the effect of human resource management practices on the job retention of former welfare clients

21
Introduction C hanges in legislation in the United States have had significant effects on former welfare clients. The federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. No.104-193) decreased welfare support and encouraged movement from welfare to work. To reflect this philosophi- cal change, the public welfare program “Aid to Families with Dependent Children” (AFDC) was retitled “Temporary Assistance to Needy Families” (TANF). The Workforce Investment Act of 1998 further shifted phi- losophy in relation to welfare-to-work strategies. While education and training were an integral aspect of the 1996 legisla- tion, the focus is now on “rapid attach- ment” to the workforce and a “work first” philosophy. The premise is that education and training should take a backseat to work itself (Strawn, 2001), though many former welfare clients have no formal work experi- ence. This puts a tremendous burden on for- mer welfare clients and their families, and THE EFFECT OF HUMAN RESOURCE MANAGEMENT PRACTICES ON THE JOB RETENTION OF FORMER WELFARE CLIENTS JOHN R. DECKOP, ALISON M. KONRAD, FELICE DAVIDSON PERLMUTTER, AND JOSHUA L. FREELY Why should an employer hire a former welfare client? What human resource management practices can help employers retain former welfare clients? This study addresses these questions against the backdrop of changes in welfare legislation in the United States that have lessened support to welfare clients and their families and emphasized movement into the workplace. We conducted a large-scale empirical study of the effectiveness of a wide range of HRM practices and found that higher wages, better financial and health benefits, and development opportunities were positively associated with job retention. Unexpectedly, supervisory training had no relationship to reten- tion, and appraising supervisors on providing a supportive and inclusive work environment showed a negative relationship. We provide suggestions to employers for improving the job retention of former welfare recipients along with directions for additional research. © 2006 Wiley Periodicals, Inc. Correspondence to: John R. Deckop, Associate Professor, Department of Human Resource Management (006-00), Temple University, Philadelphia, PA 19122, Phone: (215) 204-1933, Fax: (215) 204-8362, E-mail: [email protected] Human Resource Management, Winter 2006, Vol. 45, No. 4, Pp. 539–559 © 2006 Wiley Periodicals, Inc. Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/hrm.20131

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Page 1: The effect of human resource management practices on the job retention of former welfare clients

Introduction

Changes in legislation in the UnitedStates have had significant effects onformer welfare clients. The federalPersonal Responsibility and WorkOpportunity Reconciliation Act of

1996 (P.L. No.104-193) decreased welfaresupport and encouraged movement fromwelfare to work. To reflect this philosophi-cal change, the public welfare program “Aidto Families with Dependent Children”(AFDC) was retitled “Temporary Assistance

to Needy Families” (TANF). The WorkforceInvestment Act of 1998 further shifted phi-losophy in relation to welfare-to-workstrategies. While education and trainingwere an integral aspect of the 1996 legisla-tion, the focus is now on “rapid attach-ment” to the workforce and a “work first”philosophy. The premise is that educationand training should take a backseat to workitself (Strawn, 2001), though many formerwelfare clients have no formal work experi-ence. This puts a tremendous burden on for-mer welfare clients and their families, and

THE EFFECT OF HUMAN

RESOURCE MANAGEMENT

PRACTICES ON THE JOB

RETENTION OF FORMER WELFARE

CLIENTS

J O H N R . D E C K O P, A L I S O N M . K O N R A D , F E L I C ED AV I D S O N P E R L M U T T E R , A N D J O S H U A L . F R E E LY

Why should an employer hire a former welfare client? What human resourcemanagement practices can help employers retain former welfare clients?This study addresses these questions against the backdrop of changes inwelfare legislation in the United States that have lessened support to welfareclients and their families and emphasized movement into the workplace. Weconducted a large-scale empirical study of the effectiveness of a wide rangeof HRM practices and found that higher wages, better financial and healthbenefits, and development opportunities were positively associated with jobretention. Unexpectedly, supervisory training had no relationship to reten-tion, and appraising supervisors on providing a supportive and inclusivework environment showed a negative relationship. We provide suggestionsto employers for improving the job retention of former welfare recipientsalong with directions for additional research. © 2006 Wiley Periodicals, Inc.

