Complementarities between Workplace Organisation and Human Resource Management: Evidence from Swiss Firm-Level Panel Data

Owing to changes in the business environment, there has been a tremendous adoption of innovativeworkplace organisation (WO) and human resource (HR) practices during the last fewdecades. Assuming a holistic perspective on human resource management (HRM), the presentstudy establishes the hypothesis of mutually reinforcing WO and HR practices that, thus, constitutea so-called high-performance work system. Precisely, it is argued that there may be acomplementary relationship between a more decentralised way of allocating tasks and decisionrights on the one hand and continuing training (or skilled labour), incentive pay or a moreintensive use of long-term, as opposed to temporary, employment on the other. This hypothesisis examined empirically using latest nationally representative panel data of about 2,500firms in Switzerland and applying econometric estimation techniques on the basis of an augmentedCobb-Douglas production function. The estimation results show statistically significantcomplementarities between the WO and HR practices mentioned above. In addition, socalledinnovative HRM systems of mutually reinforcing WO and HR practices increase firmperformance significantly. These results are robust to unobserved firm heterogeneity and tothe problem of reversed causality.