PERSONNELPSYCHOLOGY
1989,42
ORGANIZATIONAL CHARACTERISTICS AS
PREDICTORS OF PERSONNEL PRACTICES
SUSAN E. JACKSON
New York University
RANDALL S. SCHULER
Department of Management
New York University
J. CARLOS RIVER0
New York University
This study investigated the relationship between organizational context
characteristics and personnel practices. The following organizational
characteristics were hypothesized to influence personnel practices: industry sector, the pursuit of innovation as a competitive strategy, manufacturing technology, and organizational structure. In addition, organizational size and unionization were examined. Results based upon
data obtained from 267 organizations provided support for the general hypothesis that personnel practices vary as a function of organizational characteristics. In addition to interorganizational differences
in personnel practices, this study illustrates that large intraorganizational differences exist with respect to the practices used for managerial and hourly employees. Implications and future research needs are
described.
Employers have many options to choose from when designing their
personnel systems. For example, criteria used for performance appraisals can be specific or general, they can focus on behaviors or results,
and they can be assessed immediately after performance or some time
later (Smith, 1976). Regarding compensation options, employers can
choose to emphasize internal equity and consistency or to disregard this
aspect of pay; they can choose to pay below, at, or above market rates;
and they can choose how much influence seniority,job performance, and
skill levels will have in determining employees’ pay (Milkovich & Newman, 1987). Dozens of choices such as these are made, either implicitly
or explicitly, by managers within organizations. However, to date there
Financial support for this project was generously provided by New York University’s
Center for Entrepreneurial Studies, The University of Michigan, and the Human Resource
Planning Society, for which the authors are grateful. The third author’s participation in this
research was supported by the National Science Foundation.
Correspondence and requests for reprints should be addressed to Susan E. Jackson,
Department of Psychology, 6 Washington Place, New York University, New York, NY
10003.
COPYRIGHT
@ 1989 PERSONNEL PSYCHOLOGY, INC.
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has been little psychological research designed to identify the conditions
that affect these choices.
Some of the factors that might affect the adoption of particular personnel practices are external to organizations. These include such things
as governmental regulations, labor market conditions, and current management fads. In addition to such external factors are organizational
characteristics, such as size, structure, and technology. Personnel researchers have frequently speculated that organizational characteristics
such as these can shape the use and effectivenessof personnel practices.
These same researchers usually lament our lack of knowledge about
which organizational characteristics have significant consequences and
what those consequences are (e.g., see Kane & Lawler, 1979; Landy &
Farr, 1980; Latham, 1988; Schneider, 1985; Wexley, 1984; Zedeck &
Cascio, 1984). Recently, a few researchers have begun to include organizational characteristics as predictors of the personnel practices they
are studying (e.g., see Cleveland, Murphy, & Williams, 1989), although
the industrial psychology literature does not yet include any generally accepted theoretical perspective to use in generating specific hypotheses.
In this study, we examine several personnel practices hypothesized
to differ as a function of organizational characteristics. We use a behavioral perspective to develop hypotheses about which personnel practices
are most likely to vary with each of four organizational characteristics.
A behavioral perspective assumes that employers use personnel practices as a means for eliciting and controlling employee attitudes and behaviors. The attitudes and behaviors that facilitate the functioning of
organizations are expected to differ according to various characteristics
of organizations. For example, as is discussed in more detail below, in
organizations attempting to compete in the marketplace by being more
innovative than their competitors, employees must be willing to experiment with new ideas and take risks. Experimentation and risk taking
may not be desirable behaviors in organizations where innovation is not
needed, however. Thus, organizations differing with respect to the importance of innovation would be expected to have different personnel
practices to support the different behavioral styles required. in the two
types of organization.
A behavioral perspective for predicting which organizational characteristics will be associated with which personnel practices is clearly based
in psychology, and it contrasts sharply with several other perspectives
that have been offered for explaining the factors that influence the personnel practices that organizations adopt. For example, the institutional
perspective posits that organizations copy the practices they see being
used by others, and/or they adopt practices to gain legitimacy and acceptance (see Meyer, 1980; Meyer & Rowan, 1977; Tolbert & Zucker, 1983;
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Zucker, 1977). Thus the institutional perspective is useful for explaining differences in practices that occur in organizations facing different
legal environments (Miner, 1987). An economic perspective can also be
used to explain variations in personnel practices (see Kochan & Chalykoff, 1985). For example, this perspective suggests that relatively affluent conditions in an organization permit it to pay higher wages, which
in turn enable the organization to attract more job applicants and be
more selective, which should reduce the importance of training activities.
Other available perspectives include the control perspective (see Collins,
1974)and the political perspective (see Doeringer & Piore, 1971; Osterman, 1984; Pfeffer & Cohen, 1984). We recognized the value of these
alternative perspectives and included exploratory analyses for two organizational characteristics that these perspectives point to as important
(organization size and union representation). However, we relied upon
only the behavioral perspective when generating a priori hypotheses to
be tested.
Hypotheses Relating Organizational Characteristics to Personnel Practices
Although personnel psychologists usually conceptualize the behaviors needed from employees using the job as the level of analysis, many
aspects of behavior important to organizations are appropriately conceptualized at a level of abstraction above the level of specific jobs. Focussing on job-specific behaviors, as job analysis typically does, draws
attention to the differences in behaviors needed from employees in different jobs within an organization. In contrast, our emphasis is on the
overarching, common patterns of behaviors needed within an organization among employees in jobs of many different types. Our interest is in
the use of personnel practices as tools for shaping patterns of behavior
that integrate the activities of individualswithin an organization, thereby
helping to orchestrate the achievement of organizational goals and objectives (cf. Naylor, Pritchard, & Ilgen, 1980).
The organizational characteristics we examine in this study are assumed to be related to the patterns of behaviors employers need for
effective organizational functioning. Differences in the patterns of employee behaviors needed in organizations of different types provide the
rationale for why the organizational characteristics of the industry sector,
the competitive strategy, the technology, and the organizational structure should be related to differences in personnel practices (see Schuler
& Jackson, 1987). These arguments are explained in more detail below.
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
Industly Sector
The U.S. economy can be carved into a large number of industry
sectors, but the distinction between manufacturing-based and servicebased industries is one of the most basic. Service organizations differ
from manufacturing organizations in three ways: their “products” are
intangible rather than tangible; customers are actively involved in the
production of services; and the consumption of services occurs simultaneously with their production (Bowen & Schneider, 1988; Daft, 1986;
Mills & Margulies, 1980; Mills & Moberg, 1982).
The intangible nature of services means that performance is difficult for supervisors to monitor directly, so employees must be trusted
to monitor their own performance. The fact that customers are actively involved in the service production process means service providers
must be sensitive to clients’ needs; they must monitor these needs and
use the cues they receive from clients to guide their job behaviors. Because of these characteristics of servicejobs, service organizations should
be more likely than manufacturers to include both employee input and
client input as sources of performance appraisal information (Mills &
Morris, 1986).
The simultaneity of the production and consumption processes has
implications for personnel practices also. For example, quality control
cannot be achieved by the inspect-and-correct method commonly used
in manufacturing plants. Instead, quality control occurs at the point of
service delivery. In order to maintain control over quality, service organizations are likely to seek ways of controlling the process of service
production rather than the outputs (Mills & Moberg, 1982). They may
invest more resources to train new recruits, with the objective of socializing them to be effective monitors of their own service production behaviors (Bowen & Schneider, 1988). Another way to gain more control
over performance would be to use performance appraisal results in making compensation decisions. Thus the first hypothesis is as follows:
Hypothesis I : Organizations in the service sector will rely more heavily
on the following personnel practices, in comparison with manufacturers:
(a) employee input into performance appraisals; (b) client input into performance appraisals; (c) use of performance appraisal results to assess
training needs; (d) extensive training of new employees, with (e) emphasis
on performance on their currentjobs; and ( f ) use of performance appraisal
results in determining compensation.
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Innovation as a Competitive Strategy
The term competitive strategy is used to refer to the means by which
a firm competes for business in the marketplace (Porter, 1980, 1985).
Strategies can vary along a number of dimensions, and there are now a
large number of strategy typologies discussed in the literature.
In this study, we focus on the extent to which an organization’s competitive strategy requires innovation. Porter (1980) argues that innovation is one of the key ways by which businesses attempt to differentiate
themselves from competitiors. Other ways for businesses to compete include being the lowest cost producer, focusing on a specific market segment, and differentiating one’s products and services using marketing
techniques. Of these strategic alternatives, the competitive strategy of
pursuing differentiation through innovation has the clearest behavioral
implications.
The employee attitudes and behaviors consistently argued as being
important to organizations pursuing innovation are expertise, risk taking, and a longer-term focus (Brandt, 1986;Brockhaus,l980; Burgelman,
1983; Hornaday & Aboud, 1971; Maidique, 1980). The innovation process depends heavily upon individual expertise, which is often the key
resource drawn upon by project teams. Steep learning curves are typical; knowledge accumulates rapidly through experience and is difficult
to record. This means employee turnover can have disastrous consequences (Kanter, 1985). In addition, organizations pursuing innovation
experience a great deal of uncertainty because the path to innovation includes a mix of spurts and unforeseen setbacks (Quinn, 1979). Because
innovations often threaten the status quo, the political climate may be
volatile. These conditions require committed employees who have the
courage to risk personal setbacks (Fast, 1976). Because innovation requires experimentation, frequent failures are likely to occur. For experimentation to continue, employees must feel certain that they will not be
penalized for the failures that naturally accompany risk taking and will
benefit the organization in the longer term.
Organizations seeking to gain competitive advantage through innovation should be more likely to use personnel practices that cue and reinforce expertise, risk taking, and a long-term focus, in comparison with
organizations not interested in creating an atmosphere conducive to innovation. The need for a longer-term focus suggests that performance
appraisal systems should emphasize longer-term accomplishments. The
fact that innovation requires experimentation and risk taking means that
failures are likely. Performance appraisal systems that emphasize results would penalize employees for these failures, so they are likely to
be avoided by organizations seeking to encourage risk taking. Similarly,
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
compensation systems that penalize employees for experimentationincentive systems, for example-are likely to be used less in organizations concerned with stimulating creativity and innovation. To further
support the risk taking required for innovation, employees should feel
assured of their employment security; the logic here is that employment
security can provide a shield against fear of failure. The importance of
up-to-date knowledge and reliance on high levels of expertise suggest
that organizations pursuing an innovation strategy are likely to invest
more heavily in training activities.
Thus, in stating Hypothesis 2, we assume that the pursuit of differentiation through innovation as a competitive strategy requires having
employees with relatively high levels of expertise who are willing to take
risks and who assume a longer-term perspective. This assumption leads
to the prediction that differences in personnel practices are likely to be
found when comparing organizations that differ in terms of the extent to
which they are attempting to gain competitive advantage by pursuing a
strategy of differentiation through innovation. Specifically,Hypothesis 2
is as follows:
Hyputhesis 2: Organizations attempting to gain competitive advantage by
pursuing a strategy of differentiation through innovation are more likely
to use the following personnel practices, in comparison with organizations not pursuing an innovation strategy: (a) performance appraisals
that emphasize longer-term outcomes; (b) performance appraisals that
put less emphasis on results; less use of compensation that emphasizes results, such as (c) incentive compensation and (d) bonuses for productivity;
(e) employment security; and ( f ) extensive training overall.
Manufacturing Technology
The concept of technology has been used to refer to the processes
used by organizations to transform inputs into outputs (Daft, 1986;
Thompson, 1967; Woodward, 1958; 1965). As Daft (1986) clearly shows,
many typologies have been proposed for conceptualizing the critical dimensions along which technologies can differ. In this study, we consider
a dimension of technology identified by Piore and Sabel (1984) in their
discussion of the changing nature of manufacturing organizations.
Piore and Sabel(l984) distinguish between two technologies for producing goods: mass production and flexible specialization. Mass production technologies are used to produce standardized goods. These
technologies rely upon special-purpose, product-specific machines and
semi-skilledworkers. Flexible specialization is a modern version of production that shares some of the features of the craft modes of production
predominant prior to the industrial revolution. In comparison to mass
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production, flexible specialization is based upon jobs that are more complex and have greater variety.
Piore and Sabel (1984) argue that the level and number of skills
needed by employees differ greatly for organizations using flexible specialization technologies rather than mass production technologies, with
the former requiring employees with higher skill levels and a greater
number of skills. The need for skilled employees should lead organizations using flexible specialization technologies to invest more in training. Importantly, training activities should help employees acquire skills
needed for tasks they might work on in the future as well as those needed
for tasks they are assigned to in the present. Assuming the skills needed
by manufacturers using flexible specialization technologies are relatively
scarce, these organizations will be especially concerned about ensuring
skill availability. This suggests they may be more likely to adopt a compensation practice of giving managers the autonomy to pay employees
whatever it takes to attract and retain those with the required skills.
Another employee attribute likely to facilitate the effective use of
flexible specialization technology is a relatively greater concern for product quality over quantity. This is because the use of flexible specialization is more consistent with a strategy of competing on the basis of value
added, rather than low cost (a strategy more consistent with mass production technology). To monitor product quality, organizations using
flexible specialization technology may use performance appraisals that
include client (customer) input.
A team orientation is also needed in organizations using flexible
specialization, in part because peers are relied upon to conduct crosstraining. Compensation systems that reward employees for companywide performance are one personnel practice that might be used to enhance a team orientation. Including peer input as one aspect of performance appraisals would be another way to communicate to employees
the importance of interpersonal cooperation.
