Section Five SUMMARY
This section has examined the recent research on the
performance effects of human resource practices. In the past,
there were anecdotal reports of individual company experiences
with various practices and virtually no empirical evidence from
methodologically sound studies. Current research based on
sound methodology provides strong empirical support that
many human resource practices and systems have a substantial
impact on several objective measures of firm performance.
Objective measures of firm performance have included market
measures in the form of shareholder returns; accounting
measures such as ROA, ROE, Tobin’s q, and profitability;
productivity; scrap rates; and quality. In addition, while
objective measures are generally preferable to perceptual
measures, some aspects of firm performance, such as
innovation and operational outcomes, can be measured
reasonably well with perceptual measures or are not well-suited
to objective measurement. Studies using perceptual measures
also have found similar positive effects for several practices and
systems of practices.
Results of this impressive collection of research studies
indicates that several human resource practices—such as the
use of cognitive tests in selection, staffing selectivity, and