High and Low Road approaches to the management of Human Resources: an examination of the relationship between Business Strategy, Human Resource Management and High Performance Work Practices

The Contingency approach to human resource management leads to the hypothesis that High Performance Work Practices (HPWP), which focus on the soft HRM strategy of Developmental Humanism, are more compatible with ‘High Road’ business strategies that emphasize product differentiation through quality and innovation More traditional human resource management, which is focussed on Utilitarian Instrumentalism and Numerical Flexibility, is better suited to ‘Low Road’ business strategies that emphasise cost control and competition based primarily on price. To date most research on HPWP has only examined the direct relationship between practices and performance outcomes and, whilst the link between HPWP and organizational performance has been established, the mechanics of the linkages are considered a ‘black box’ with empirical and theoretical gaps. Using data collected from a sample of 179 large Australian workplaces we tested the contingencies that influence HPWP implementation and impact. Our results support the Contingency approach in that High Road organizations are more likely to adopt HPWP and the Universal approach in that both High and Low Road organizations derive equal benefit from the implementation of HPWP. High Road organizations may be more likely to adopt HPWP because they see more benefit from their introduction or they may find it easier to implement HPWP because they have a less prohibitive union presence, a theory Y management attitude and a longer-term time horizon