High-performance work practices, socioemotional wealth preservation, and family firm labor productivity^*

Abstract

Despite growing research on the effect of high-performance work practices (HPWPs) on family firm performance, the implications of socioemotional wealth (SEW) preservation remain ambiguous. This stems from SEW preservation being used primarily as an explanatory construct and assessed indirectly rather than directly in empirical studies. To address this research gap, we draw upon organizational control and signaling theories to determine the “true” interaction between HPWPs and SEW preservation for labor productivity. Specifically, competing hypotheses are presented to determine if this interaction supports complementarity or substitutability. Using a sample of 124 Spanish family firms and a direct measurement of SEW preservation, our results provide support for substitutability, suggesting that family firms can realize higher labor productivity when HPWPs are fully implemented and commitment to SEW preservation is low, and vice versa. These findings have important implications for family firms, given HPWPs’ inverse relationship with SEW preservation regarding labor productivity. JEL CLASSIFICATION J24, L20, L21, L26, M12_M12, M54_M54, O15

Socioemotional wealth and human resource policies: effects on family firm performance

“…In this vein, we extend the empirical exploration of SEW and its impact on financial performance (Berrone et al, 2012;Craig and Newbert, 2020;Debicki et al, 2017) and the mediating role that HRM choices play in that relationship (G omez-Mej ıa et al, 2011). As such, we contribute to the debate on family firm heterogeneity (Chua et al, 2012) and the effectiveness of HRM policies in the family business context (Hern andez-Perlines et al, 2021;Neckebrouck et al, 2018). Second, we also contribute to the HRM literature by adopting an alternative theoretical approach to provide a better understanding of vertical fit in HRM (Kehoe, 2021).…”

“…We focus on these policies because they are considered a well-known coordinated bundle of economically oriented human resource (HR) policies that may help improve family firm performance (Bello-Pintado and Garc es-Galdeano, 2019; Dekker et al, 2015;Posthuma et al, 2013). Despite this relevance, there is scant empirical evidence about how HPWPs mediate the relationship between family influence, in terms of SEW preservation and firm financial performance (Hern andez-Perlines et al, 2021).…”

“…However, this concern remains unclear. Recent studies suggest that family firms could fully implement HPWPs, but only when they have a low commitment to SEW preservation (Hern andez-Perlines et al, 2021). Alternatively, some scholars argue that the use of formal HR approaches can find greater acceptance when there is a greater risk of further economic deterioration and the owning family sees its SEW as compromised (Cruz et al, 2011;G omez-Mej ıa et al, 2011), but this relationship has not yet been empirically tested.…”

Leadership in special contexts: Introduction to the special issue

“…On the other hand, in the study titled "Women ownership as a form of leadership: The role of context in understanding its effects on financial performance," Orozco Collazos and Botero (2024) choose as study context Colombia, a country whose society is highly masculine and where there exits not laws or incentives that promote gender equality in the private sector (Orozco Collazos & Baldrich, 2020;Orozco Collazos & Botero, 2024). Specifically, Orozco Collazos and Botero ( 2024) analyze the relationship between women ownership and financial performance of Colombian private small and mediumsized enterprises (SMEs) and the moderating role of a context as unique as the family firm (Berrone et al, 2012;Domańska et al, 2023;Hernández-Linares et al, 2023;Hernández-Linares & López-Fernández, 2020) in this relationship. Authors explore these relationships by using multiple regression analysis with data retrieved from secondary databases.…”

Organizational Culture and Performance-Based Compensation in Family Firms: Does Family Involvement in Management Matter?

“…From the family business literature, a stream of research has shown that HR policies, including performancebased compensation, constitute a concrete manifestation of family influence (Hernández-Linares et al, 2021;Peláez-León & Sánchez-Marín, 2023;Steijvers et al, 2017). More specifically, when there is more of the owning family in management, performance-based compensation policies are better accepted due to the family's desire to express a sense of consistency and fairness for all employees (Steijvers et al, 2017).…”