Human resource management, complementarity and organisational performance

A feature of public sector organisations is the presence of substantial variations in productivity. What drives organisational productivity and its persistence? Using a rich panel on NHS hospitals in England, we trace the variation in productivity back to differences in clusters of complementary management practices. We introduce the indeterminacy effect of management practices, provide systematic evidence on the non-linearity effect and the complementarity effect of the practices, and identify several practically significant clusters of management practices involving incentives, workplace flexibility, job training, team quality and job design. The complementary character of management practices explains why low performing organisations remain low performing over time