Examining Non-Linear Relationships between Human Resource Practices and Manufacturing Performance

Abstract

One little-explored question concerning innovative human resources practices is how the intensity of their implementation affects their impact on establishment performance: is the relationship linear, or more complex? This analysis, using U.S. Census Bureau data for 1997 from a sample of 1,212 private sector manufacturing establishments, investigates the possibility of non-linearities in the relationship between establishment performance and six human resource practices. The author finds departures from linearity that are both statistically significant and substantively meaningful for four of the six practices. He concludes that linear estimations of these relationships could mislead theorists and result in faulty recommendations to practitioners.