Finally, flexible specialization technologies presumably result in employees having jobs in which they exercise greater control over the final products resulting from their efforts. Under these conditions and
in comparison with mass production technologies, employees can more
legitimately be held accountable for their performances. This suggests
that manufacturers using flexible specialization technologies are more
likely to use performance appraisal results when making pay decisions.
To summarize, in comparison with manufacturing organizations that
use mass production technologies, organizations that use flexible specialization technologies are assumed to need employees with greater skill
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
levels, more skills, more concern for product quality, more of a team orientation, and greater commitment to the organization. In order to support the development of these, several personnel practices are expected
to be more prevalent in organizations using flexible specialization technologies, in comparison with those using mass production technologies.
These practices are included in a third hypothesis:
Hypothesis 3: Organizations that use flexible specialization to manufacture
products will rely more upon the following personnel practices, in comparison with organizations using mass production technologies: (a) job
designs that require employees to use a variety of skills; (b) peer input
into performance appraisal; (c) client input into performance appraisal;
(d) use of performance appraisals in pay decisions; training employees to
develop (e) skills related to their current jobs and ( f ) skills needed to perform other jobs; (g) a policy of paying employees whatever is needed to
attract and retain them; and (h) company-wide productivity bonuses.
OrganizationalStructure
As organizations form, they can be structured in several ways (Miles
& Snow, 1978). A major aspect of organizational stucture is the basis
for departmentalization. Two alternative ways to departmentalize are
by function or by product (Chandler, 1962; Daft, 1986; Galbraith, 1977).
Departmentalizing by function appears to be suitable for organizations that provide a single product or service. In such organizations, creation of the producthervice usually occurs through the completion of
tasks that involve sequential interdependency among work units. This
interdependency is critical for product completion and can be clearly
specified. Accordingly, performance appraisal and compensation practices may reflect concerns related to cross-unit interdependencies. Because no single unit is responsible for producing an entire product alone,
results-oriented criteria (e.g., the number of products produced) may be
less common in organizations organized by function. In addition, training and development activities are less likely to emphasize the development of broadly skilled employees because career paths encourage vertical promotions within a function (Galbraith, 1977; Thompson, 1967).
With a single-product focus, the functionally structured organization
operates within a limited environment. In contrast, organizations departmentalize by product when they have several distinct products and
serve many markets. Such organizations operate within multiple environments. Each product division is self-contained, and thus the contribution of each division or unit to the total organization is distinguishable and measurable (Galbraith, 1977). Consequently, performance appraisal and compensation practices are not likely to reflect process concerns related to managing cross-divisional interdependencies. Instead,
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bottom-line results are likely to be emphasized. Within the area of training and development, a product orientation implies less emphasis on developing functional specialists and more concern with developing generalists who are competent in all aspects of the business (Galbraith, 1977).
Thus, the fourth hypothesis is as follows:
Hypothesis 4: Organizationswith product-based divisions are more likely
to use the following personnel practices, in comparisonwith organizations
structured by functional departments: (a) performance appraisals that
emphasize results over process; (b) broad training designed to develop a
workforce with capabilities in several functional areas; and compensation
practices that focus attention on the division’s performance, including
(c) use of bonuses based upon company performance and (d) employee
stock ownership.
Ejcplorutory Analyses
Whereas the organizational characteristics we have discussed above
each have implications for the types of attitudes and behaviors that may
be needed among an organization’s employees, other organizational
characteristics that may be related to interorganizational differences in
personnel practices do not easily fit within a behavioral perspective. Tivo
examples of such organizational characteristics are size and unionization.
Oqunizutionul size. As organizations grow from small to large, a
number of other changes typically occur. For example, jobs in large
organizations are generally more specialized than those in small organizations, as specialization is one means through which large organizations attempt to increase efficiency (Baron, Dobbin, & Jennings, 1986;
Blau, 1972; Weber, 1947). More specializedjobs mean that employees in
larger organizations should require less diverse skills, and consequently,
they may need less training overall.
Another way that large and small organizations differ is in the type of
supervision used. In small organizations, supervision of employees can
occur through direct interaction between the head of the organization
and employees at the lowest level. In large organizations, supervision
is usually indirect, and control is formalized (Rushing, 1967; Steinmetz,
1969). Thus, small organizations can be expected to rely on more informal methods of performance appraisal, relative to large organizations
(Galbraith, 1977; Terrien & Mills, 1955).
In addition to these differences, several authors have used an economic perspective to suggest that small and large organizations differ
with respect to the presence of internal labor markets. Job specialization
and the greater availability of slack resources in large organizations have
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
been argued to be conditions that set the stage for the development of internal labor markets (Osterman, 1984), which are characterized by entry
through lower-level jobs, internal promotion, career paths, rewards for
seniority, and formal grievance procedures (Doeringer & Piore, 1971;
Kalleberg & Sorenson, 1979).
In conducting the present study, we included a measure of organizational size because size is a variable that has been found to correlate
with some employee attitudes and behaviors (Berger & Cummings, 1979;
Porter & Lawler, 1966). However, the behavioral perspective seems to
offer little in the way of a theoretical basis from which to develop a priori
hypotheses regarding the relationship between size and specific personnel practices. Therefore, we did not attempt to specify such hypotheses.
Instead, we consider our comparisons between small and large organizations to be primarily exploratory.
Union presence. Like size, the presence or absence of unions in organizations is a salient variable known to be associated with some personnel practices (e.g., see Baron, et al., 1986; Kochan & Barocci, 1985;
Kochan & Chalykoff, 1985; Mitchell, 1989). Practices generally associated with representation by unions are higher wages, more extensive
benefits, more provisions for job security, greater protection against arbitrary job assignments, and formal appeals processes through which employee grievances can be aired and employer actions can be challenged.
Union representation thus offers employees institutionalized participation in decisions affecting their conditions of work and rates of compensation.
Often, the conditions associated with unionization have been gained
at the expense of jobs with minimal skill variety, autonomy, and other
features of jobs associated with job enrichment (Oldham & Hackman,
1980). Consistent with such jobs, job performance is assumed to be
equivalent across employees, making performance appraisals seem unnecessary. Consequently, uniform wage systems are adopted in which
wages vary only by job class and seniority.
While these practices have been associated with the traditional union
movement, there is evidence of changes occurring within some unions.
Now, unionized organizations are adopting practices that are nearly
the opposite of those traditionally associated with unionization (Banas,
1988; Lawler & Mohrman, 1987). In addition, it should be noted that
while unions typically represent hourly workers, managerial-level employees may be influenced by the presence of a union in their organization, also. Union agreements often constrain management’s actions. For
example, managers in unionized organizations may have less freedom to
redesign their subordinates’ jobs or to use performance appraisal results
when determining compensation. On the positive side, wage and benefit
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gains won by the unions are likely to be followed by similar gains within
the managerial ranks.
Because the available evidence suggests that it may be important to
take union presence into account, we measured this variable and will
report on differences found between unionized and nonunionized organizations. As with the variable of size, we did not apply a behavioral
perspective to develop a priori hypotheses about how personnel practices were likely to differ in unionized and nonunionized organizations.
Instead, our comparisons for this variable are reported as exploratory.
Method
Questionnaires designed to assess organizational characteristics and
personnel practices were sent to human resource managers in 1,300 U.S.
organizations. Names and addresses of human resource managers were
obtained from two national membership directories for professional associations related to the field of personnel, namely the American Society
for Personnel Administration and the Human Resource Planning Society. A random sampling procedure was used with the restrictions imposed that (1) the title of the person contacted be that of manager, director, or vice president and (2) the title did not indicate that the person
served as a specialist (e.g., in compensation or training). Two hundred
and sixty-seven of these managers returned fully completed questionnaires usable for this study. Human resource managers who completed
and returned the questionnaire were then asked to provide the name of
the top line manager in their organization. One hundred and eightythree human resource managers complied with this request. In order to
obtain information that could be used to establish interrater reliability
for our measures of organizational characteristics, we sent the top line
managers a short questionnaire. Completed surveys were returned by
156 line managers (85%): 57 presidents, CEOs or COOS; 53 vice presidents of operations/production/manufacturing; 14 general managers; 13
vice presidents or executive vice presidents with no functional area designated; and 19 people with a variety of other titles.
As described in more detail below, the organizations included in this
study varied considerably on each characteristic predicted to be associated with personnel practices. In addition, organizations varied greatly
in age (median founding date = 1950; SD = 13.5 years) and the geographic scope of their primary markets (31% served regional markets;
49% served national markets; 20% served international markets). Forty
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SUSAN E. JACKSON ET AL.
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different industries were represented, and no specific industry comprised
more that 9% of the total samp1e.l
In designing this study, we sought to include organizations with diverse characteristics, yielding an extremely heterogeneous sample. Having organizations from dissimilar industries, of differing ages, and serving geographicallydissimlar markets increases our confidence in the generalizability of our results. However, we cannot claim that our sample
is statistically representative of the population of all US. business organizations. Because our sample included only organizations with human
resource specialists, organizations in our sample were larger (median =
472 employees) than the typical U.S. business establishment (median =
20; World Almanac, 1989). Our sample may be biased in other ways
as well; because we do not have the data needed to determine how our
sample differs from the economy as a whole, generalizations to the population of all U.S. businesses may not be appropriate.
Measures
Industry sector: Human resource managers answered two questions
designed to assess the extent to which their organizations were involved
in manufacturing and service activities. One question presented descriptions of 11 types of business activity that could be easily classified as manufacturing (7 activities) or service (4 activities) and asked respondents
to indicate which one was most descriptive of their organization. Examples were manufacturing of durable consumer products, manufacturing
of components for incorporation into finished products, and consumer
services. A second question asked respondents to estimate the percentage of sales for their organization that were derived from four types of
activity: nonmanufacturing activities and manufacturing activities based
upon small batchs, large batchs, and continuous processing (definitions
of each were provided). An organization was classified as a manufacturer (coded 0) if the human resource manager indicated it was primarily
engaged in one of the seven manufacturing activitieson the first question
and it derived at least 80% of sales from the three manufacturing activities in the second question (N = 118). An organization was classified
as a service-based business (coded 1) if the human resource manager indicated it was engaged primarily in one of the four service activities on
the first question and it derived at least 80% of sales from nonmanufacturing activities (N = 68). The resulting classification of organizatioiis
‘Organizations were classified according to the industry codes used by ‘‘CotporuteScoreboard” (1985).
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corresponded 100% with the classification based upon line managers’
responses.
Innovation strategy. The extent to which organizations were concerned with innovation as a method of competing was measured using
items developed by Dess and Davis (1984) to assess competitive strategies. Both human resource managers and line managers used a 4-point7
fully anchored scale to rate the importance of 21 business priorities. Factor analysis (principle component, varimax rotation) of the responses
from line managers indicated the presence of a factor that reflected the
importance of differentiation through innovation. Innovation scores,
which could range from 4 to 20, were created by summing across the
five items that defined this factor: namely, developing new products, innovating in the manufacturing process, being able to manufacture specialty products, having products in high-price markets, and having stable procurement of raw materials. Because Dess and Davis developed
these items for the manufacturing industry, the items were relevant only
to manufacturers (and not to service providers); thus, our examination
of the relationship between innovation strategy and personnel practices
was limited to manufacturing firms. For the analyses, manufacturers
with innovation scores below the median of 14were classified as not pursuing an innovation strategy ( N = 38), and manufacturers with innovation scores above the median were classified as pursuing an innovation
strategy ( N = 57). Internal reliability estimates for the innovation strategy index were acceptable for responses from both human resource and
line managers (Cronbach’s alpha = .73 and .65, respectively). Interrater
reliability was also adequate (T = .73).
Technology. Manufacturing organizations were classified as using
mass production technology ( N = 97) or flexible specialization ( N =
36) on the basis the percentage of the organization’stotal sales generated
by products manufactured using these two technologies. Organizations
were classified as relying upon mass production technology (coded 0) if
80% or more of their total sales were generated from products manufactured using large-batchlassembly-lineoperations or continuous process
operations. Organizations were classified as using flexible specialization
(coded 1) if 80% or more of their total sales were generated from products manufactured in small batches (defined as production runs of less
than 200). Interrater reliability for the technology index was acceptable
(T = .71).
Structure. Human resource managers were presented with several
choices for describing the structure of their organizations. First they
were asked to indicate whether the primary basis for organizing was
(1) by divisions with separate groups for similar products, markets, geographic regions, and so forth, (2) by functions with separate groups for
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
marketing, R&D, and so forth, or (3) other (respondents using this category usually indicated that a mixed or matrix-type structure best described their organization). If respondents indicated a divisional structure, they were asked to indicate the basis for divisions. Four choices
were presented: geographic regions, product lines, markets, or other. In
this article, we focus on comparisons between organizations structured
according to functional groups (N = 80) and those structured according to divisions based upon product lines (N = 78). Human resource
managers in organizations with function-based structures (coded 0) answered all questions for their organization as a whole; those in organizations with division-based structures (coded 1) answered all questions
for the division with which they were most familiar.
Size. Size was assessed on the basis of total number of full-time equivalent employees in the organization, as reported by human resource
managers. For all analyses, organizations were classified as small (coded
0) if they had 250 or fewer employees (N = 72) or large (coded 1) if they
had 1,000 or more employees (N = 70). These cut-off points were selected on the basis of the analysis provided by Steinmetz (1969), which
suggests that these two points approximate the sizes at which organizations experience critical transitions due to their growth.
