Time-Lag Effects of Introducing HR Practices in Small and Midsize Companies

Abstract

This study aims to conduct an exploratory analysis of the effects of introducing HR practices in small and midsize companies, based on a company survey. Statistical analysis based on the timing of their introduction suggests that most HR practices are not effective immediately, but rather only after a certain period of time (delayed impact). Neither labor nor management are able to make use of new practices straight away, thus it can be inferred that they take gradual effect as a result of organizational learning. In addition, this paper examines why even HR practices with recognized “delayed impact” have not been adopted by small and midsize companies. One interpretation is that there is a lack of long-term vision for HR practices. Another is that smaller firms understand their potential impact, but cannot afford to plan for the long run due to cost and limited human resources. Finally, the potential benefits to such companies from considering these improvements are proposed.