Human Resource Management

ACKNOWLEDGEMENT

The present piece of work owes its existence to many persons without whose help it would not have been possible to complete the project.

I would like to thank Prof. A. K. Mahapatra for being my guide from the institute side for the last one month and for his valuable suggestions and constructive criticism.

I would also like to thank to him for arranging such a good project which gave me a lot of practical exposure to corporate world and from which I learnt a lot which will definitely help me in the coming times when I join the corporate after finishing my course.

02/03/08

KIIT School of Management Manash Ranjan Nayak

Bhubaneswar MBA-1

TABLE OF CONTENT

PARTICULARS PAGE NO.

 Introduction..Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'....03

 Technology, HRM Practices, and Productivity.Ð'...Ð'...Ð'...Ð'...Ð'...Ð'......04

 LEHD (Longitudinal Employer-Household Dynamics) PlugÐ'....05

 HRM Practices and Workforce Skill Adjustment CostsÐ'...Ð'...Ð'....06

 Conceptual Framework of HRM System, Technology

Investment, and Firm PerformanceÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'.......08

 Descriptions of HRM and Industrial Relations VariablesÐ'...Ð'.....11

 HypothesesÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'......12

 Data Set and Measures Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'....14

o The Analytical Dataset Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'.....14

o HRM Variables Ð'...Ð'....Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'......14

o R&D Measure Ð'...Ð'...Ð'....Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'........15

o Firm Performance MeasureÐ'...Ð'...Ð'...Ð'...Ð'...Ð'......Ð'...Ð'...Ð'...Ð'.....Ð'...15

 Empirical AnalysisÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'........16

o HRM Cluster DescriptionsÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'.......16

o HRM Principal Components AnalysisÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'......16

o Worker Productivity RegressionsÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'.....17

 MeasuresÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'....18

o Firm PerformanceÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'......Ð'...18

o Workforce ProductivityÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'........18

o TurnoverÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'....Ð'...Ð'....Ð'...Ð'.....18

o High Performance Work SystemsÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'.........Ð'...19

 Discussion and Future WorkÐ'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'...Ð'....Ð'...Ð'.....20

Introduction:

As the pace of technological change has quickened, and as global competition has shortened product life cycles, firms have had to rethink their technology investment strategies and their human resource management practices in order to remain competitive. This study examines the relationship between firm-level research and development (R&D) and firms' human resource management (HRM) practices in a high-tech industry.

Although the relationship of technological change and labor market outcomes at the individual-worker level has been well-studied, surprisingly little is known about what happens within the firm. Specifically, there is little empirical research on whether firms' technology choices are consistent with their human resource practices and whether there is a statistical relationship between technology, human resources and performance at the firm level.

There are several channels through which firm R&D and HRM decisions may be related. If technology and labor force skills are complements in firms' production functions,