Unionpresence. To assess union presence, human resource managers
were asked to report both the total number of employees who were
unionized and the number of different unions represented within their
organization. Overall, the portion of employees in the organizations in
our study who were represented by a union was 24.4%, compared with
the national average of 22.5% for the same year (U.S. Bureau of Labor
Statistics, 1985). For the purposes of our analyses, organizations were
classified as nonunion (coded 0) if there was no union representation
within the organization, and they were classified as unionized (coded 1)
if one or more unions were represented within the organization.
Personnel practices. Human resource managers were asked to describe several personnel practices. Items consisted of brief descriptions
such as “performance appraisal results are used to determine compensation” and “employees receive bonuses for company-wide productivity
improvements or profitability gains.” (Item wordings are shown in Tables 2 through 9.)
For most items, respondents were asked to indicate the percentage
of employees covered by the practice described. They were instructed
as follows: “Below are descriptions of several HRM practices. For each
item, indicate the percentage of employees for whom the statement is
currently true in your firm/division. Give separate percentage estimates
for each category of employees.” Estimates were requested for four categories of employees: top managers, other managers and supervisors,
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740
741
nonexempt salaried employees, and hourly employees. For a few items,
a different format was used (these items are footnoted in Table 1). The
alternativeformat asked repondents to divide a total of 100points among
several response categories. Thus, to assess the extent to which performance appraisals focussed on short-term versus long-term projects
(item 7 in Tables 2-9), we asked respondents to divide 100 points to indicate the percentage of “appraisals (that) focus on projects or assignments
that take less than 6 months to do, 6 to 12 months to do, 12 to 24 months,
and 2 years or more.” Similarly, to determine the extent to which performance appraisals took into account the evaluations of various alternative
sources of information (item 8 in Tables 2-9), respondentswere given the
following instructions: “Performance appraisals can be based on input
from various sources, such as supervisors, peers, clients, etc. For each
type of employee, indicate how much input each source has in the performance appraisal process.” The 100 points were to be distributed among
six sources: supervisor, supervisor’s boss, peers, self, subordinates, and
clients. A third item using this type of format assessed the percentage of
pay employees received from three sources (item 12 in Tables 2-9). Instructions were as follows: “For each category of employee, indicate the
percentage of 1985 compensation that was (a) guaranteed income [pay
from guaranteed source such as salary or hourly wages], (b) incentive
pay based on annual performance, (c) incentive pay based on long-term
(more than one year) performance.” Finally, for two items, respondents
estimated the number of hours of training received. The questions were
“The typical employee received how many hours of training during the
past 12 months (exclude new hires)?” (item 16 in Tables 2-9) and “The
typical new hire received how many hours of training during the past 12
months?” (item 17 in Tables 2-9).
Several organizations had no nonexempt salaried employees, so responses for nonexempt salaried employees will not be reported. Personnel practices for the two managerial categories were highly correlated
(median T = .76), so responses for these two categories were combined
by computing a weighted average that took into account the relative,proportion of managers from each of the two categories. Practices used for
management employees and hourly employees were not highly correlated (see Table 2), so we report all results for these two employee groups
separately.
When preparing items to assess personnel practices, we did not attempt to include multiple items to tap each specific practice. The psychometric properties of multiple-item indices are generally better than
for single items, and the development of such scales will be an important
next step for researchers interested in pursuing the issue of interorganizational comparisons in personnel practices. In the present study, our
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
priority was to assess practices related to many areas of personnel. Accomplishing this goal required human resource managers to respond to a
large number of items. We believed that asking managers to respond to
redundant items included for the purpose of developing multiple-item
indices would be unnecessarily taxing. Nevertheless, whereas most of
the items describing personnel practices were not sufficiently intercorrelated to justify combining items into indices, a few multi-item indices
were judged to be appropriate due to high intercorrelations between
items. These indices and their associated estimates of internal reliability,
which were computed separately for hourly and managerial employees,
are described in detail, next.
The percentage of pay based on incentives (item 12 in Tables 2-9)
was obtained by summing the percentages of pay from short-term and
long-term incentives (see above), alpha = .84 and .71, for hourly and
managerial employees, respectively. The percentage of employees for
whom job/employment security was almost guaranteed (item 13 in Tables 2-9) was obtained by averaging the percentages of employees for
whom “job security is almost guaranteed” and “employment security is
almost guaranteed”: alpha = .80 and .84, respectively. The percentage
of employees for whom training is given to develop skills needed in current job or skills needed in the near future (item 16 in Tables 2-9) was
obtained by averaging the percentages of employees who “During the
past 12 months, ...attended training programs designed to: (a) immediately improve performance in their current job, excluding training for
new hires, (b) teach new hires the skills they need to perform their jobs,
and (c) teach skills that will be needed in the near future”: alpha = .73
and .75, respectively. The percentage of employees for whom training
is given to develop skills needed for promotion, transfer, and/or future
company needs (item 17 in Tables 2-9) was obtained by averaging the
percentage of employees who “During the past 12 months, ...attended
programs designed to (d) teach skills for other jobs within the firm in
order to increase lateral mobility, (e) teach skills for other jobs within
the firm in order to increase promotability, and ( f ) teach skills for jobs
that do not yet exist, in anticipation of future company need”: alpha =
.83 and .88, respectively.
Results
Organizational Characteristics
Before testing our hypotheses, we examined the extent to which organizational characteristics were associated with each other (see Table 1).
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742
143
TABLE 1
RelationshipsAmong Organizational Characteristics
Characteristics
1. Industry:
service vs. mfg.
2. Innovation strategy:
low vs. high
3. Technology:
mass vs. flexible
4. Structure:
functionsvs. product division
5. Size:
small vs. large
6. Union presence:
none vs. some
2
3
4
5
6
NAa
NAa
-.28*
.12
.21*
.15
-.14
-.07
-.15
-.05
-.18
.02
-.I5
.05
.33*
aCoefficientswere not computed because innovation and technology scores are relevant
only for manufacturing firms.
* p < . 0 5 , two-tailed test.
These associations were generally low, and a few were significant: manufacturing organizations were more likely to be organized according to
product divisions, whereas service organizations were more likely to be
organized by functional departments; larger organizations were more
likely to have some union presence; and manufacturers were more likely
to be unionized. These relationships among organizational characteristics suggested that it might be appropriate to identify homogeneous clusters of organizations using more than one organizational characteristic
to identify each cluster (e.g., large, unionized manufacturers vs. small,
nonunion service companies). We explored this possibility using agglomerative hierarchical cluster analysis. No large, clearly defined clusters
emerged, so we chose to treat each organizational characteristic as a separate factor throughout our analyses.
Descriptive Statistics for Personnel Practices
Table 2 shows the intercorrelations among the personnel practices.
Values above the diagonal are for hourly employees. Values below the diagonal are for managerial employees. Values along the diagonal (which
are underlined) show the correlations between practices for hourly and
for managerial employees.
Table 3 shows the means and standard deviations for each personnel
practice assessed for each of the two employee groups studied (managerial and hourly employees). Results of comparisons between means for
the two types of employees (paired t tests) are shown also. The paired
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SUSAN E. JACKSON ET AL.
2
M
2
0
00
3
N
2
8
0
m
Y
0
00
2
sI
0
d
8
0
m
3
8I
0
vi
8
0
m
8
0
d
I
2
3
d
I
0
N
2
8
8
s
0
N
8
f
8
0
r-
13
8
8
8
8
2
m
ri
2
2
N
0
m
0
sI
8
0
M
0
0
N
8
13
B
B
0
t-
s
13
8
s
0
00
8
0
d
2
N
\o
8
I?
8
0
00
8
s
8
8
8
E:
sI
2
3
0
M
8I
8
0
m
I
B
2
I
sI
3
I
N
81
sI
0
N
%
0
d
0
M
I
I
I
XI
8
M
I
3
N
5:
P-
i
2
8
f
0
00
8
8
0
r-
s
0
00
2
N
t-
81
N
00
8I
3
m
N
M
2
21
6
2
B
2
8
8
I
m
00
sI
0
8
0
m
N
M
M
8I
3
8
8
s
m
b
00
B
3
m
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FI
13
M
m
3
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o\
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8
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17446570, 1989, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1111/j.1744-6570.1989.tb00674.x by Higher School Of Economics, Wiley Online Library on [10/04/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
PERSONNEL PSYCHOLOGY
744
1
2
3
4
5
13. %employeeswhosejob/
employment security is
almost guaranteedb
14. No. hourstrainingreceived
by typical employee in past
12 months (excludes new
hires)
08
01
11 04
00 -08
03
12
7
8a
8b
06
-14
12 -06
03
8d
00
03
05
04
8f
00
07
32
05
01
02 -05 -03
03 -02 -06
07
02 -05 -05
04 -04 -02
06 -07
8e
9
10
04
10
09
@
12
13
14
15
~
16
17
07 -03 -02
3
22
09
09
02
11
08
02
13
14 -02
63 45 24 31
06 -02
13 -02
02 -09
11 01
15
2 14 15 -04 -04
00 -03
-04 -05 -03 -01 -08 -11 -06
-07 06 01 02 12 08 00
-02 07 -02 00 05 05 07
-06 -09 -03 -01 -01 07 07
33 -02 16 -01 -01 -05 -04
23 16 01 01 -03 03 00
16 25 14 06 01 12 21
11
01 -08 -10
03
24
08
04
-40 -53 -21 -24 -05 06
05 00 -03 -04 00 -02
2 02 06 07 -01 01
08 3 03 -02 03 -03
44 12 @ 07 13 -01
15 09 23 22 01 -08
00 -05 06 00 52 06
8c
09 -10 -05 -04
-10 -07 -10 -11
04
04
06 -07 9 -68
-02 03 -44 15
-11 10 -48 -07
01 -04 -54 -20
-08 08 -52 -02
-01 07 -44 -04
-16 -11 05 -07
6
02 -10 -06
8. % of input to performance
appraisal that comes from?
a. supervisor
07 00 06 00 -06
b. supervisor’s boss
-15 04 03 -02 -04
c. peers
-01 -06 -08 08 -01
00 09 -03 -07 09
d. self
e. subordinates
-04 -06 -12 02 01
f. clients
06 -11 -03 04 11
9. %employeeswhoaregiven 05 -17 -01 01 04
bonuses based on wmpanywide productivity or
profitability
10. % employeeswho are
02 04 -01 08 15
stockholders
11. %employeespaidwhatever 01 -20 -16 -06 -11
it takes to attract and
retain them
12. % of pay based on
00 -16 -01 -09 -04
incentivesrather than fr m
guaranteed wageslsalary8
Personnel practices
Table 2 (continued)
VI
P
4
F
3
z
CA
R
0
cl
s
m
.
CA
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08
08
03
01
04
5
09
2
15. No. hourstrainingreceived -01 12 00
by typical new hire during
past 12 months
16. % employees for whom
12 16 09
training is given to develop
skills needed for their
current jobs or skills needed
in the near futureb
17. % employees for whom
12 01 06
training is given to develop
skills needed for promotion,
transfer, and/or future
company needsb
1
4
7
8a
10
05
03 -03
06
10
00 -05 -03
02
8f
07
05
24
01 -10 -01
04
8e
8c
8d
8b
15 -02 -05 -05
06 -01 -03
6
01
10
02
00
07
13
04 -03
12
05 -02
11
04 -10
10
12 01
08
07
9
29
32
27
14
16
17
16
32
62
46
54
48
2 18 10
15
Notes: Decimals have been omitted. Values above the diagonal are for hourly employees. Values below the diagonal are for managerial employees.
Values along the diagonal (which are underlined) indicate the correlation between practices that apply to hourly and managerial employees. Values
greater than .12 are significant at p < .05, using a two-tailed test.
aRespondents divided 100 points among the categories listed.
bIndicates a multiple-item index. See Methods section for details.
Personnel practices
3
Table 2 (continued)
2
0
x
c1
z4
r
E
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747
TABLE 3
Descriptive Statisticsfor Personnel Practices with Comparisons
Between Practices for Hourly and Managerial Employees
(N = 267 Organizations)
Practices
1. % employees who need a variety
of diverse skills to do their job
well
2. % employees whose performance
appraisals are formalized
3. % employees whose performance
appraisal results are used to
determine compensation
4. % employees whose performance
appraisals focus on how their job
is done, not how well
5. % employees whose performance
appraisals are based on objective
quantifiable results
6. % employees whose performance
appraisals are used to identify
their training needs
7. % employees whose performance
appraisals focus on projects that
take 12 months or longer
8. % of input to performance
appraisal that comes from?
supervisor
supervisor’s boss
peers
self
subordinates
clients
9. % employees who are given
bonuses based on company-wide
productivity or profitability
10. % employees who are
stockholders
11. % employees paid whatever it
takes to attract & retain them
12. % of pay based on incentives
rather than from guaranteed
wages/salaryb
13. % employees whose job/
employment security is almost
guaranteedb
14. No. hours training received by
typical employee in past 12 months
(excludes new hires)
Hourly
M
SD
M
Mgmt.