Correspondence to: John R. Deckop, Associate Professor, Department of Human Resource Management (006-00),Temple University, Philadelphia, PA 19122, Phone: (215) 204-1933, Fax: (215) 204-8362, E-mail: [email protected]

Human Resource Management, Winter 2006, Vol. 45, No. 4, Pp. 539–559

© 2006 Wiley Periodicals, Inc.

Published online in Wiley InterScience (www.interscience.wiley.com).

DOI: 10.1002/hrm.20131

Page 2: The effect of human resource management practices on the job retention of former welfare clients

540 HUMAN RESOURCE MANAGEMENT, Winter 2006

suggests that human resource managementpolicies that have the effect of facilitatingand supporting this transition will be crucialto its success.

Research subsequent to these policychanges has indicated that many welfareclients have substantial difficulty retainingtheir jobs (Rangarajan & Novak, 1999; Stell-mack, Wanberg, & Kammeyer-Mueller,2003). A variety of factors are associatedwith the job retention of former welfareclients, including employee characteristics,

such as previous work experienceand number of children (e.g.,Stellmack et al., 2003), educationand race (Holzer & Stoll, 2001),firm characteristics (e.g., Lane &Stevens, 2001), economic condi-tions (e.g., Holzer, 2000), varia-tions in welfare policy (e.g.,Bloom, Hill, & Riccio, 2003;Knox, Miller, & Gennetian,2000), and the effects of pro-grams provided by publiclyfunded contractors external tothe employing organization(e.g., Philadelphia Workforce De-velopment Corporation, 2000).

The effects of firm-level HRMpractices on the job retention offormer welfare clients have re-ceived less attention. While theissue has been investigated from acase study perspective by organi-zations such as the Welfare toWork Partnership and the Societyfor Human Resource Manage-ment (SHRM; Leonard, 1998),and through studies specifying alimited range of HRM practices(e.g., Holzer, Stoll, & Wissoker,2001, who examined promotionopportunities and health bene-

fits), there has yet to be a rigorous, large-scaleempirical study of the effects of a broadrange of HRM practices on the job retentionof former welfare clients. We obtained dataon HRM practices from 305 employers iden-tified as having hired welfare clients betweenMay 2000 and October 2001 in the Philadel-phia, Pennsylvania, metropolitan area. We

linked those data to job-retention data col-lected and verified by an independent or-ganization contracted by the PennsylvaniaDepartment of Public Welfare.

This study makes two contributions toexisting research. First, unlike most previ-ous research, we link retention to a broadset of HRM practices, including compensa-tion, benefits, training, advancement, su-pervision, workplace flexibility, and theprovision of dependent care assistance, for alarge number of employers. Examining awide variety of practices is important forensuring that findings are not wrongly at-tributed to actions that are ineffective butthat co-occur with effective activities notmeasured in the study.

Second, unlike previous work (e.g.,Holzer et al., 2001), this study utilizes reten-tion data that were collected and verifiedseparately from the data on employer prac-tices. The use of separate source data is criti-cal to drawing valid conclusions about reten-tion because this information is not subjectto survey respondents’ inclinations to selec-tively present the best experiences they havehad with employing former welfare clients.

Why Hire Former Welfare Clients?

Welfare clients face many barriers to em-ployment, including low levels of education,the need to combine work with significantcare-giving responsibilities, and lack of reli-able transportation (Blumenberg, 2002;Meyer, 1999). Given these difficulties, it isnot obvious why employers should hire fromthis population. In answer to this question,Cappelli (2000) pointed out that hiringworkers who are not in high demand, suchas former welfare clients, is likely to produceretention benefits because competitors areunlikely to try to bid these employees away.

