Publication Date

March 2007


In this study, we look at the effects of three HR practice strategies on firm performance and examine potential differences in effects across industries. Overall, we found that employee selection based on person-organization fit, workforce management following a involvement strategy, and employee management and retention practices based on creating a family-like environment were all positively related to revenue growth, profit growth, and employee retention across when looking at all of the companies in the sample. We also found that the three HR strategies were related to higher firm performance when looking at each of the four individual industries in our study. We were surprised to find that the effects of these HR practice strategies were larger in both the retail and low-skilled services industries compared to the professional services and manufacturing industries. We were particularly surprised by these results because much of the popular press writing and conventional wisdom regarding HR practices has stressed the need to manage professional and highly skilled employees because they are potentially harder to find and retain. The specific results for each of the four industries are reported and discussed in the report as are the key takeaways for the study as a whole.


Suggested Citation
Collins, C. (2007). Research report on phase 5 of Cornell University/Gevity Institute Study: Human resource management practices and firm performance in small businesses: A look at differences across industries (CAHRS Working Paper #07-10). Ithaca, NY: Cornell University, School of Industrial and Labor Relations, Center for Advanced Human Resource Studies.