High Performance Work Practices (HPWP) in Malaysian R&D Organizations

Abstract

There is a critical need to enhance the quality of R&D workforce in Malaysia. To address this problem, the 10th Malaysia Plan (2011-2015) and the New Economic Model (NEM) both stress the need to enhance human capital development in the country's innovation capacity. Managing R&D is a different experience compared to other industries due to its distinct set of people and culture. Thus, R&D organizations need to implement high performance work practices (HPWP) to increase productivity and effectiveness. Studies have shown that there is a positive link between HPWP and innovation. Nevertheless, there exists a knowledge gap in the area of HPWP in Malaysia. Hence, this paper intends to examine the concept of HPWP within the context of R&D organizations. A review of literature will be used to theorize about how HPWP will influence R&D performance. 

The Financial Impact of High-Performance Work Practices

“…Thus, we found support for our Hypothesis 3, that HPWP more positively affects financial performance in settings of low labor market flexibility. We have argued that the more formal institutional pressures help ensure that more successful "bundles" of work practices are adopted, rather than individual practices being adopted piecemeal, leading to higher benefit from these practices (Asmawi & Chew, 2016;Combs et al, 2006;Huselid, 1995). Similar to what was found by Ahmed et al (2016), this indicates that the freedom from formal regulation that companies might covet might not benefit all companies.…”

“…Similar to what was found by Ahmed et al (2016), this indicates that the freedom from formal regulation that companies might covet might not benefit all companies. The legal requirements that push companies toward HPWP as a standard practice allow them to adopt a complete, profitable bundle of HPWP (Asmawi & Chew, 2016;Combs et al, 2006;Huselid, 1995). While it may seem odd, or even counterintuitive, to suggest in a management journal that businesses will benefit from more government oversight, our findings suggest that, at least with respect to HPWP, more regulation increases the value of HPWP.…”

“…In nations with strong formal institutionslow labor market flexibilitya stable formal institutional framework limits top management teams' ability to make the more unwise adhoc decisions that they might otherwise make. As a result, adoption of HPWP is more likely to entail the complete "bundle" that engages employees and has been found to be more financially beneficial (Asmawi & Chew, 2016;Combs et al, 2006;Schneider et al, 2018). Our findings could indicate that HPWP stands out more to internal and external stakeholders in markets with less labor market flexibility, providing reputational benefits that are harder to achieve in settings where such practices are normal (c.f., Su, Peng, Tan, & Cheung, 2016).…”

“…While there is disagreement regarding the specific practices to be included in the configuration of HPWP (Obeidat et al, 2016), there are three main areas of HPWP: (1) people-flow and skills, such as job security and training, (2) appraisal and rewards, and (3) employment relations, such as worker participation and job design (Sun et al, 2007). These three areas of the HRM system support one another to create a high-performance work system -meaning that a complete "bundle" of practices covering these three areas (Obeidat et al, 2016) is needed to reap the full benefit (Asmawi & Chew, 2016;Combs et al, 2006). HPWP help companies identify and train the right employees (enabling greater diversity through a stronger focus on ability), retain good employees, and assure continued investment in and engagement of employees (Schneider et al, 2018;Sun et al, 2007).…”

“…Of critical importance in the area of HPWP in particular, however, is that highperformance practices fit together as a bundle or system (Asmawi & Chew, 2016;Combs et al, 2006) and, in combination, have the effect that they do. Past research has shown that institutional context can affect the variety of HPWP adopted by firms in a particular country.…”