Hiring and retaining workers who do notperform well is not a value for employers,however, and organizations can only hire wel-fare clients if their job performance is ade-quate. Fortunately, studies have shown thatthe job performance of former welfare clientsmay be equal to or better than their counter-parts. A study of 500 employers indicated that

Welfare clients face

many barriers to

employment,

including low levels

of education, the

need to combine

work with significant

care-giving

responsibilities, and

lack of reliable

transportation. Given

these difficulties, it is

not obvious why

employers should

hire from this

population.

Human Resource Management DOI: 10.1002/hrm

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The Effect of Human Resource Management Practices on the Job Retention of Former Welfare Clients 541

most had favorable views of former welfareclients as potential employees. Those that hadhired former welfare clients in the past hadmore positive views than others (Meyer, 1999),suggesting that their experiences with thispopulation had been positive. In a study of696 employers who had hired former welfareclients, 84% indicated that the performance ofthese employees was the same or better thanothers (Holzer, Stoll, & Wissoker, 2004).

Another response to the question of whyemployers should hire welfare clients is thatthey have a responsibility to society to do so.A broader stakeholder perspective that ex-plicitly considers the impact of business de-cisions on all affected parties is necessary toreflect changes in the social contract affect-ing employment relations (Kochan, 1999).Legislation has reduced governmental sup-port and pre-employment job training forwelfare clients, leaving a critical gap thatmust be filled. Even if the financial value-added benefit of hiring former welfare clientsis not obvious to an employer, the maxi-mization of shareholder profits should notbe the only or even prime considerationfrom a stakeholder perspective.

Hiring Alone Is Not Enough

Women on welfare see steady employment asthe means for lifting their children and them-selves out of poverty (Monroe & Tiller, 2001).Yet many welfare clients take positions infood services, retail sales, clerical, privatehousekeeping, building cleaning and mainte-nance, production and manufacturing, andpersonal service that pay low wages, lack ben-efits, and offer limited growth opportunities(Cancian & Meyer, 2000; Johnson & Corco-ran, 2003). A nationally representative studyindicated that the median wage received byformer welfare clients was $6.61 per hour andthat only 23% received employer-providedhealth insurance (Loprest, 1999). Another na-tionally representative study showed thatduring the first five years after leaving thewelfare rolls, only 15% of former welfareclients earned $7.50 per hour or more on aconsistent basis, and 51% never earned awage that high (Cancian & Meyer, 2000).

Low-quality jobs can reduce the abilityof these workers to move out of povertyand stay off of welfare. Strawn, Greenberg,and Savner (2001) summarize findingsfrom three policy institute studies showingthat when individual character-istics were controlled, formerwelfare clients who receivedhigher wages, health care bene-fits, and paid vacation time re-mained employed longer. Allthree of these factors are likelyto motivate job retention amongformer welfare clients. Beliefthat a goal is achievable is an es-sential component of theories ofmotivation (Van Eerde &Thierry, 1996), and for formerwelfare clients striving toachieve self-sufficiency, higherwages and health benefits en-hance the perception that em-ployment will allow them toachieve that goal. Paid vacationtime motivates former welfareclients to remain employed atleast until they are able to claimthis benefit, usually a year afterthe initial hire.

Beyond wages and benefits, former wel-fare clients may need support for managingthe competing demands of paid work andcare-giving responsibilities. For single moth-ers in low-wage jobs, finding and paying forchild care of adequate quality can pose a sub-stantial barrier to job retention (Monroe &Tiller, 2001). A study of the 22,552 womenon TANF showed that net of several other in-dividual and situational factors, the presenceof young children was negatively associatedwith the ability to get off of welfare in threeyears (Cancian, Meyer, & Wu, 2005). Holzeret al. (2004) found that 41% of employerswho had hired welfare clients indicatedproblems with absenteeism, mostly due tochild care issues. Absenteeism leads to sepa-ration from the employer (Holzer et al.,2004), and failure to build a track record ofcontinuous employment reduces earningsfor former welfare clients (Cancian & Meyer,2000; White & Geddes, 2002). These find-

…former welfare

clients who received

higher wages, health

care benefits, and

paid vacation time

remained employed

longer. All three of

these factors are

likely to motivate job

retention among

former welfare

clients.

