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) are more compatible with 'High Road' business strategies that emphasize product differentiation through quality and innovation. More traditional human resource management is better suited to 'Low Road' business strategies that emphasise cost control and competition based primarily on price. 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 organisations are more likely to adopt HPWP and the Universal approach in that both High and Low Road organisations derive equal benefit from the implementation of HPWP. High Road organisations 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.