Shaw et al. ( 2002 ), using a similar approach, found that individual performance-
based pay that results in pay dispersion is only eVective in an independent work
setting whereas more equally distributed pay allocations are more eVective in
interdependent working arrangements. The dependent variables in the study were
measures of workforce eVectiveness and the results indicate the need to align the two
practice areas of compensation and work design, and, more importantly, that
alignment leads to positive synergistic eVects whereas misalignment is detrimental.
A study by Kruse et al. ( 2004 ) supports theseWndings, showing that employee
ownership alone does not improve organizational performance. Combining
employee ownership plans with policies and practices that involve employees and
give them a voice, however, has a signiWcant eVect on workforce productivity
andWrm performance (see also Blasi et al. 2003 ). In a study investigating the joint
eVects of top management team (TMT) compensation andWrm internationaliza-
tion on organizational performance, Carpenter and Sanders ( 2004 ) also found
‘powerful connections’ and ‘deadly combinations.’ Firm performance was ampliWed
for conditions of high TMT pay level and TMT long-term incentives when aWrm’s
degree of internationalization (DOI) was high while performance diminished for
Wrms with low DOIs. The opposite was true for the pay gap between TMT members
and their CEO.
TheWndings and conclusions of these studies are clearly supportive of the theory
behind internalWt, speciWcally inter-HRM activity areaWt. Further, their results are
generally consistent with Lawler’s ( 1986 ) high-involvement approach to manage-
ment and illustrate perhaps most clearly the eVects of ‘powerful connections’ and
‘deadly combinations.’ Many researchers have criticized theWeld of SHRM for its
lack of a strong theory, particularly when it comes to the conceptualization of
performance enhancing HRM systems (e.g. Becker and Gerhart 1996 ; Wright and
Sherman 1999 ). Using the high-involvement management approach as the foun-
dation may thus provide the basis to develop a theoretically grounded framework
for SHRM.
- 2 Intra-HRM Activity Area Fit
Research on intra-practice areaWt has taken oVduring the last few years. The
Wndings from this stream of research add critically to our knowledge by showing
that diVerent HRM activities in a speciWc HRM activity area are more eVective
when aligned. As with theWt between diVerent sets of activity areas within the
overall HRM system, individual activities within a HRM activity area create
synergistic eVects that can either enhance or suppress eVectiveness.
From research in the selection and staYng areas, it has long been known that
individual selection devices have incremental validity and, thus, additive eVects
on individual performance. Recent studies are also supportive of synergistic eVects.
398 sven kepes and john e. delery