Human Resource Management DOI: 10.1002/hrm

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542 HUMAN RESOURCE MANAGEMENT, Winter 2006

ings indicate that hiring welfare clients is notenough to lift them out of poverty. In orderto attain that goal, welfare clients must re-tain their jobs over the longer term.

Retaining Former Welfare Clients

Job retention is not easy for former welfareclients. Although employment rates of formerwelfare clients have grown substantially sincewelfare reform in 1996 (Bavier, 2002; Loprest,1999; White & Geddes, 2002), job retentioncontinues to be an issue. A study of 96,307

women with children who werewelfare clients in Wisconsin in1990 showed that only 65% of thisgroup had held a job sometimeduring 1998, and only 71% ofthese workers, or 46% of the total,were employed in all four quartersof that year (White & Geddes,2002). A study of a nationally rep-resentative sample of former wel-fare clients found that five yearsafter leaving welfare, only 25%were working full-time for the fullyear (Cancian & Meyer, 2000).

Studies covering a broad rangeof employers and employees have shown thatkeys to employee retention include holding ajob that is satisfying with high-quality super-vision and advancement opportunities (Grif-feth, Hom, & Gaertner, 2000). But whyshould employers provide such high-qualityjobs in order to retain welfare clients? Kossek,Huber-Yoder, Castellino, and Lerner (1997)suggested that employers should assist low-wage employees for three reasons: (1) to in-crease these employees’ discretionary incomeas consumers, (2) to improve the public imageof the company, and (3) to improve cus-tomers’ experiences with low-wage workers.

In addition to enhancing retention, pro-viding high-quality jobs might be a relativelycost-effective mechanism for employers to at-tain high performance from employees in rou-tine jobs. The efficiency wage perspective sug-gests that high-quality jobs can motivate highperformance because employees wish to retainjobs that are superior to the alternatives avail-able to them in the labor market (Bamberger &

Meshoulam, 2000, MacDuffie, 1995). Al-though performance in jobs such as the oneslikely to be held by former welfare clients canbe monitored through close supervision, su-pervisors are costly and interpersonal conflictscan arise if employees interpret supervisor be-havior negatively (Testa & Ehrhart, 2005).From a customer perspective, the ability to fos-ter high performance and retain effectiveentry-level workers may be particularly advan-tageous in labor-intensive industries wheremuch direct service is conducted by workers atthe lowest level, such as child care or nursinghome care (Kane, 2004).

HRM Practices for Retaining FormerWelfare Clients

To retain former welfare clients, employersmust reduce both involuntary and voluntaryseparations. Involuntary separations resultfrom poor performance or from unreliabilitydue to work-family conflicts or transporta-tion problems (Holzer et al., 2001; Perlmut-ter, 1997). Voluntary separations result frombetter opportunities offered by other em-ployers (Johnson & Corcoran, 2003) or fromstrains on the worker arising from compet-ing work and family demands (Holzer et al.,2001). In the latter case, the individual andsociety, if not the employer, may benefit. Inthe former case, no one is better off.

Reducing involuntary separations re-quires effective controls for performance. Re-ducing voluntary separations requires thatemployers provide incentives, includingcompetitive wage and benefit packages aswell as growth and development opportuni-ties. Supports that allow employees to man-age work-family conflicts and attend workreliably may reduce both voluntary and in-voluntary separations. Next, we discuss con-trol mechanisms, incentives, and workplacesupports likely to enhance job retention forformer welfare clients.

Control Practices

A variety of HRM practices relate to the goalof ensuring that employees provide reliableand adequate job performance. To affect re-

But why should

employers provide

such high-quality

jobs in order to

retain welfare

clients?

Human Resource Management DOI: 10.1002/hrm

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The Effect of Human Resource Management Practices on the Job Retention of Former Welfare Clients 543

tention, control practices should focus onensuring that former welfare clients performat a level sufficient to avoid termination bytheir organizations. Based on previous re-search (Bamberger & Meshoulam, 2000),these practices fall into three categories:training, feedback, and reward.

