1. Individual Human Resources Practices Affecting Firm Performance Compensation Broad-based stock options Incentive-based compensation Profit sharing Diversity Minority hiring during downturns HR PracticesPositive Performance Effects Employment Countercyclical hiring Downsizing (employment and assets) Early retirement programs Employment security Human resource outsourcing Productivity (lagged), growth Performance relative to industry (P), sales and customer satisfaction (in upscale markets) ROA, ROE, shareholder returns, survival Shareholder returns ROA Shareholder returns (with good returns prior to announcement) Financial performance (P), innovation (P) ROA

2. Individual Human Resources Practices Affecting Firm Performance Industrial Relations Decertification elections (union retained) Positive labor relations (unionism) Strikes (11-29 days) Internal Labor Market Internal career opportunities HR PracticesPositive Performance Effects Motivation Decentralized decision making Open-book management Participative decision making High-performance work teams Reduced status differentials Shareholder returns Productivity Shareholder returns ROA (prospectors), ROE (prospectors) Operational outcomes (P) Numerous reports of goals obtained (A) ROA (defenders), ROE (defenders) Quality, labor productivity High-performance firm adoptions (A)

3. Individual Human Resources Practices Affecting Firm Performance Performance Management Results-oriented appraisals Staffing Cognitive tests HR PracticesPositive Performance Effects Training Selectivity Succession of “outsider” CEOs Structured interviews Validation studies WABs and BIBs Yield analysis of recruiting sources Training ROA Profit, sales growth, overall performance Performance relative to industry (P) ROA (with low firm diversification) Profit, profit growth Profit, profit growth, overall performance Profit, overall performance Sales growth Performance relative to industry (P), productivity

4. Challenges of a Diverse Workplace Impact on Work Groups –More creativity and innovation –Less Cohesion –Potential increase in conflict Impact on the individual employee –Bias in evaluation –More difficulty in developing and maintaining professional relationships –Less satisfaction with the job –Higher rates of turnover