SD
t
39.2
26.4
82.6
16.8
26.78* **
75.7
32.1
83.3
27.6
3.37** *
55.8
40.7
86.2
23.2
11.46** *
29.3
28.8
30.2
26.9
0.5311s
58.8
33.2
70.6
24.8
5.40***
38.7
32.0
51.3
33.8
5.50***
1.0
5.0
8.4
10.5
10.8***
81.5
10.0
1.9
4.8
.4
1.2
17.6
15.6
10.5
5.1
8.5
3.3
3.9
34.2
67.2
14.8
3.9
9.1
2.1
2.6
46.7
19.4
11.6
6.3
11.3
5.0
5.8
37.3
11.12** *
5.46***
5.04***
6.92***
4.71***
3.79* * *
13.47** *
18.6
30.6
38.5
38.9
11.18***
10.8
21.6
24.9
28.6
9.73** *
5.0
13.4
9.9
13.1
5.34***
34.4
33.2
32.5
33.9
1.22ns
25.5
58.0
33.2
40.5
2.77**
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SUSAN E. JACKSON ET AL.
Table 3 (continued)
Hourly
Mgmt.
Practices
M
SD
M
SD
t
15. No. hours training received by
typical new hire during past
12 months
16. % employees for whom training
is given to develop skills needed
for their current job or skills
needed in the near futureb
17. % employees for whom training
is given to develop skills needed
for promotion, transfer, and/or
future company needsb
53.4
77.2
44.2
61.6
1.8411s
27.9
25.5
28.5
24.7
.43ns
8.8
15.2
9.1
15.8
,4011s
aRespondents divided 100 points among the categories listed.
bIndicates a multiple-item index. See Methods section for details.
* * * p < .001,2-tailed paired-t test;
* * p < .01,2-tailed paired-t test.
t tests reveal that within the same organization, the use of numerous
personnel practices differs for managerial and hourly employees.
Relationships Between Organizational Characteristics and Personnel
Practice
Tables 4 through 9 summarize the analyses conducted to investigate how personnel practices differed in organizations of different types.
Each table summarizes the results for one type of organizational comparison (e.g., manufacturers vs. service organizations, small vs. large organizations).
Analyses were always conducted separately for hourly and management employees. In all analyses, the organizational characteristic was
treated as the independent variable. Groups were defined according to
the criteria described in the Methods section. Personnel practices were
treated as dependent variables.
Both univariate and multivariate analyseswere conducted to test the
hypotheses. The univariate analyses consider each practice separately,
while the multivariate analyses consider the entire set of practices in a
single analysis. The univariate analyses are discussed first.
Univariate analyses
A univariate F statistic was calculated to determine whether the
prevalence of each practice varied in organizations with different characteristics. The results of these analyses are summarized in Tables 4
through 9. To facilitate use of these tables, we listed all of the practices
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PERSONNEL PSYCHOLOGY
748
749
assessed in each of the tables. This makes it possible to examine the relationship between each organizational characteristic and each practice.
Our hypotheses do not predict that all practices will differ as a function
of each of the organizational characteristics, however. The specificpractices predicted to differ as a function of the organizational comparisons
being made in each table are highlighted in boldface print. For each
practice, the hypothesized differences are summarized in the first column of the table.
Multivariate Tests
Although the univariate tests conducted shed some light on the differences in personnel practices used within organizations, the fact that
some practices are correlated with each other means that readers should
be cautiouswhen drawing conclusions on the basis of the univariate analyses. A more complete picture of the relationship between practices and
organizational characteristics can be obtained by examining the results
of multivariate analyses, which take into consideration the intercorrelations among practices. Therefore, Tables 4 through 9 also contain results
obtained from discriminant analyses.
In the discriminant analyses, the two groups being compared are
the two types of organizations under consideration in the table. The
personnel practices are treated as potentially discriminating variables.
Discriminant analysis has many parallels to regression analysis, which
we rely upon here to guide the reader through the statistics reported for
the discriminant analysis.
As in regression analysis, a discriminant analysis yields coefficients
(standardized canonical discriminant function coefficients) that indicate
the relative importance or weight of each discriminating variable (i.e., of
each practice). In Tables 4 through 9, these coefficients are shown in the
last column. Note that some practices do not have a coefficient shown.
This is because, for the results summarized in the tables, a stepwise procedure was used to enter practices into the discriminant analysis. In the
stepwise analysis, all practices were considered eligible for inclusion in
the analysis, regardless of whether or not we had an a priori hypothesis.
Thus, practices are included in the final discriminant function equation
if they add additional information, but they are not entered if they do
not add to the predictive value of the equation. “NE” appears in the last
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
column of Tables 4 through 9 for practices that were “not entered” in the
stepwise analysis.2
Summary statistics for the discriminant analyses are shown at the
ends of Tables 4 through 9. The canonical correlation (R,) reflects the
degree of association between the organizational characteristic and the
set of practices included in the final equation. As is true for R, the canonical correlation squared can be interpreted as the proportion of variation
in the personnel practices explained by the organizational characteristic
(see Klecka, 1980). Wilks’s Lambda is used to compute the x2 values;
x2 is used, in turn, to determine the statistical significance of the results.
Next, we consider the results in the context of our specifichypotheses.
In discussing our results, we indicate the item numbers shown in Tables 4
through 9 in parentheses, to facilitate reference to statistics contained in
the tables.
Hypothesis 1: Industry Sector
As shown in Table 4,the personnel practices used in manufacturing
organizations differ from those used in the service sector for both hourly
and management employees. As predicted, service organizations were
more likely to include client input as part of the performance appraisal
process (item 8) for both hourly and managerial employees, although average input from clients was quite low, even for service-based organizations. Service organizations were more likely to provide training related
to employees’ current work (item 16) for both types of employees, and
they were more likely to use performance appraisal results to determine
compensation (item 3) although, for managerial employees, this latter
hypothesis is supported only by the multivariate analysis.
Contrary to our predictions, service organizations did not clearly differ from manufacturers in their use of self-appraisals (item 8) or in the
number of hours spent training new recruits (item 15). Regarding the
use of performance results for determining training needs (item 6), there
was no difference for hourly employees, and service organizations make
2Huberty (1984) discusses the potential problems that can arise when discriminant function coefficients are used to interpret the nature of differences between groups compared
in a discriminant analysis. When multicollinearity is present among variables included in
an analysis, use of function coefficients can be misleading, so Huberty recommends using
the F-to-remove statistic as the basis for conclusions about how the groups being compared differ from each other. In this study, the correlations among practices included
in the discriminant analyses were relatively low. Consequently, the discriminant function
coefficients and the F-to-remove statistics are strongly associated with each other, and
conclusions about which practices differ most between groups being compared are similar
regardless of which statistic is examined.
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750
75 1
TABLE 4
Comparisons of Personnel Pmctices for Hourly and Managerial
Employees in Organizations from the
Manufacturing (M) and Service (S)Sectors
SD
Mean
(M)
(S)
(M)
(S)
Hourly
Managerial
37.80
80.76
40.20
85.70
26.57
18.56
28.70
16.59
ns
3.31+
NE
.18
2. % employees whose
performance appraisals
are formalized
Hourly
Managerial
71.16
80.98
82.90
86.31
34.51
30.38
29.40
25.02
5.551
ns
NE
.32
46.58
85.91
7132
88.93
40.68
23.12
36.18
17.71
17.27.
.79
ns
30
29.81
29.92
27.76
23.52
30.30
27.24
25.87
24.38
ns
ns
NE
-.38
58.50
70.91
63.88
70.58
34.53
25.56
28.63
23.19
ns
ns
- .69
36.67
56.20
39.41
42.04
31.90
34.05
29.11
32.07
7.78.
.89
18.74
3.78
15.22
3.47
23.36
14.75
16.90
4.16*
ns
PersonnelPractice
Hyp.
F
Coeff.
1. % employees who need
a variety of diverse
skills to do their job
3. % employees whose
performance appraisal
results are used to
determine compensation
M<S
Hourly
Managerial
4. % employees whose
performance appraisals
focus on how job is
done, not how well
Hourly
Managerial
5. % employees whose
performance appraisals
are based on objective,
quantifiable results
Hourly
Managerial
NE
6. % employees whose
performance appraisals
are used to identify
their training needs
M<S
Hourly
Managerial
-
ns
NE
-.69
7. % employees whose
performance appraisals
focus on projects that
take 12 months or longer
Hourly
Managerial
.30
NE
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
Table 4 (continued)
Personnelpractice
Hyp.
Mean
(M)
(S)
SD
(M)
(S)
F
Coeff.
8. % of input to
performance appraisal
that comes from?
a. supervisor
Hourly
Managerial
83.80
69.82
78.92
65.43
14.19
18.20
16.37
19.29
4.54*
ns
NE
NE
9.07
14.38
9.88
13.25
9.64
11.27
10.22
10.94
ns
ns
NE
NE
1.86
3.46
1.73
5.35
6.17
5.10
3.38
7.77
ns
3.99*
NE
.49
d. self
M<S
Hourly
Managerial
4.55
8.49
5.27
8.93
8.48
11.44
9.00
9.55
ns
ns
NE
NE
e. subordinates
Hourly
Managerial
.14
1.89
.59
2.41
.49
4.26
2.74
4.62
f. clients
M<S
Hourly
Managerial
37
1.83
2.88
4.16
1.10
431
7.02
8.34
14.61*
631"
.61
.46
16.56
45.51
19.57
46.96
33.35
36.59
36.36
37.46
ns
ns
NE
NE
22.37
43.74
19.43
35.21
33.14
39.94
32.68
38.02
ns
ns
-.25
-.21
9.28
24.29
11.67
20.53
20.29
27.56
23.31
24.84
ns
ns
.31
NE
2.73
10.65
3.27
14.46
10.59
12.42
12.86
16.90
ns
ns
NE
.27
b. supervisor's boss
Hourly
Managerial
c. peers
Hourly
Managerial
3.10+
ns
.32
NE
9. % employees who
are given bonuses
based on company-wide
productivity or
profitability
Hourly
Managerial
10. % employees who
are stockholders
Hourly
Managerial
11. % employees paid
whatever it takes to
attract & retain them
Hourly
Managerial
12. % of pay based
on incentives rather
than from guaranteed
wages/salaryb
Hourly
Managerial
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752
lhble 4 (continued)
Personnelpractice
Hyp.
Mean
(M)
(S)
SD
(M)
(S)
F
33.76
33.22
34.36
36.51
ns
Coeff.
13. 70employees whose
job/employment security
is almost guaranteedb
38.33
34.55
Hourly
Managerial
31.86
31.86
ns
NE
NE
14. No. hours training
received by typical
employee during past
12 months
(excludes new hires)
Hourly
Managerial
21.08
32.85
34.10
40.39
28.16
33.07
93.43
60.52
ns
ns
NE
.20
49.86
38.46
56.54
40.11
77.58
39.43
77.50
45.29
ns
ns
NE
NE
2435
26.04
33.1
33.8
23.89
24.25
26.91
24.91
5.33.
4.34.
36
.45
10.41
10.40
12.58
15.58
17.68
17.69
ns
ns
NE
NE
15. No. hours training
received by tvoical
new hire du&g past
12 months
Hourlv
Managerial
M<S
16. % employees for
whom training is
given to develop
skills needed for
their current job
or skills needed
in the near futureb
M<S
Hourly
Managerial
17. % employees for
whom training is
given to develop
skills needed for
promotion, transfer,
andlor future co. needsb
Hourly
Managerial
7.10
9.16
Summary statisticsfor discriminant analysis:
Hourly R, = .48, Wilks’s Lambda = .77,
Managerial R , = .49, Wilks’s Lambda = .76,
~‘(8=
) 46.63*
~ ~ ( 1 =6 48.48*
)
Notes: A priori hypotheses are indicated,where appropriate. F values are for univariate
tests. Coefficients are standardized canonical discriminant function coefficients,obtained
using a stepwiseprocedure in which all practiceswere eligible for inclusion (“NE”indicates
avariable did not enter the equation in the stepwise analysis.)
aRespondents divided 100 points among the categories.
bIndexwas developed from multiple items. See Methods for details.
+p< 30; *p< .05.
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753
SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
less use of performance appraisals when identifyingthe training needs of
managerial employees-which is the opposite of what we had predicted.
Hypothesis 2: Innovation Strategy
As shown in Table 5, the personnel practices used in organizations
pursuing a strategy of differentiation through innovation differed from
those used in organizations for which innovation was not an important
strategic activity.
As predicted, for hourly employees, firms emphasizing innovation
were less likely to use incentive compensation (item 12), they were more
likely to offer employment security (item 13) although this difference was
significant only in the canonical analysis, they provided more total hours
of training to the typical employee (item 14), and a greater percentage
of employees received training related to both skills needed currently
(item 16) and skills likely to be needed in the future (item 17). Contrary
to our predictions, for hourly employees, the performance appraisals
used in organizations pursuing innovation did not put significantlymore
emphasis on longer-term performance (item 7), nor did they put more
emphasis on process over results (item 4). Also, high-innovation firms
did not make significantly less use of bonuses for productivity (item 9).
The pattern of results was quite different for managerial employees.
Although the practices applied to managerial employees differed in lowand high-innovation companies, the particular practices that we hypothesized to differ were often not significantly different, suggesting that the
behaviors needed from hourly and managerial employees may not be
the same. The one hypothesis supported relates to training, with highinnovation organizations putting more emphasis on training for promotion, transfer, and future company needs (item 17). Associated with
this focus on the future was an interesting difference we did not predict: high-innovation firms were less likely to use the results of managers’
performance appraisals to identify training needs (see canonical results
for item 6), perhaps recognizing that when innovation is occurring, the
skills needed in one’s current position may not be closely related to those
needed in a new position or in the same position in the future. This idea
is also supported by the finding that more managers in high-innovation
organizations were reported to need diverse skills (item 1).
