High‐performance work system implementation in small and medium enterprises: A knowledge‐creation perspective

• Date: 01 July 2012
• Author: Matthew Semadeni,Brian S. Klaas,Malayka Klimchak,Anna‐Katherine Ward
• DOI: http://doi.org/10.1002/hrm.21485
• Published date: 01 July 2012

HIGH-PERFORMANCE WORK

SYSTEM IMPLEMENTATION

IN SMALL AND MEDIUM

ENTERPRISES: A KNOWLEDGE-

CREATION PERSPECTIVE

BRIAN S. KLAAS, MATTHEW SEMADENI, MALAYKA

KLIMCHAK, AND ANNA-KATHERINE WARD

While it is well established that high-performance work systems (HPWSs)

affect fi rm-level outcomes within large, complex organizations, less is known

about how they create benefi ts for fi rms within the small-business sector.

Using a knowledge-creation perspecti ve, this study examines the impact

of HPWSs in small and medium enterprises and examines whether the im-

pact observed depends on the small-business leader’s capacity to obtain ad-

ditional HR knowledge from an external expert, as well as the leader ’s HR

background and knowledge. Archival and survey data were obtained from

294 small-business organizations, with survey responses obtained from both

the small-business leader and an HR consultant assigned to the small busi-

ness. Findings suggest that leader perceptions of HR effectiveness are posi-

tively related to the use of HPWSs and that this relationship is moderated

both by the communication patterns between the small-business leader and

the HR consultant assigned to the fi rm and the small-business leader’s HR

knowledge. © 2012 Wiley Periodicals, Inc.

Keywords: entrepreneurial/small business, human capital, strategic HR

Correspondence to: Brian S. Klaas, Moore School of Business, University of South Carolina, Columbia, SC

29208, Phone: 803.777.4901, E-mail: klaasb@moore.sc.edu

Human Resource Management,

Human Resource Management, July–August 2012, Vol. 51, No. 4. Pp. 487–510

© 2012 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI:10.1002/hrm.21485

Introduction

The impact of high-performance work

systems (HPWSs) on individual be-

havior and organizational perfor-

mance has been examined extensively,

with much evidence suggesting that

positive effects are observed in association

with the use of HPWSs (Arthur, 1994; Benson,

Young, & Lawler, 2006; Bowen & Ostroff, 2004;

Chadwick, 2007; Fulmer, Gerhart, & Scott,

2003; Lepak & Shaw, 2008; Sun, Aryee, &

Law, 2007; Takeuchi, Lepak, Wang, &

Takeuchi, 2007). Further, research has also

488 HUMAN RESOURCE MANAGEMENT, JULY–AUGUST 2012

Human Resource Management DOI: 10.1002/hrm

This article

examines the

moderating role

played by the small-

business leader’s

familiarity with and

understanding of HR

issues and also by

the leader’s capacity

to use external

relationships to

obtain additional

knowledge

regarding the

implementation of

HR processes.

leader with regard to HR, this variation in

background and exposure is likely to be a

critical element in determining the role

played by HPWSs within the small-business

context. Much knowledge regarding how to

address HR challenges is tacit (i.e., unarticu-

lated, rule of thumb, intuitive) in nature,

and, thus, cannot be easily codified and

transmitted. As such, responses to HR chal-

lenges will, at least in part, be determined

by tacit knowledge possessed by the small-

business leader when confronted with such a

challenge.

The tacit nature of much knowledge re-

garding HR policies also highlights other

attributes of the business leader within the

small-business context. Because of the tacit

nature of much knowledge within this arena,

the capacity to acquire knowledge as HR chal-

lenges are being faced is likely to be critical.

The transfer of tacit knowledge is thought to

depend on some level of personal contact

and trust, and small-business leaders are

likely to differ in the degree to which they

have the relationships required for obtaining

tacit knowledge regarding HR (Connor &

Prahalad, 1996; Grant, 1996; Subramanian &

Venkatraman, 2001). Thus, given the central

role played by the small-business leader in

the execution of HR programs and policies,

this capacity to obtain knowledge as prob-

lems and challenges are being confronted is

likely to be highly relevant.

While much work has examined the im-

pact of HPWSs within large firms, little atten-

tion has been given to HPWSs within the

small-business setting. Further, no prior work

to our knowledge has examined the role

played by the small-business leader in deter-

mining how the HPWS affects outcomes

within the firm. This study is designed to

contribute to the literature by examining the

impact associated with the HPWS within

the small-business context and, further, by ex-

amining whether the impact associated with

the HPWS is moderated by attributes of the

small-business leader. Specifically, this article

examines the moderating role played by

the small-business leader’s familiarity with and

understanding of HR issues and also by the

leader’s capacity to use external relationships

shown that the impact of HPWSs varies with

characteristics of the organization and the or-

ganizational environment (Batt, 2000; Datta,

Guthrie, & Wright, 2005; Delery & Doty,

1996). Interestingly, however, most work ex-

amining the HPWS has done so within the

context of large, often complex organizations.

By contrast, little research has examined the

impact of human resource systems within

the small-business sector—conventionally

defined as including firms with fewer than

500 employees (Cardon & Stevens, 2004;

Headd, 2000; Heneman, Tansky, & Camp,

2000). This is important because the small-

business context is likely to be quite distinc-

tive both in terms of the HR challenges faced

and in terms of how HR practices

are actually implemented and

used.

Within larger firms, HR pro-

grams are often designed and im-

plemented by a staff of HR profes-

sionals with the involvement of

general managers, many of whom

are likely to have acquired signifi-

cant exposure to HR processes

through prior managerial respon-

sibilities or interaction with senior

managers with a greater under-

standing of HR processes. Within

smaller firms, responsibility for

HR matters is likely to fall to the

business leader or an assistant

operating under his/her close su-

pervision (Kotey & Slade, 2005).

Further, the business leader most

typically will not have prior pro-

fessional experience within the

HR function (Cardon & Stevens,

2004). Beyond this, there is likely

to be substantial variation across

small-business leaders in the

amount of exposure they have

had to the professional use of HR

practices and processes. While

some may have had the opportunity to ob-

serve experienced managers effectively im-

plement HR processes and policies, others

may have been in roles or organizations that

afforded them few such opportunities. Given

the central role played by the small-business