If HPWPs Are Good for Performance, Why Don't More Firms Use Them?

Prior research shows that high performance work practices (HPWPs) have a demonstrable impact on firm performance. These effects have been shown for both large and small firms, across industries and different national settings, and using a wide variety of performance metrics. Paradoxically, relatively few firms adopt HPWPs - providing the primary motivation for this study: if HPWPs are good for performance, why dont more firms use them? Using data drawn from Australian manufacturers we identify external and internal factors that facilitate and inhibit the adoption of HPWPs. Our estimates are robust across a range of estimation approaches. We provide suggestions for the development of a more theoretically informed model of HPWP adoption that explains the apparent paradox.