Contrary to our predictions, low-innovation firms (rather than high
innovation firms) put relatively more emphasis on process in their managerial performance appraisals (item 4), and the typical managerial employee received fewer (instead of more) hours of training (item 14).
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754
755
TABLE 5
Comparisons of Personnel Practicesfor Houriy and Managerial Employees
in OrganizationsLow (L) and High (H) in the Importance of
Innovation as a CompetitiveStrategy
Personnelpractice
Hyp.
Mean
(L)
(H)
SD
(L)
(H)
F
Coeff.
1. % employeeswho need
a variety of diverse
skills to do their job
Hourly
Managerial
32.79
76.24
41.51
86.13
25.56
22.79
25.92
11.78
2.61+
7.70*
NE
.72
66.70
82.32
79.84
84.99
37.87
26.94
28.95
28.54
3.66+
ns
.44
NE
46.45
83.98
55.61
88.38
44.31
30.16
40.56
15.74
ns
ns
m
28.42
35.99
2835
25.02
32.69
30.80
29.39
26.58
3.42+
62.11
72.28
58.00
71.79
34.20
31.33
37.83
22.76
ns
ns
NE
NE
34.61
60.99
39.07
53.87
32.34
38.13
32.69
32.85
ns
ns
NE
-.69
.46
16.40
1.13
19.70
.84
23.06
4.54
24.67
ns
NE
NE
2. % employees whose
performance appraisals
are formalized
Hourly
Managerial
3. % employees whose
performance appraisal
results are used to
determine compensation
Hourly
Managerial
NE
4. % employees whose
performance appraisals
focus on how job is
done, not how well
L<H
Hourly
Managerial
ns
NE
-2%
5. % employeeswhose
performance appraisais
are based on objective,
quantifiable results
Hourly
Managerial
6. % employees whose
performance appraisals
are used to identify
their training needs
Hourly
Managerial
7. % employees whose
performance appraisals
focus on projects that
take 12 months or longer
L<H
Hourly
Managerial
ns
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
Table 5 (continued)
SD
Mean
(L)
(H)
(L)
(H)
F
Coeff.
a. supervisor
Hourly
Managerial
83.50
67.02
83.70
71.60
12.81
22.16
14.60
16.67
ns
ns
.63
NE
b. supervisor’sboss
Hourly
Managerial
7.76
15.36
9.40
12.54
6.75
13.81
11.05
9.81
ns
ns
.83
NE
c. peers
Hourly
Managerial
1.72
3.45
1.70
2.98
3.15
5.32
6.75
5.04
ns
ns
NE
NE
d. self
Hourly
Managerial
6.14
8.95
4.45
9.79
11.42
11.55
7.53
12.51
ns
ns
NE
NE
e. subordinates
Hourly
Managerial
.09
2.76
.19
1.19
.18
5.67
.68
2.36
3.52+
f. clients
Hourly
Managerial
.51
2.64
.33
1.56
1.65
5.43
.79
4.12
ns
ns
NE
NE
19.16
44.22
14.75
48.08
36.09
3633
31.28
37.64
ns
ns
NE
NE
25.34
44.48
22.76
42.57
35.56
40.66
33.16
40.25
ns
ns
- .45
10.98
22.99
6.25
25.19
23.39
29.39
13.67
26.82
ns
ns
-.49
NE
5.56
10.43
1.57
11.57
17.71
13.52
4.10
14.30
3.84+
-.43
Personnelpractice
Hyp.
8. % of input to
performance appraisal
that comes from?
ns
NE
-.46
9. % employees who
are given bonuses
based on company-wide
productivityor
profitability
L>H
Hourly
Managerial
10. % employees who
are stockholders
Hourly
Managerial
NE
11. % employees paid
whatever it takes to
attract & retain them
Hourly
Managerial
12. % of pay based
on incentives rather
than from guaranteed
wages/salaryb
L>H
Hourly
Managerial
ns
NE
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756
757
Table 5 (continued)
Personnelpractice
Hyp.
Mean
(L)
(H)
SD
(L)
(H)
F
Coeff.
NE
13. % employees whose
job/employment security
is almost guaranteedb
L<H
Hourly
Managerial
.24
33.19
33.23
38.66
32.02
34.70
36.50
33.58
31.12
ns
ns
11.78
33.13
25.75
29.52
12.76
3832
35.42
23.73
5.42.
Hourly
Managerial
61.55
33.80
42.46
41.88
108.60
39.95
55.84
42.88
ns
ns
16. % employees for
whom training is
given to develop
skills needed for
their current job
or skills needed
in the near futureb
L<H
Hourly
Managerial
1832
25.18
28.14
27.52
21. B
25.53
23.46
24.07
430.
3
ns
NE
4.25
5.93
9.56
11.50
6.98
9.89
16.10
3.67+
2.69+
.49
.38
14. No. hours training
received by typical
employee during past
12 months
(excludes new hires)
L<H
Hourly
Managerial
ns
.27
-.41
15. No. hours training
received by typical
new hire during past
12 months
-.36
NE
17. % employees for
whom training is
given to develop
skills needed for
promotion, transfer,
and/or future co. needsb
L<H
Hourly
Managerial
Summary statistics for discriminant analysis:
Hourly R , = .53, Wilks’s Lambda = .72,
Managerial R , = .49, Wilks’s Lambda = .76,
19.26
~ ‘ ( 1 1 )= 28.69*
~ ’ ( 7 )= 24.75*
Notes: A priori hypotheses are indicated, where appropriate. F values are for univariate
tests. Coefficients are standardized canonical discriminant function coefficients,obtained
using a stepwise procedure in which all practices were eligiblefor inclusion ( “ N E indicates
a variable did not enter the equation in the stepwise analysis.)
aRespondents divided 100 points among the categories.
%dex was developed from multiple items. See Methods for details.
+ p < .10; * p < .05.
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SUSAN E.JACKSON ET AL.
PERSONNEL PSYCHOLOGY
Hypothesis 3: Technology.
As shown in Table 6, manufacturing organizations in which mass production technologies dominated used different practices in comparison
with organizations relying upon flexible specialization technologies. For
hourly employees,jobs in organizations using flexible specialization technologies required significantly more diverse skills, (item 1) and performance appraisal results were used significantly more to determine compensation (item 3). Although the direction of differences found for several other items were supportive of our hypotheses-including trends indicating that organizations using flexible specialization technologies use
client input a bit more in performance appraisals (item 8), offer more
bonuses based on company-wide productivity (item 9), and are somewhat more likely to pay whatever is needed to attract and retain employees (item 11)-these differences were not statistically significant for
hourly employees. The failure of these difference to reach statistical significance may be due in part to the relatively small number of organizations relying predominantly upon flexible specialization technologies.
Assuming these technologies will become more common, a trend many
have predicted (e.g., see Piore & Sabel, 1984), future studies should continue to consider the implications of such technologies, despite our weak
results.
For managerial employees, strong support was found for only one of
our hypotheses: organizations using flexible specialization were more
likely to pay managerial employees whatever was needed to attract and
retain them (item 11). Again, the direction of differences found for
several hypotheses was as predicted, although the differences were not
significant. Thus, the direction of the differences in the means indicate that organizations using flexible specialization technologies require
managers to use more diverse skills (item l), use more client input in
managers’ performance appraisals (item 8), and are more likely to give
bonuses based on company-wide productivity (item 9).
The canonical analysis revealed several other differencesthat we had
not predicted for managerial employees. For example, organizatiws using flexible specialization technologieswere more likely to appraise managerial employees on the basis of objective results (item 5), their performance appraisals were more likely to focus on longer-term projects
(item 7), and a greater percentage of managers’ pay was based upon incentives (item 12). Together, these results clearly indicate differences
between the personnel practices being used to manage managers in organizations using traditional mass production technologiesversus those
in organizations using flexible specialization technologies.
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758
759
TABLE 6
Comparisons of Personnel Practicesfor Hourly and Managerial Employees
in Organizations Using Mass Production (M) and
Flexible Specialization (F) Technologies
Personnelpractice
Hyp.
SD
Mean
(M)
(F)
(M)
(F)
F
3639
80.51
49.12
84.01
25.44
17.99
30.19
21.13
436.
.48
ns
NE
66.93
79.30
86.57
82.34
35.93
31.43
27.11
28.32
6.46*
ns
NE
NE
40.61
85.28
68.15
82.88
39.17
23.41
40.35
27.54
9.37*
.83
ns
NE
31.31
30.81
28.35
27.47
31.29
28.89
29.52
26.06
ns
ns
NE
NE
59.08
68.08
61.42
73.22
34.07
27.96
32.89
23.43
ns
ns
NE
.64
33.46
56.95
48.38
50.77
29.06
34.43
37.91
36.30
4.31*
ns
.62
17.48
1.57
23.92
1.88
24.29
6.45
24.52
ns
ns
Coeff.
1. % employees who need
a variety of diverse
skills to do theirjob
M<F
Hourly
Managerial
2. % employees whose
performance appraisals,
are formalized
Hourly
Managerial
3. % employees whose
performanceappraisal
results are used to
determine compensation
M<F
Hourly
Managerial
4. % employees whose
performance appraisals
focus on how job is
done, not how well
Hourly
Managerial
5. % employees whose
performance appraisals
are based on objective,
quantifiable results
Hourly
Managerial
6. % employees whose
performance appraisals
are used to identify
their training needs
Hourly
Managerial
7. % employees whose
performance appraisals
focus on projects that
take 12 months or longer
Hourly
Managerial
NE
- .46
NE
.59
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SUSAN E. JACKSON ET AL.
Table 6 (continued)
Personnel practice
Hyp.
Mean
(M)
(F)
SD
(M)
(F)
F
Coeff.
8. % of input to
performance appraisal
that comes from?
a. supervisor
Hourly
Managerial
84.34
72.85
83.81
72.12
14.21
17.44
15.30
15.31
ns
ns
NE
NE
b. supervisor’sboss
Hourly
Managerial
8.51
12.52
7.54
14.72
9.28
7.89
7.61
10.46
ns
ns
NE
.43
c. peers
M<F
Hourly
Managerial
2.51
3.87
.72
1.93
7.60
5.50
2.02
2.49
2.99+
-.59
d. self
Hourly
Managerial
4.08
7.06
7.12
7.34
7.80
10.70
12.25
10.02
ns
ns
-.36
NE
e. subordinates
Hourly
Managerial
.16
2.07
1.63
1.63
4.97
4.97
2.65
2.65
ns
ns
-.32
NE
f. clients
M<F
Hourly
Managerial
.26
137
.41
2.72
.49
4.02
1.04
5.08
ns
ns
NE
NE
16.12
41.84
21.26
51.98
33.23
3736
38.67
38.40
ns
ns
NE
NE
20.52
41.56
29.88
48.23
31.37
41.42
35.99
36.76
ns
ns
NE
NE
6.65
19.20
13.17
3036
16.42
24.77
25.53
31.29
ns
NE
3.29+
.27
3.53
9.70
1.06
14.56
12.90
11.06
3.99
19.24
ns
4.47*
NE
.46
ns
NE
9. % employees who
are given bonuses
based on company-wide
productivity or
profitability
M<F
Hourly
Managerial
10. % employees who
are stockholders
Hourly
Managerial
11. % employees paid
whatever it takes to
attract & retain them
M<F
Hourly
Managerial
12. % of pay based
on incentives rather
than from guaranteed
wages/salaryb
Hourly
Managerial
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PERSONNEL PSYCHOLOGY
76 1
Table 6 (continued)
SD
Mean
Personnel practice
Hyp.
(M)
(F)
(M)
(F)
F
Coeff.
38.17
35.85
37.91
33.28
35.21
34.92
34.32
32.88
ns
ns
NE
NE
20.85
33.67
22.56
36.36
30.12
38.29
21.88
25.95
ns
ns
NE
NE
50.12
39.70
46.20
37.61
86.07
44.72
32.10
29.00
ns
ns
NE
22.72
26.85
28.54
28.41
24.64
25.48
25.80
2535
ns
ns
IE
NE
6.60
9.92
9.86
10.96
10.54
15.07
18.32
20.73
ns
ns
NE
NE
13. % employees whose
job/employment security
is almost guaranteed*
Hourly
Managerial
14. No, hours training
received by typical
employee during past
12 months
(excludes new hires)
Hourly
Managerial
15. No. hours training
received by typical
new hire during past
12 months
Hourly
Managerial
NE
16. % employees for
whom training is
given to develop
skills needed for
their current job
or skills needed
in the near futureb
M<F
Hourly
Managerial
17. % employees for
whom training is
given to develop
skills needed for
promotion, transfer,
and/or future co. needs*
M<F
Hourly
Managerial
Summary statistics for discriminant analysis:
Hourly R, = .38, Wilks’s Lambda = 35,
Managerial R, = .42, Wilks’s Lambda = 22,
~ ~ ( =8 15.21*
)
~ ~ ( =7 18.25*
)
Notes: A priori hypotheses are indicated,where appropriate. F values are for univariate
tests. Coefficients are standardized canonical discriminant function coefficients,obtained
using a stepwiseprocedure in which all practiceswere eligible for inclusion (“NE” indicates
a variable did not enter the equation in the stepwise analysis.)
aRespondents divided 100 points among the categories.
%dex was developed from multiple items. See Methods for details.
+ p < .lo; *p< .05.