Job Training

Workers benefit from job training in manyways. Lengermann (1996) showed thattraining increased employees’ hourly earn-ings and their hours of work, suggestingthat training facilitates the attachment nec-essary for successful job retention. Formany of the former welfare clients in ourstudy, the job reported in our data is likelyto be their first formal employment experi-ence. Job training may be especially criticalif employees have not learned basic skills inother employment. In addition to technicaljob training, former welfare clients in par-ticular benefit from instruction on work-context issues such as accepting direction,working in teams, and conflict resolution(Glazier, 2000; Leonard, 1998). Job trainingof former welfare clients is also one HRMpractice that has received extensive researchattention, and has been shown to be effec-tive in enhancing retention (Perlmutter,1997). Thus:

Hypothesis 1: Job training will be positively as-sociated with worker retention.

Feedback

Providing regular feedback on performancecould enhance job retention for former wel-fare clients, because this information allowsthe employee to correct problems. Holzer etal. (2001) found that former welfare clientswith retention problems often had perform-ance problems on the job, so early correctivefeedback from supervisors might improve re-tention among this population.

Regular feedback might be negatively re-lated to retention, however, for two reasons.First, supervisors who provide regular feed-back may be more aware of performance

problems and might fire poor performers ear-lier because they have documented evidenceof poor performance along with their at-tempts to assist the employee. Second, em-ployees might develop resentment from fre-quent corrective feedback, particularly ifthey attribute some of the responsibility forthe problem to the supervisor or to an unfairassessment of performance (Testa & Ehrhart,2005). Employees vary in their reactions tocorrective feedback (Smither, London, &Richmond, 2005), sometimes exhibitingnegative reactions, including poor perform-ance, perceptions of unfairness,anger, and aggression (Geddes &Baron, 1997; Kluger & DeNisi,1997). The result would be lowlevels of support for the decisionand the organization (Brockner,2002), possibly leading to volun-tary turnover, or further perform-ance problems, leading to invol-untary turnover.

In summary, there are baseson which to predict contradictoryeffects of feedback on job reten-tion. Thus, we will not specify adirectional hypothesis, thoughwe will investigate this issue em-pirically.

Reward

An organization’s financial reward systemcan affect both an employee’s job perform-ance and the desire to remain employed. Thepayment of “efficiency compensation,” orpay and financial benefits beyond the mini-mum necessary to induce employment, canhelp to ensure that employees remain moti-vated to engage in an acceptable level of ef-fort in order to retain the job (e.g., Bamberger& Meshoulam, 2000, MacDuffie, 1995). Em-pirical research has found evidence that effi-ciency compensation can reduce the ten-dency of the employee to “shirk,” whichincludes factors such as excessive absen-teeism and reduced job effort that often leadsto termination (Cappelli & Chauvin, 1991).For former welfare clients, the greater thecompensation, the more they are likely to

Supports that allow

employees to

manage work-family

conflicts and attend

work reliably may

reduce both

voluntary and

involuntary

separations.

Human Resource Management DOI: 10.1002/hrm

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544 HUMAN RESOURCE MANAGEMENT, Winter 2006

find employment with their current organi-zation attractive compared to both alterna-tive employment and to no job at all.

Hypothesis 2: Compensation, in the form ofwage and financial/health benefits, will bepositively related to job retention.

Supports and Incentives

Workplace supports and incentives enhanceemployee commitment to the workplace

(Tsui, Pearce, Porter, & Tripoli,1997). Commitment focuses onthe employment relationship andseeks to enhance perceptions oforganizational support amongemployees by demonstrating thatthe organization appreciates theemployee’s contributions andcares about the employee as anindividual (Rhoades & Eisen-berger, 2002). HRM practices de-signed to accommodate the em-ployee’s needs and to promotetheir longer-term developmentwithin the organization candemonstrate the kind of organiza-tional support welfare clientsneed in order to retain their jobs.

