Boundary Conditions of the High-Investment Human Resource Systems-Small-Firm Labor Productivity Relationship

Although a few published, multiindustry, firm‐level, empirical studies have linked systems of high‐investment or high‐performance human resource management practices to enhanced small‐firm performance, this stream of strategic human resource management research is underdeveloped and equivocal. Accordingly, in this study, we use a sample of for‐profit, private‐sector, small Canadian firms with fewer than 100 employees from a variety of industry sectors to examine boundary conditions of the relationship between firm‐level high‐investment human resource systems and objective small‐firm labor productivity. Congruent with contingency theory, this study's results indicate that the extent and nature of the influence of high‐investment human resource systems on objective small‐firm labor productivity is contingent on internal (differentiation strategy and firm capital intensity) and external boundary conditions (industry dynamism and industry growth). Implications and limitations of this research study as well as avenues for future research are discussed.