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
Hypothesis 4: Structure
As shown in Table 7, personnel practices differed somewhat for organizations structured according to functional departments versus products. As predicted, for hourly employees, bonuses for company-wide productivity (item 9) were more common in organizations structured according to product divisions than in those structured along functional
department lines, and more employees were stockholders in divisionalized organizations (item 10). Contrary to our prediction, functionally
st.ructured organizations put more emphasis on training employees for
future positions (item 17). Like hourly employees, managerial employees in organizations were significantly (and substantially) more likely to
be stockholders (item 10). The means indicate that these managers are
somewhat more likely to have performance appraised based on objective
results (item 5 ) and to receive bonuses for company-wide productivity
(item 9), although these latter two differences did not reach statistical
significance.
Finally, we note a significant finding that we had not predicted regarding the sources of input used for performance appraisak. For both
hourly and managerial employees, divisionalized organizations relied
relatively more on input received from supervisors and relatively less on
input from the employee (item 8). This result seems consistent with the
tendency for product-based divisions to be somewhat more focused on
the bottom line.
Size. Table 8 summarizes the differences found for small and large
organizations. Hourly employees in large organizations were more likely
to have jobs that required less diversity of skills (item l),they were less
likely to have formalized performance appraisals (item 2), they were less
likely to receive bonuses based on company productivity (item 9) but
more likely to be stockholders (item lo), their performance appraisals
were based somewhat more on input from their supervisor and less on
input from either themselves or their peers (item 8), and they received
fewer hours of training overall (item 14). Like their hourly counterparts,
managers in large organizations had jobs that required less diversity of
skills (item l), were more likely to be stockholders (item lo), and were
less likely to have peers as sources of input into their performance appraisal (item 8). Contrary to the finding for hourly employees, managers in large organizations were more likely to have formalized performance appraisals (item 2) compared with managers in small organizations, and their appraisals were somewhat more likely to include client
input (item 8).
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762
763
TABLE 7
Comparisons of Personnel Practices for Hour@and Managerial Employees
in Organizations Organized by
Functional Departments (F) and Product-Based Divisions (P)
Personnelpractice
Hyp.
Mean
(F)
(P)
SD
(F)
(P)
F
CoeE.
-
1. % employees who need
a variety of diverse
skills to do their job
Hourly
Managerial
39.96
82.20
37.74
83.33
24.84
14.52
28.62
18.90
ns
ns
NE
NE
71.91
81.20
76.50
88.20
31.97
28.11
31.22
23.21
ns
2.91+
NE
.21
60.46
88.17
54.10
88.02
40.45
20.06
41.90
24.46
ns
ns
NE
29.08
29.04
27.99
28.28
28.62
24.16
30.08
27.98
ns
ns
NE
NE
60.04
68.74
57.94
73.04
31.23
2034
34.25
24.23
ns
ns
NE
NE
41.69
44.92
43.31
61.19
31.23
30.45
34.25
33.50
ns
10.21*
.39
.4 1
.62
16.05
3.20
15.40
1.84
19.83
13.53
19.38
2.80+
ns
.41
NE
2. % employees whose
performance appraisals
are formalized
Hourly
Managerial
3. % employeeswhose
performance appraisal
results are used to
determine compensation
Hourly
Managerial
NE
4. % employees whose
performance appraisals
focus on how job is
done, not how well
F>P
Hourly
Managerial
5. % employees whose
performance appraisals
are based on objective,
quantifiable results
F<P
Hourly
Managerial
6. % employeeswhose
performance appraisals
are used to identify
their training needs
Hourly
Managerial
7. % employees whose
performance appraisals
focus on projects that
take 12 months or longer
Hourly
Managerial
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SUSAN E. JACKSON ET AL.
Tkble 7 (continued)
SD
Mean
(F)
(P)
(F)
(P)
F
a. supervisor
Hourly
Managerial
79.50
62.12
84.22
71.69
15.39
19.64
14.30
16.51
3.99*
9.63*
b. supervisor's boss
Hourly
Managerial
10.87
15.59
8.63
14.55
12.16
12.09
8.41
10.07
ns
ns
NE
NE
c. peers
Hourly
Managerial
2.04
4.19
1.76
3.20
6.16
6.97
5.11
4.75
ns
ns
NE
NE
d. self
Hourly
Managerial
6.09
12.14
3.81
6.86
9.14
11.54
7.85
10.28
2.82+
9.19*
e. subordinates
Hourly
Managerial
.40
2.47
.73
1.59
2.29
4.68
5.65
3.85
ns
ns
NE
NE
f. clients
Hourly
Managerial
.72
2.47
.72
2.11
2.33
4.63
2.36
4.43
ns
ns
NE
NE
13.05
42.96
21.19
51.62
3835
38.07
30.66
36.26
2.60+
ns
NE
13.91
23.81
25.25
51.02
27.70
34.24
34.72
39.29
5.16*
21.56*
36
.66
9.86
26.69
10.65
23.71
19.00
31.40
22.84
27.52
ns
ns
NE
2.25
10.54
2.98
10.34
8.12
12.63
10.66
11.03
ns
ns
NE
NE
Hyp.
Personnel practice
Coeff.
8. % of input to
performance. appraisal
that comes from?
9. % employees who
are given bonuses
based on company-wide
productivity or
profitability
F<P
Hourly
Managerial
.34
.27
-.31
-.34
.44
10. % employees who
are stockholders
F<P
Hourly
Managerial
11. % employees paid
whatever it takes to
attract & retain them
Hourly
Managerial
12. % of pay based
on incentives rather
than from guaranteed
wages/salaryb
Hourly
Managerial
NE
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PERSONNEL PSYCHOLOGY
764
Table 7 (continued)
Personnelpractice
Hyp.
Mean
(F)
(P)
SD
(F)
(P)
F
Coeff.
.53
NE
13. % employees whose
job/employment security
is almost guaranteed*
Hourly
Managerial
30.72
30.10
40.95
33.28
31.10
32.80
36.53
34.96
3.60+
21.65
29.14
21.98
32.29
47.14
30.25
29.37
32.46
ns
ns
NE
51.87
38.02
44.52
46.21
64.91
46.82
60.02
71.16
ns
ns
NE
NE
27.17
31.01
25.79
25.39
24.48
25.62
25.63
23.37
ns
ns
NE
-.25
9.45
937
6.71
7.85
14.52
14.28
1239
13.10
ns
ns
-35
ns
14. No. hours training
received by typical
employee during past
12 months
(excludes new hires)
Hourly
Managerial
NE
15. No. hours training
received by typical
new hire during past
12 months
Hourly
Managerial
16. % employees for
whom training is
given to develop
skills needed for
their current job
or skills needed
in the near future*
Hourly
Managerial
17. % employees for
whom training is
given to develop
skills needed for
promotion, transfer,
and/or future co. needsb
F<P
Hourly
Managerial
Summary statistics for discriminant analysis:
Hourly R, = .37, Wilks’s Lambda = .86,
Managerial R , = .49, Wilks’s Lambda = .76,
NE
~ ‘ ( 8 )= 22.40*
~ ’ ( 6 )= 41.51*
Notes: A priori hypotheses are indicated,where appropriate. Fvalues are for univariate
tests. Coefficients are standardized canonical discriminant function coefficients,obtained
using a stepwiseprocedure in which all practices were eligible for inclusion (“NE” indicates
a variable did not enter the equation in the stepwise analysis.)
aRespondents divided 100 points among the categories.
‘Index was developed from multiple items. See Methods for details.
+ p < .10; * p < .05.
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765
SUSAN E.JACKSON ET AL.
TABLE 8
Comparisons of Personnel Practices for Hourly and Managerial Employees
in Small (S) and Large (L) Organizations
Mezn
Personnelpractice
Hyp.
SD
(S)
(L)
(S)
(L)
F
Coeff.
44.71
84.65
31.57
80.27
26.59
15.36
23.77
17.53
8.87*
ns
-.42
80.13
75.75
69.16
85.90
29.79
34.31
33.69
22.91
3.97*
3.87+
60.21
84.25
52.43
85.16
41.52
25.63
40.95
24.20
ns
ns
NE
31.92
27.15
32.66
33.49
30.18
22.12
30.91
29.15
ns
ns
NE
NE
12.96
70.21
13.86
71.12
20.27
24.40
18.26
24.99
ns
ns
NE
NE
41.94
47.19
35.80
50.92
33.22
33.97
29.11
33.86
ns
ns
NE
NE
2.28
21.24
.76
19.20
11.99
24.55
2.04
23.95
ns
ns
-.33
NE
1. % employees who need
a variety of diverse
skills to do their job
Hourly
Managerial
-.37
2. % employees whose
performance appraisals
are formalized
Hourly
Managerial
-SO
.55
3. % employeeswhose
performance appraisal
results are used to
determine compensation
Hourly
Managerial
NE
4. % employees whose
performance appraisals
focus on how job is
done, not how well
Hourly
Managerial
5. % employees whose
performance appraisals
are based on objective,
quantifiable results
Hourly
Managerial
6. % employees whose
performance appraisals
are used to identify
their training needs
Hourly
Managerial
7. % employees whose
performance appraisals
focus on projects that
take 12 months or longer
Hourly
Managerial
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PERSONNEL PSYCHOLOGY
766
767
Table 8 (continued)
SD
Mean
(S)
(L)
(S)
(L)
F
Coeff.
a. supervisor
Hourly
Managerial
79.13
64.98
84.46
64.96
19.64
21.73
10.59
18.46
3.61*
ns
NE
NE
b. supervisor's boss
Hourly
Managerial
9.35
14.30
8.93
16.43
11.27
12.71
7.64
8.71
ns
ns
NE
NE
c. peers
Hourly
Managerial
2.65
5.40
1.35
2.66
6.47
7.82
2.42
4.79
ns
5.68*
-.29
-.59
d. self
Hourly
Managerial
6.38
9.27
3.88
8.93
10.15
9.83
5.77
19.85
2.91+
ns
-.37
NE
e. subordinates
Hourly
Managerial
.99
3.06
.12
2.24
6.00
5.70
.20
6.68
ns
ns
NE
NE
1.11
2.91
1.15
3.95
3.94
6.40
3.14
8.14
ns
ns
NE
.43
23.35
46.85
14.23
45.07
38.98
38.96
31.84
37.14
ns
ns
- .39
12.60
35.55
23.63
50.66
26.62
39.20
33.21
39.53
4.51*
4.87*
.54
.48
14.64
26.67
10.21
25.57
26.67
32.22
19.63
26.11
ns
ns
NE
NE
2.88
11.53
2.88
12.12
11.88
12.01
18.11
11.65
ns
ns
NE
NE
Personnelpractice
Hyp.
8. % of input to
performance appraisal
that comes from:a
f. clients
Hourly
Managerial
9. % employees who
are given bonuses
based on company-wide
productivity or
profitability
Hourly
Managerial
NE
10. % employees who
are stockholders
Hourly
Managerial
11. % employees paid
whatever it takes to
attract & retain them
Hourly
Managerial
12. % of pay based
on incentives rather
than from g aranteed
wagesfsalary'b
Hourly
Managerial
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
Thble 8 (continued)
SD
Mean
Personnelpractice
Hyp.
(S)
(L)
(S)
(L)
F
Coeff.
40.36
39.57
38.94
32.69
32.65
34.35
33.87
33.30
ns
ns
NE
NE
31.39
30.58
18.63
29.26
56.05
37.96
17.08
18.46
2.92+
ns
59.26
38.35
47.66
48.45
78.04
43.19
53.83
89.94
ns
ns
NE
NE
29.40
30.83
29.93
29.36
27.83
27.62
25.28
22.43
ns
ns
NE
NE
9.62
9.07
8.72
8.83
17.86
17.84
11.59
10.54
ns
ns
13. % employees whose
job/employmentsec ri
is almost guaranteed3 ”
Hourly
Managerial
14. No. hours training
received by typical
employee during past
12 months
(excludes new hires)
Hourly
Managerial
-.24
NE
15. No. hours training
received by typical
new hire during past
12 months
Hourly
Managerial
16. % employees for
whom training is
given to develop
skills needed for
their current job
or skills needed
in the near futureb
Hourly
Managerial
17. % employees for
whom training is
given to develop
skills needed for
promotion, transfer,
and/or future co. needsb
Hourly
Managerial
Summary statisticsfor discriminant analysis:
Hourly R, = .44, Wilks’s Lambda = .80,
Managerial R, = .35, Wilks’s Lambda = .87,
’
NE
NE
~ ’ ( 9 )= 27.65*
~ ’ ( 5 )= 17.63*
Notes: A priori hypotheses are indicated, where appropriate. Fvalues are for univariate
tests. Coefficients are standardized canonical discriminant function coefficients, obtained
using a stepwise procedure in which all practices were eligiblefor inclusion (‘“E indicates
a variable did not enter the equation in the stepwise analysis.)
aRespondents divided 100 points among the categories.
bIndex was developed from multiple items. See Methods for details.
+ p < .10; * p < .05.
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768
769
TABLE 9
Comparisons of Personnel Pmctices for Hourly and Managerial Employees
in Non-unionized (N) and Unionized (U) Organizations
SD
Mean
Personnelpractice
Hyp.
(N)
(U)
(N)
(U)
F
Coeff.
