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Socioemotional wealth and human resource policies: effects on family firm performance

Socioemotional wealth and human resource policies: effects on family firm performance This study analyses whether human resource management (HRM), through the use of four sets of high-performance work policies (HPWPs) (i.e. selection, training, motivation and opportunity policies), mediates the relationship between socioemotional wealth (SEW)—defined as a unique set of nonfinancial family goals—and firm financial performance when family firms face a high-risk context.Design/methodology/approachHypotheses were statistically tested using a structural equation modeling (SEM) methodology with a cross-sectional sample of 196 medium-sized and private family firms in a high-risk context in Spain.FindingsThe results indicate that the relationship between SEW and financial performance in family firms is fully mediated by the use of HPWPs, especially by training and motivation HR policies. The importance given to preserving SEW influences the use of four sets of HPWPs when family firms show clear evidence of being confronted by a financial decline (i.e. a high-risk context). However, to improve their financial results to avoid the firm's failure and thus the loss of their SEW, only those HR policies that focus on training and motivation made a significant and positive contribution to the firm financial performance.Originality/valueThis study contributes to the literature on family firms and HRM by adopting an alternative theoretical framework to understand how the importance of nonfinancial family goals may affect employee structures and management policies, thereby improving financial performance in family firms. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Entrepreneurial Behaviour & Research Emerald Publishing

Socioemotional wealth and human resource policies: effects on family firm performance

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1355-2554
DOI
10.1108/ijebr-05-2021-0404
Publisher site
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Abstract

This study analyses whether human resource management (HRM), through the use of four sets of high-performance work policies (HPWPs) (i.e. selection, training, motivation and opportunity policies), mediates the relationship between socioemotional wealth (SEW)—defined as a unique set of nonfinancial family goals—and firm financial performance when family firms face a high-risk context.Design/methodology/approachHypotheses were statistically tested using a structural equation modeling (SEM) methodology with a cross-sectional sample of 196 medium-sized and private family firms in a high-risk context in Spain.FindingsThe results indicate that the relationship between SEW and financial performance in family firms is fully mediated by the use of HPWPs, especially by training and motivation HR policies. The importance given to preserving SEW influences the use of four sets of HPWPs when family firms show clear evidence of being confronted by a financial decline (i.e. a high-risk context). However, to improve their financial results to avoid the firm's failure and thus the loss of their SEW, only those HR policies that focus on training and motivation made a significant and positive contribution to the firm financial performance.Originality/valueThis study contributes to the literature on family firms and HRM by adopting an alternative theoretical framework to understand how the importance of nonfinancial family goals may affect employee structures and management policies, thereby improving financial performance in family firms.

Journal

International Journal of Entrepreneurial Behaviour & Research – Emerald Publishing

Published: Jan 20, 2022

Keywords: Family firms; Human resource management; Socioemotional wealth; Financial performance

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