The Effect of HRM Practices and R&D Investment on Worker Productivity
The Effect of HRM Practices and R&D Investment on Worker Productivity
As the pace of technological change has quickened and global competition has shortened product life cycles, firms have had to rethink their technology investment strategies and their human resource management (HRM) practices in order to remain competitive. This chapter examines the relationship between firm-level technological advancement (as proxied by research and development investment) and firms' HRM practices for high-skill workers in a high-tech industry, and discusses how this relationship is connected to firm performance. It proposes a mechanism connecting technology and HRM practices at the firm level that links the skill bias and the organization change approaches. Using a make-versus-buy model of workforce skill adjustment, it explores whether the firm's choice of HRM system affects its ability to adjust worker skill levels to maximize the value of their technological investments. The chapter utilizes data from the Longitudinal Employer-Household Dynamics program and focuses on three dozen firms in the semiconductor industry.
Keywords: human resource management, research and development, firms, high-skill workers, semiconductor industry, worker skill, make-versus-buy model, organizational change, firm performance, technological investments
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