36.03
82.60
41.27
82.73
25.57
15.53
27.29
17.86
ns
ns
NE
61.90
82.47
84.97
83.76
33.90
31.25
27.70
25.36
36.10'
ns
.35
.38
34.35
86.35
70.31
86.62
36.37
22.06
37.52
23.32
59.01*
ns
.48
NE
26.68
31.65
31.15
29.02
26.97
26.56
30.31
27.50
ns
ns
NE
NE
48.68
70.88
65.91
70.33
35.51
27.20
21.93
23.43
17.89*
ns
.06
NE
28.73
54.93
45.59
48.95
28.72
34.64
32.76
33.40
18.28*
ns
NE
.97
17.57
2.58
16.27
2.52
23.11
12.71
19.79
ns
1. % employeeswho need
a variety of diverse
skills to do their job
Hourly
Managerial
NE
2. % employeeswhose
performance appraisals
are formalized
Hourly
Managerial
3. % employees whose
performance appraisal
results are used to
determine compensation
Hourly
Managerial
4. % employeeswhose
performance appraisals
focus on how job is
done, not how well
Hourly
Managerial
5. % employees whose
performance. appraisals
are based on objective,
quantifiable results
Hourly
Managerial
6. % employees whose
performance appraisals
are used to identify
their training needs
Hourly
Managerial
.19
7. % employees whose
performance appraisals
focus on projects that
take 12 months or longer
Hourly
Managerial
ns
.27
NE
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
a b l e 9 (continued)
Personnelpractice
Hyp.
Mean
(N)
(U)
SD
(N)
(U)
F
Coeff.
8. % of input to
performance appraisal
that comes from:a
a. supervisor
Hourly
Managerial
82.73
69.40
80.49
65.68
15.06
16.68
16.17
20.00
ns
ns
NE
NE
b. supervisor’s boss
Hourly
Managerial
9.90
15.37
10.05
14.48
10.18
12.43
10.92
11.23
ns
ns
NE
NE
c. peers
Hourly
Managerial
1.83
3.08
1.94
4.50
5.49
5.06
4.90
7.08
d. self
Hourly
Managerial
3.98
8.94
5.31
9.06
6.74
12.57
9.51
10.52
ns
ns
NE
NE
e. subordinates
Hourly
Managerial
.25
.97
.56
2.91
.99
3.07
4.31
5.84
ns
9.67*
NE
.50
f. clients
Hourly
Managerial
1.17
2.25
1.25
2.90
3.76
5.59
4.23
5.97
ns
ns
NE
NE
8.02
37.72
24.00
52.80
21.13
35.67
39.87
37.78
14.10+
10.43*
.35
.50
15.00
41.53
20.60
35.58
26.16
39.00
33.16
38.90
ns
ns
6.29
19.98
13.75
28.12
15.41
25.48
24.69
30.59
7.54*
5.06*
.24
.38
.95
4.89
8.92
13.50
4.00
15.45
9.54
16.69
5.26*
9.07
.22
.43
ns
3.09+
NE
NE
9. % employees who
are given bonuses
based on company-wide
productivity or
profitability
Hourly
Managerial
10. % employees who
are stockholders
Hourly
Managerial
NE
- .35
11. % employees paid
whatever it takes to
attract & retain them
Hourly
Managerial
12. % of pay based
on incentives rather
than from guaranteed
wagesisalaryb
Hourly
Managerial
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770
Bble 9 (continued)
SD
Mean
Personnelpractice
Hyp.
(N)
(U)
(N)
(U)
F
Coeff.
36.21
29.38
33.14
34.65
34.81
33.32
32.64
34.54
ns
ns
-.19
.21
26.43
32.98
25.01
33.49
50.48
33.39
63.41
45.22
ns
ns
-.26
NE
40.96
38.18
61.73
46.05
52.54
36.80
90.00
68.19
4.51*
ns
.23
NE
22. I
28.27
3
2
24.32
26.11
26.05
24.02
7.66*
ns
.19
NE
15.14
19.45
15.45
13.10
ns
ns
NE
-.36
13. % employees whose
job/employment security
is almost guaranteed*
Hourly
Managerial
14. No. hours training
received by typical
employee during past
12 months
(excludes new hires)
Hourly
Managerial
15. No. hours training
received by typical
new hire during past
12 months
Hourly
Managerial
16. % employees for
whom training is
given to develop
skills needed for
their current job
or skills needed
in the near future*
Hourly
Managerial
17. % employees for
whom training is
given to develop
skills needed for
promotion, transfer,
and/or future co. needsb
Hourly
Managerial
8.14
10.96
9.24
8.01
Summary statistics for discriminant analysis:
Hourly R , = .56, Wilks’s Lambda = .69,
Managerial R , = .38, Wilks’s Lambda = .85,
~ ’ ( 1 6 )= 92.83*
x2(8) = 40.65*
Notes: A priori hypotheses are indicated, where appropriate. F values are for univariate
tests. Coefficients are standardized canonical discriminant function coefficients, obtained
using a stepwise procedure in which all practices were eligible for inclusion ( “ N E indicates
a variable did not enter the equation in the stepwise analysis.)
aRespondents divided 100 points among the categories.
*Index was developed from multiple items. See Methods for details.
+ p < .lo; * p < .05.
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Union presence. Table 9 shows the results comparing unionized to
nonunionized organizations. When interpreting these results, it is important to keep in mind that the distinction here is between firms that
do and those that do not have at least one active union. The distinction
is not between employees who are members of unions and those who are
not. Thus, even in organizations where there is some union presence, the
percentage of employees actually represented by a union may be small.
The summary statistics for the discriminant analyses indicate that
this organizational characteristic is related more strongly to differences
in personnel practices for hourly employees (22, = .56) than to differences in practices for managerial employees (R, = .38). Hour& employees in organizations with some union representation are more likely to
have formalized performance appraisals (item 2), their performance appraisals are more likely to be used in determining their compensation
(item 3) and their training needs (item 6), they are more likely to receive
bonuses for company-wide productivity (item 9), they are more likely to
be paid whatever it takes to attract and retain them (item ll), more of
their compensation is from incentives (item 12), new hires receive more
training (item 15), and more receive training that emphasizes currently
needed skills (item 16).
Union presence has comparatively fewer implications for managers.
Interestingly, both the univariate and multivariate analyses reveal that
managerial employees in organizations with some union presence are
more likely to have subordinate input to the managers’ performance
appraisals (item 8). Like hourly employees, managers in organizations
with a union present are more likely to receive bonuses for companywide productivity (item 9), more likely to be paid whatever it takes to
attract and retain them (item l l ) , and more of their compensation is
based on incentives (item 12).
Discussion
The hypotheses tested in this study were derived using a behavioral
perspective for understanding why organizations are likely to differ with
respect to the personnel practices they adopt. The data provide evidence
that personnel practices are related to several organizational characteristics, including the importance of innovation as an aspect of the organization’s competitive strategy, the sector of the economy within which the
organization operates, the nature of the manufacturing technology used,
the organization’s structure and size, and whether a union is present.
These results are consistent with other recent studies showing that organizational context is related to personnel practices (see Cleveland et al.,
1989; Colarelli & Harbke, 1989; Guthrie & Olian, 1989; Saari, Johnson,
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McLaughlin, & Zimmerle, 1988). In addition, the data clearly indicate
that within organizations, different personnel practices are in effect for
employees at different organizational levels. Furthermore, the refationships between organizational characteristics and personnel practices are
different for hourly and managerial employees. In the remainder of this
article, we review our results and discuss both their practical implications
and future research needs.
Zndustry Sector
Summary of results. According to Bowen and Schneider (1988), an
important difference between service providers and manufacturers is
that the traditional means of quality control used by manufacturers cannot be used to regulate the quality of service delivery. Instead, quality of
service should be controlled by investing more heavily in training recruits
to monitor their own behaviors. Contrary to this prediction, we found no
difference between service-based firms and manufacturers with respect
to the number of hours of training offered new recruits. The lack of difference in the training received by new recruits in the service and manufacturing sectors may reflect the growing concern of manufacturers for
product quality and the corresponding need for trained employees who
will produce high-quality products. Alternatively, the lack of difference
may reflect a low awareness among service organizations of the potential
returns to be gained from training.
Although the total amount of training received did not differ in the
manufacturing and service sectors, the emphasis of training activities did
differ, with service firms focussing more specifically on skills needed by
employees to perform in their current positions. In addition, consistent
with expectations, service firms were more likely to include client input
as a source of performance appraisal information, suggesting that service
organizations may be more sensitive to the important role customers
play in determining their long-term effectiveness. We note, however,
that while this difference was significant, the average percentage of input
from clients was less than 5% even in service-based organizations.
Implications. In examining practices expected to differ between the
service and manufacturing sectors, the most striking results are the low
levels of training being offered to employees in general and the low levels of client input used in performance appraisals. It has been estimated
that although U.S. corporations spend nearly $30 billion yearly on job
training, per employee costs average less than $300 per year (American
Society for Training and Development, 1989). By comparison, Japanese
firms spend an estimated $4,000 per employee per year. Our results are
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
consistent with the financial data: a relatively small percentage of employees receive training in a given year, and those who do receive training
receive relatively few hours. In general, managers receive more training
than hourly employees. Thus, although a majority of larger firms may
report they are engaged in managerial education and training activities
(see Saari et al., 1988), our figures support the argument that both manufacturing and service firms might become more productive and competitive by increasing the resources they invest in training activities (CasnerLotto & Associates, 1989).
Our results concerning the low level of client input used in performance appraisals are consistent with another currently salient charge
being made against U.S. corporations: According to many observers, the
quality of service customers currently receive (from both manufacturers
and service providers) is relatively low (Levering, 1989). Our results indicate that customers are one source of performance feedback that is
generally not being used in organizations. This may be because “customer relations” is considered the responsibility of other departments
(e.g., marketing). If so, progressive practitioners who wish to exploit the
current weakness of their competitors’ performance appraisal systems
may find that the most expedient way to incorporate client input is to
integrate their performance appraisal activities with other externally focussed units within the organization.
Competitive Strategy
Summaly ofresults. Due to the nature of the innovation proccess
and the uncertainty experienced by organizations pursuing an innovation
strategy, several authors have suggested that innovating organizations
are likely to be successful only if employees engage in risk taking and
adopt a longer-term focus (Brandt, 1986; Brockhaus, 1980; Burgleman,
1983; Hornaday & Aboud, 1971; Maidique, 1980). Our data indicate
that firms pursuing an innovation strategy tended to use compensation
practices consistent with these needs (e.g., less reliance on incentives,
more employment security) for their hourly employees, although .not for
their managerial employees.
Innovation also requires employees who have high levels of expertise
-as was reflected in the training of hourly employees in organizations
pursuing innovation. Hourly employees in high-innovation companies
received more training overall, and their training was more likely to focus
on skills needed in their present jobs and skills that might be needed on
other jobs.
Implications. Our results suggest that organizations in which innovation is important are sensitive to the types of behaviors needed from
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their employees, and they are using personnel practices likely to stimulate and reinforce those behaviors. Thus, there is some evidence that
Organizations do adapt their personnel practices to fit their organization’s competitive practices. However, because we compared organizations only with respect to the importance of innovation as a competitive
strategy, it is premature to conclude that organizations with other types
of strategies (e.g., those that emphasize high quality or those that emphasize low cost) have also begun to match their personnel practices to
the needs of the competitive strategy. In organizations pursuing an innovation strategy, the human resource function should be expected to be
on the leading edge of practice in their field, just as would be expected
from their colleagues in engineering or marketing. Consequently, successful matching of practices to strategy may be more likely to occur in
these organizations. In contrast, human resource departments competing in more traditional ways (e.g., on the basis of cost) may be more likely
to adopt a more traditional approach to activities related to their function. To the extent a traditional perspective leads to the search for the
one “best” approach to human resource management, the specific strategy of such firms may not yet be reflected in organizationally tailored
personnel practices.
An interesting finding that arose when comparing low- and highinnovation organizations was that the personnel practices applied to
hourly employees differed more as a function of strategy than did the
practices applied to managerial employees. At least two very different
explanations for this finding are possible. One explanation for our findings is that the managerial behaviors needed to make an organization
effective are similar regardless of the importance of innovation. Alternatively, the human resource department may find it relatively easy to
ensure that appropriate practices are adopted when the employees who
will be affected are hourly workers, but more difficult to persuade managers to accept and adopt practices appropriate to some of the particular
behaviors needed (e.g., longer-term focus and risk taking) in innovationoriented organizations.
Technology
Summary ofresults. For hourly employees, the use of flexible specialization was most clearly associated with jobs that require more skill
variety and more use of performance appraisals in determining pay. Although we had not predicted it, organizations using flexible specialization technologies were substantially more likely to use performance appraisals as a means of identifying training needs. For managerial employees, flexible specializationwas most clearly associated with more use
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
of a pay-whatever-it-takespolicy and more use of incentive-based pay.
These results fit Piore and Sabel’s assumption that the skills needed by
manufacturers using flexible specialization are more scarce than those
needed for mass production, at least at the managerial level.
A surprising finding was the weak difference between manufacturers
using mass production and flexible specialization technologies with respect to the use of client input for performance appraisals of hourly and
managerial employees. It has been observed that U.S. manufacturers in
general have become more concerned with delivering high-quality products, but this trend does not appear to account for our results-almost no
client input was used by either type of organization or for either category
of employee.
Implications. The modern technologies that make flexible specialization possible include computer-aided design systems as well as computeraided engineering and manufacturing systems (Grayson & O’Dell, 1988).
