, Supplier Relationship Management, Marketing, Procurement, and Stock Control practices are more likely to have higher revenue (i.e., sales). In addition, a multiple regression analysis reveals that while SCM practices do not seem to directly explain productivity growth in MSEs (as business practices do), they, however, seem to influence the performance of business practices, and, thus, have an indirect effect on the productivity growth of MSEs.

Personnel economics tends be based on single-firm case studies. Here, we examine several internal labor market dimensions of nearly 5,000 firms, over a period of 20 years, using detailed matched employer–employee data from Portugal. In the spirit of Baker, Gibbs, and Holmstrom (1994a, 1994b), we consider worker turnover, the role of job levels and human capital as wage determinants, wage dispersion within job levels, the importance of tenure in promotions and exits, and the scope for careers. We find a large degree of diversity in most of these personnel dimensions across firms. Moreover, some dimensions are shown to be robust predictors of firm performance, even after controlling for time-invariant firm heterogeneity and other variables. These dimensions include low worker churning, the importance of careers, low wage dispersion at low and intermediate job levels, and a tight relationship between human capital variables and wages.

Describes the design and implementation of an incentive scheme for two different groups of computer operators in a large Middle Eastern electricity and distribution company. Compares computer outputs from each group and suggests that performance is dependent not only on the kind of work processed, but also on the effort of workers. Concludes that through proper application of work measurement and by enlisting the capabilities of the computer itself, successful incentives can be achieved.

In this paper a simultaneous-equations model of firm closing and wage determination is specified in order to analyse how wages adjust to unfavorable product demand shocks that raise the risk of displacement through firm closing, and to what extent an exogenous wage change affects the exit likelihood. Using a longitudinal matched worker-firm data set from Portugal, the estimation results suggest that, under the existence of noncompetitive rents, the fear of job loss leads workers to accept wage concessions, even though a compensating differential for the ex ante risk of displacement might exist. A novel result that emerges from this study is that firms with a higher incidence of minimum wage earners are more vulnerable to adverse shocks due to their inability to adjust wages downward. Indeed, minimum wage restrictions were seen to increase the failure rates.

Self‐service food stores are a new emerging form of retail technology in Saudi Arabia. By focusing on relevant institutional, planning and operational dimensions, this exploratory study describes and analyses the process by which this form of food retailing was adopted. Data were collected from 96 stores located in three metropolitan areas of the Kingdom, and the results suggest that the sudden proliferation of these stores during the past decade was characterised by the lack of rational planning, short‐term decision making orientation, and limited concern for promotional activities. The analysis of the 62 study variables indicated that differences in store size exerted limited influence on store marketing activities and had a moderate effect on store planning and institutional dimensions.

The purpose of this study is to analyze how the design of performance appraisal is influenced by the competitive strategy of the firm. Then, this paper examines if the alignment between appraisal and strategy impacts firm performance.

The study sample includes 258 Spanish firms in the manufacturing and services sectors. This information was gathered through questionnaires addressed to the CEO and the senior human resources manager. Several econometric models are estimated, using robust regression analysis and including a set of relevant control variables.

A positive relationship is found between an innovation strategy and developmental performance appraisal. A cost strategy has a negative impact on the adoption of developmental performance appraisal. The findings also confirm that firms with a quality strategy and developmental appraisal have higher performance. In addition, firms adopting an innovation strategy and administrative appraisal enjoy higher return of equity.

Future research should analyze the dynamics of the relationships between appraisal, strategy and performance to rule out the flaws of cross-sectional data. Another potential extension is the analysis of the interactions of the design of other human resources management practices with both competitive strategy and firm performance.

Firms can improve performance by aligning performance appraisal design with strategy. Those with an innovation strategy should choose administrative appraisal, and those competing on quality should focus on developmental appraisal.

This paper compares the theoretical recommendations on performance appraisal for different competitive strategies, what firms actually do, and the impact that the alignment between appraisal and strategy has on firm performance.