Firms face a strategic challenge of the dual pursuit of enhancing commitment to continuous improvements in performance through employee involvement, and remaining flexible and adaptable to constantly changing market conditions. Toward understanding the consequences of this strategic dilemma, I will examine the influence of this dual pursuit on firm performance. I begin with the proposition that firms seek to maximize performance by creating sustainable competitive advantages, particularly through the effective deployment of human resources. This deployment requires that firms choose among an array of employee involvement and workforce adaptability policies and practices that best align with business strategies. The dual pursuit of these strategic options communicates inherently different (and contradictory) philosophies to employees. On the one hand, employee involvement policies and practices reinforce management's value of employees and management's commitment to empower employees to continuously improve performance. On the other hand, workforce adaptability policies and practices create uncertainty and threaten employment and compensation security of employees. Missing from the literature is an examination of the dual or simultaneous pursuit of these strategic options and its combined effect on organizations. Using data from the 1998 Workplace Employee Relations Survey, a national survey of employee relations in Great Britain, several regression models are specified that test the central hypotheses developed herein. First, a model is specified that tests the effects of both employee involvement and related practices and adaptability practices on labor productivity and quality; both directly and indirectly as mediated by organizational commitment. Second, a model is specified that tests whether or not there are interaction effects among several employee involvement and related practices on commitment and performance. The findings indicate that certain employee involvement and related practices have positive effects on commitment, whereas certain adaptability practices have negative effects on commitment. Commitment, in turn, is shown to have a strong positive association with performance outcomes. Last, the evidence also shows that certain employee involvement and related practices have positive, direct effects on performance outcomes, whereas certain adaptability practices have negative direct effects on performance outcomes.