Such systems are complex to operate and require skills that relatively few
hourly-level employees have acquired (Johnston & Packer, 1987). Nevertheless, many of the practices expected to be affected by reliance upon
flexible specialization technologies were no different in comparison with
practices being used by traditional mass manufacturers. Thus, while organizations appear to be responding to the demands of such technologies by monitoring performance of hourly employees in order to ensure
that rewards are linked to performance and that training can be focused
where it is needed most, the total amount of training seems not to be affected by the use of flexible specialization technologies. For managerial
employees, the primary difference is in compensation packages, which
are being used to buy needed talent.
The question of whether of not the new manufacturing technologies
can be effectively managed using practices borrowed from mass producers remains unanswered. Our analysis of the differences in the behaviors needed from employees working with these two types of technologies suggest that different practices should be used with these two kinds
of technology. If the behavioral analysis is correct, our data suggest that
organizations using flexible specialization have not yet implemented,several of the personnel practices that could enhance their productivity.
Structure
Summary and implications. Increasingly, U.S. businesses are admonished to recognize and reward longer-term behavior. Our results indicate that managers in product-based divisions were much more likely to
be offered the rewards of stock ownership to encourage such longer-term
thinking and slightly more likely to be offered bonuses for company-wide
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productivity, although this latter difference was not significant. Hourly
employees in product-based divisions were more likely to be stockholders and to receive bonuses in comparison with their counterparts in
departmentally organized units. These results seem to indicate that
product-based divisions use compensation to focus managers and hourly
employees on longer-term goals. Consistent with the results found for
the effects of strategy, then, these results indicate that (a) personnel
managers are aware of differences in the types of behaviors needed in
organizations with different structures and (b) personnel practices that
are congruent with those behaviors have been adopted.
Size
Summaly of results. We included the variable of size in this study because a variety of evidence suggests that large organizations are likely to
be managed differently from small organizations. However, because the
behavioral perspective that guided our research does not suggest clear
differences in the types of behaviors needed in small versus large organizations, we did not formulate a priori hypotheses. Some of our findings
regarding size seem surprising, however, despite this absence of formal
hypotheses. Overall, of all the organizational characteristics examined,
size was the characteristic with the weakest association with personnel
practices for both hourly and managerial employees. In addition, the
direction of some differences we found was unexpected. For example,
a greater percentage of hourly employees in small organizations were
covered by formal appraisal systems, compared with their counterparts
in large organizations. Also surprisingly, the typical hourly employee in
smaller organizations received more hours of training.
Implications. The relatively weak effect found for organizational size
is worth noting for several reasons. For one, it suggests that attitudinal and behavioral differences found between employees in small versus
large organizations may not be easily accounted for by examining the
differences in the personnel practices the two types of organizations (cf.
Berger & Cummings, 1979). Also, because size is both a salient feature
of organizations and a feature that is relatively easy to measure, it may be
the one organizational characteristic most often included in research reports. Consequently, as psychologists begin to re-examine past research
results in an effort to improve their understanding of how organizational
characteristics influence the effectiveness of various personnel practices,
they are likely to focus on size as a potential moderating variable. If this
occurs, there may be a high probability of nonsignificant results, which
could lead to the erroneous conclusion that personnel psychologistsneed
not be particularly concerned with the effects of organizational context.
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
Finally, our results regarding organizational size reinforce the importance of collecting empirical data to test the validity of folk wisdom before accepting it as fact.
Union Presence
Summary. Personnel practices for managerial and hourly employees
were related to whether or not a union was present, although as with size,
we offered no behaviorally based a priori hypotheses regarding how personnel practices in unionized and nonunionized companies were likely
to differ. Our results indicated that, for hourly employees, formal appraisals and appraisals based upon objective criteria were more widely
used in organizations with a union present. Consistent with these differences in performance appraisal practices, we found that organizations
with a union present were more likely to use appraisal results to identify training needs, and more employees were being offered training to
increase skills needed in their current positions. Also, hourly employees
in organizations with a union were more likely to have their compensation tied to their performance, both hourly and managerial employees
in unionized organizations were more likely to be offered bonuses based
upon company-wide productivity, and both groups of employees were
more likely to be paid whatever was needed to attract and retain them.
Implications. Employees in the unionized organizations represented
in this study were covered by many of the personnel practices associated with a nontraditional union-management relationship (see Lawler
& Mohrman, 1987). Such a relationship has several potential benefits for
employees. Formal and objective appraisals serve to protect employees
from capricious decisions, training programs ward off employee obsolescence, and performance-based pay should enhance perceptions of equity
especially among an organization’s best employees. Importantly, in addition to being desirable from the perspective of employees, many of the
practices that are more prevalent in unionized organizations are practices that should have positive effects for the organization overall. Thus,
our results indicate that many unionized companies have developed a
relationship between labor and management that is mutually beneficial.
Future Research Directions
Methodological Issues
The conceptual framework presented in this article views an organization’s decision to use some personnel practices in favor of others
as a response to the imperatives of the organization’s industry, strategy,
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technology, and structure. However, the design of our study does not
permit us to draw conclusions regarding the processes responsible for
the empirical associations we identified, and alternative causal models
are plausible. For example, it is possible that the personnel practices
an organization uses are partial determinants (either directly or indirectly) of the organization’s structure and choice of competitive strategy. It is also possible that some third variable, such as past organizational effectiveness, influences both personnel practices and characteristics of the organization-such as its choice of innovation as a competitive
strategy-thereby causing a spurious^' association between contexts and
personnel practices. While it may be impossible ultimately to ascertain
the correct causal model (due to the difficulty of conducting true experiments on this topic), consideration of alternative causal models would
likely suggest new directions for future research.
Despite the conceptual prominence of organizational context in the
organization theory literature, there has been relatively little research
devoted to developing psychometrically sound measures of organizational characteristics. Similarly, psychologists have no well-developed
methods for assessing interorganization differences in personnel practices. The development of both types of measures must be a high priority for researchers interested in this topic. The task will be difficult,
although perhaps not as formidable as implied by critics who charge that
neither organizational records nor informants can be considered reliable sources of information (Berger & Cummings, 1979). For example, this study shows that good interrater reliability can be obtained on
questions related to at least a few characteristics of organizations. And,
despite the fact that our study relied upon relatively simplistic methods for assessing personnel practices, meaningful interorganization and
within-organization differences in personnel practices were identified.
We would expect that as improved measurement tools are developed,
more powerful findings will emerge. We hope that the potential value
of new knowledge on this topic will stimulate efforts directed toward improving the ability of researchers to assess the complexity that characterizes organizations and their human resource management systems.
Theoretical Concerns
Theory development. It is clear that the state of the theoretical literature on the specific topic of the relationship between organizational
characteristics and personnel practices is only slightly better than the
state of our empirical knowledge. In this study, we relied heavily upon
the extant literature to identify organizational characteristics to examine. This literature was valuable to an extent; certainly our data support
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
the general notion that organizational context is associated with the use
of some personnel practices in predictable ways. Thus, the suggestions
in the literature served as useful heuristics (Campbell, 1982).
However, theorists interested in interorganizational comparisons typically have not emphasized personnel issues; even when personnel issues are the focus of attention (e.g., Pfeffer & Cohen, 1984), psychological considerations tend to be given less emphasis than other considerations, such as economic forces and political struggles (e.g., see Osterman,
1987). These perspectives may prove useful for explaining interorganizational differences in some personnel practices, but more psychologically
oriented theories are needed to understand the effects on employee attitudes and behaviors of these interorganizational differences in personnel
practices. Is it possible, for example, that performance-based pay has a
more beneficial impact in organizations where innovation is not particularly important in comparison with organizations that depend upon innovation for their survival? Implied by a question such as this is the notion
that some practices “fit” a particular type of organization while others
do not “fit” as well. If the effectiveness of personnel practices is contingent upon how well they fit the needs of particular organizations, the
implication is that using personnel practices that are misfits may result in
negative consequences (e.g., internal conflict, turnover, use of unethical
means for attaining performance goals). This question, as well as many
of the other applied questions we have raised (e.g., whether new technologies can be effectively managed using practices borrowed from mass
producers, whether managerial practices need to differ as a function of
the importance of innovation to an organization) can best be answered
by research that includes measures of organizational effectiveness. Theoretical development is clearly needed to guide researchers interested in
addressing the question of whether organizational context interacts with
personnel practices to determine the effects specific practices have on
behavior.
Relationships among practices. In this study, we examined several
contingencies likely to affect the personnel practices adopted by an organization, but there is one class of contingency variables we left unexplored. Simple logic suggests that both the feasibility and the consequences of using a particular personnel practice will be influenced,
at least in part, by other personnel practices being used. For example,
performance-based pay will likely be seen as more feasible in organizations that already have in place formalized performance appraisal systems that include objective criteria, and performance-based pay is likely
to stimulate different behaviors among employees who have had substantial skill-based training in comparison with employees whose performance is limited by insufficient training. It is to be hoped that the
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development of more sophisticated theory will enable researchers and
practitioners to move beyond reliance on simple logic as they seek to
understand how personnel practices act as a system of influences that
shape employee attitudes and behaviors.
Relating pattems of practices to observed pattems of behavior. Future research might also examine the question of whether differences
in personnel practices can explain demonstrated patterns of intraorganizational variation in attitudes and behaviors. For example, in business
organizations, higher-level employees are generally more satisfied with
their jobs than are lower-level employees (Berger & Cummings, 1979;
Porter & Lawler, 1966). Compensation systems might play an important
role in creating these differences, for as our results document, hourly
employees are less likely to reap monetary benefits from successful job
performance (see Table 3). As Berger and Cummings (1979) noted, the
literature relating organizational and suborganizational context to employee attitudes and behaviors would likely benefit from consideration
of the extent to which differences in personnel practices explain interorganizational and intraorganizational differences in employee outcomes.
Research on Change
In this study, we focused on interorganizational comparisons to address the question of whether organizational characteristics are related
to the personnel systems adopted. However, our results have implications for intraorganizational change, as well. Effective organizations are
dynamic systems that continually change in order to adapt to their environments. The changes they make are likely to include changes in
technology, competitive strategy, and structure. By implication, as an
organization changes to adapt to its environment, personnel practices
are likely to be changed, making the issue of how to best manage such
changes extremely important.
The question of how best to introduce organizational changes is certainly not a new one, but new issues might arise when the focus is on
changing personnel practices in particular. For example, it. seems likely
that some transitions may be psychologically easier to make than others
(e.g., from performance-based pay to salary, versus the opposite direction). Better understanding of such asymmetrical reactions to change
would enhance the ability of human resource managers to plan for and
conduct changes in personnel systems.
If ability to change to new working conditions is important, perhaps
selection systems should be designed to identify applicants who are likely
to view change as a welcomed challenge. Alternatively, organizations
may find that the best way to create a workforce that can adapt to change
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SUSAN E. JACKSON ET AL.
PERSONNEL PSYCHOLOGY
is by making change a frequent and normal occurence in the organization. In the role of change agent, personnel practitioners will need to
ensure employee flexibility, adaptability, and preparedness. Research
that addresses this need has been scarce to date.
Conclusions
Past calls for personnel studies that include organizational characteristics appear justified, for our results show clear differences in the
personnel practices used by organizations of different types. Furthermore, the relationships between organizational characteristics and personnel practices are substantially different for managerial and hourly
employees. Developing a better understanding of how organizational
contexts influence personnel practices may be one route to narrowing
the gap between personnel research and practice. This assertion is based
on the premise that context-rich personnel research will lead to an improved understanding of how organizational demands and constraints
shape personnel practices.
In conducting our research, we began with the assumption that there
is no “one best way” to manage an organization’s human resources; instead, there are many good ways to manage. Over time, through a process of trial and error, organizations evolve practices that fit their particular situation. The assumption that a practice which is ineffective in one
type of organization might actually be highly effective in another type of
organization is at odds with many scientific studies of personnel practices, where the implicit assumption often made is that the objective of
research is to evaluate the relative effectiveness, in general, of one type
of practice over another.
If our assumption is correct, then the extant literature provides little guidance to practitioners working in complex organizations that have
many distinct business units of varying sizes, technologies, structures,
strategies, and so forth. Admittedly, the present study provides few answers. Instead, the practical value of the present study will be measured
by the questions it stimulates among practitioners as they evaluate and
revise the human resource systems within their organizations.
Our research suggests that practitioners may find it useful to adopt
a structured, analytic framework as they consider the choices they face
regarding practices related to performance appraisal, compensation,
and training. That framework would include four major components:
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(1)identification of the internal and external contingencies likely to affect the personnel system, (2) consideration of the key attitudes and behaviors affected by each contingency, (3) an analysis of the logical consistency among the key attitudes and behaviors suggested by the combination of contigencies impinging on particular subunits within the organization, and (4)for each subunit, a logical analysis of the fit between
the constellation of desired attitudes and behaviors and the constellation of personnel practices being used. The framework described can
easily serve as a guide for logically evaluating human resource systems.
It might also prove useful as a guide to internal data collection efforts
in organizations interested in diagnosing the extent to which employees’
perceptions and beliefs match the organization’sintended messages being sent through their system of human resource management practices.
Because organizations are dynamic systems, the contingenciesaffecting their human resource management systems necessarily change over
time. Thus, the analysis process described above should be stimulated in
an organization whenever change in one of the important contingencies
is experienced or anticipated. Timely and thoughtful analysis, occurring
in the context of an organization that accepts the need for continual adjustment and change, should facilitate the maintenance of a close match
between organizational needs and human resource practices.
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