Accommodation

Employees with limited social,economic, and community re-sources for dependent care sup-

port present special needs that must be ac-commodated for job retention to occur. Givenresearch identifying lack of dependent caresupport as a major barrier to job retention forformer welfare clients (Lambert, 1999; Ran-garajan & Novak, 1999; Stellmack et al.,2003), examining employer-provided work-life benefits seems particularly important.

Previous research on family-friendlyHRM practices suggests that benefit bundlesare more effective for enhancing firm per-formance than are individual benefits (Perry-Smith & Blum, 2000). A significant range offamily-friendly benefits addresses a wider va-riety of needs and reflects an organizational

philosophy related to family-friendliness(Grover & Crooker, 1995; Perry-Smith &Blum, 2000). Previous research has found ev-idence that the presence of a wide range offamily-friendly benefits not only reducesturnover intentions, but also enhances theaffective commitment of the employee tothe organization (Grover & Crooker, 1995).

Hypothesis 3: The number of family-friendlybenefits offered by an employer will be posi-tively associated with job retention.

Effective supervision also may be crucialfor accommodating the adjustment needs ofentry-level workers (Leonard, 1998). Supervi-sory skills may be critical for focusing em-ployee efforts and correcting performanceproblems without arousing defensiveness,especially among employees who are new tothe workplace, such as many former welfareclients. Research has shown that employeesidentify several managerial behaviors thatdemoralize them and damage their produc-tivity (Testa & Ehrhart, 2005), and supervi-sory training is intended to prevent such be-haviors. Supervisor support may also beeffective for helping former welfare clientsmanage the complexities of combining workand family (Goff, Mount, & Jamison, 1990;Thomas & Ganster, 1995). As such, employ-ers who provide training to supervisors incommunication and support skills may reapbenefits in the form of employee retention.

Hypothesis 4: Supervisory training will be posi-tively associated with job retention.

Another way to ensure that former wel-fare clients receive supportive supervision isto appraise supervisors themselves on thisjob dimension. Not only will supervisorshave a direct incentive to develop a support-ive working environment, but it also maysignal a commitment from top managementon this important issue.

Hypothesis 5: Supervisor accountability for pro-viding a supportive working environment toemployees will be positively associated withjob retention.

Employees with

limited social,

economic, and

community

resources for

dependent care

support present

special needs that

must be

accommodated for

job retention to

occur.

Human Resource Management DOI: 10.1002/hrm

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The Effect of Human Resource Management Practices on the Job Retention of Former Welfare Clients 545

Development

Meta-analysis has shown that growth anddevelopment opportunities are positively as-sociated with employee retention (Griffethet al., 2000), and welfare clients respond sim-ilarly positively to opportunities for ad-vancement. Holzer et al.’s (2004) study of696 employers indicated that welfare clientsin jobs offering promotion opportunitieswere less likely to show absenteeism prob-lems or to be discharged, suggesting that ad-vancement opportunities motivate formerwelfare clients to work harder in order to re-tain their jobs. Although the authors con-trolled for high school education and workexperience, this finding could be due to se-lection biases where better-quality workersare chosen for jobs with advancement op-portunities. Our study includes superior con-trols for worker quality to rule out selectionbiases more persuasively.

Organizations that offer developmentopportunities, such as written performancegoals, career planning, and a mentoring sys-tem, provide hope for advancement to bet-ter-paying and more secure positions. Re-search has linked career planning (Eby,Allen, & Brinley, 2005) with positive atti-tudes toward career prospects with the or-ganization. Research also has linked mentor-ing with positive attitudes, improved jobperformance, and reduced turnover (Bryant,2005; Payne & Huffman, 2005). Develop-ment opportunities may thus provide theneeded incentive for former welfare clientsto tolerate the difficulties of adjusting towork, enhancing the chances that they willremain employed. And, similar to efficiencycompensation, development opportunitiesmay encourage employees to be productivein their current jobs.

Hypothesis 6: Development opportunities will bepositively associated with job retention.

