Linkages between high-performance work practices and family-centered goals: implications for financial performance in family firms

Abstract

Purpose This study explores what impact high-performance work practices (HPWP) – from the ability-motivation-opportunity (AMO) framework – might have on financial performance among family firms and examines the mediating role played by family-centered goals (FCGs). Design/methodology/approach The empirical approach is based on data collected from a sample of 339 Spanish small and medium-sized family enterprises operating in the industry and service sectors. To test the hypotheses, this paper applies a path analysis modeling tool to estimate both indirect and direct effects in mediator models. Findings The results indicate that the AMO framework has a significant impact on financial performance through the lens of FCGs. In addition, family businesses' keen concern to preserve family wealth influences the effectiveness of HPWPs, making firms more socioemotionally oriented at the expense of economic impact. Research limitations/implications This paper underscores the importance of integrating family aspirations into strategic human resource management (HRM) design, emphasizing the significance of socioemotional wealth (SEW) preservation. Practical implications The findings offer practical insights for family managers, family owners and human resource (HR) practitioners, suggesting the need to align HR practices with family goals and to strategically balance socioemotional and financial wealth considerations. Family owners in key management positions must skillfully manage HR strategies in order to harmonize family and firm goals. Originality/value By examining the mediating effect of FCGs, this paper advances and extends SEW theory in the context of HRM by considering the relationships between HR practices and firm performance as a mixed gamble approach.