Linking socioemotional wealth, human resource management, and performance in family firms

Abstract

This doctoral Dissertation aims to increase understanding of human resource management (HRM) in family firms through a systematic literature review and two empirical studies developed with the specific purposes of (1) providing a comprehensive overview of the theoretical and empirical findings about HRM in the context of family businesses, (2) analyzing how and under which circumstances non-financial goals of the owning family - in terms of socioemotional wealth (SEW) - might affect the use of high-performance HR policies, and (3) analyzing whether and how the use of these policies could mediate the relationship between non-financial goals of the owning family and firm financial performance. The systematic review provides a better understanding of how HRM has been studied and defined in the context of family businesses, the different policies and practices that have prevailed when scholars have studied HRM in family firms, as well the predictors and outcomes that have been linked to HR policies and practices in this kind of business. Further, this review highlights the gaps in our understanding in this field and provide insights for future research. The two empirical studies are based on two cross-sectional samples of private and medium-sized Spanish family firms in high-risk conditions. The results obtained at the first empirical study suggests family firms might use a high-performance work system (HPWS) as a mechanism to preserve their SEW when they face higher risk circumstances. Results also suggested that a higher level of participation of family members in management and a family CEO effectively increase the positive effect of SEW preservation on the use of HPWSs in family firms in this context. Contrary to expectations, the strongest influence on the relationship between SEW and HPWS is found in second-generation family firms, not first-generation. Lastly, the results obtained at the second empirical study indicates that the influence of non-financial goals in family firms (i.e., SEW) has on financial results is completely mediated by some strategic HRM choices. Even though a positive and significant effect of the importance given to preserve SEW on the use of HPWPs is supported, only HR policies focus on training and motivational dimensions play a role in the relationship between SEW preservation and financial performance in high-risk contexts. Contrary to expectations, selection and opportunities HR policies have not significant mediation in this relationship in family businesses. Overall, this doctoral Dissertation contributes to the literature on HRM and family business fields by providing a major understanding of HRM in the idiosyncratic context of family firms. On the practical side, this Dissertation can help family business practitioners identify and manage relevant constraints and challenges that they can face their decision-making about HRM issues.