Methods

DataThe Philadelphia Workforce DevelopmentCorporation (PWDC) provided access to

their job-retention database for former wel-fare clients. Individuals included in thisdatabase were former welfare clients whoobtained jobs with the assistance of anemployment and training provider con-tracted by the Pennsylvania Department ofPublic Welfare (DPW). As such, welfareclients who found jobs on their own werenot included in the study population, onlythose individuals requiring employmentand training assistance. Arguably, this pop-ulation is among the most difficult to em-ploy and faces the most barriersto job retention.

The PWDC data are coded atthe level of the job, and in manyinstances, the same individualheld more than one job. In thesecases, the individual was listedin the database multiple times,once for each job held. The pop-ulation studied in this researchconsisted of all jobs for whichformer welfare clients were hiredfrom July 24, 2000, through Oc-tober 24, 2001. The PWDC data-base indicates that 2,331 jobswere filled by welfare clientsduring that time period. Thedata included employee demo-graphics, specifically, age (range= 20 to 63, mean = 32), race(85% African American, 11%Hispanic, 3% white), gender(97% female), number of chil-dren (range = 1 to 11, mean =3.6), reading level (range = 0 to grade 13,mean = 8.4), math level (range = 0 to grade13, mean = 6.2), and number of months onwelfare (ranges = 0 to 54, mean = 32), allobtained from DPW.

These data also included employment in-formation—specifically, employer name, ad-dress, and telephone number, hire date,hourly wage, wage increases if any, and end-ing date if applicable. The employment datawere provided by the employment and train-ing contractors servicing each particular em-ployee and verified by an independent con-tractor upon hire and again six months afterthe hire date.

Development

opportunities may

thus provide the

needed incentive for

former welfare

clients to tolerate

the difficulties of

adjusting to work,

enhancing the

chances that they

will remain

employed.

Human Resource Management DOI: 10.1002/hrm

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546 HUMAN RESOURCE MANAGEMENT, Winter 2006

Employer Survey Development

Several sources of data provided informationon HR practices employers might use to en-hance job retention among former welfareclients and other entry-level workers. In ad-dition to the academic literature cited above,the welfare-to-work literature includes sev-eral foundation reports describing case stud-ies of successful job retention among formerwelfare clients and many other documentsrecommending that employers adopt spe-cific practices. We also examined the Society

of Human Resource Manage-ment’s Retention Practices surveyas well as many other surveys in-cluded in their research program.

In addition to a literature anddocument search, we conductedseveral interviews and focusgroups with people experiencedin the welfare-to-work transitionto inform the development of ouremployer survey. First, we con-ducted two focus groups involv-ing a total of 11 employees whowere former welfare clients them-selves. These focus groups pro-vided us with the employees’views on actions employers takethat either help or hinder them intheir ability and motivation tostay on the job. Second, we inter-viewed two members of the DPWstaff, specifically the director ofthe Bureau of Employment andTraining Programs, and the chiefoperating officer for the Team

Workforce Investment Board. Both of theseindividuals were responsible for implement-ing employment and training programs tomove welfare clients to paid work and werehighly familiar with the issues surroundingjob retention in this population. Third, weinterviewed ten staff members at severalnonprofit organizations who contract withthe Pennsylvania DPW to provide either em-ployment and training services to welfareclients or related services to low-incomeworkers. Fourth, we interviewed five HRmanagers at organizations with experience

hiring former welfare clients. The HR man-agers piloted early drafts of the survey andprovided suggestions for items to add/sub-tract as well as changes in wording.

Since theorists have argued that firmsmanage different types of workers with dif-ferent sets of HR practices (e.g., Lepak &Snell, 1999), we focused the survey on entry-level hourly workers—individuals earning$10 to $12/hour or less, including but notlimited to those coming off of welfare. Meta-analytic research has shown that responserate declines with increased survey length(Yammarino, Skinner, & Childers, 1991), sowe limited the employer survey to fourpages. For most of the HR practices includedin the survey, we offered three response op-tions. Respondents could indicate that theyconducted the practice formally, conductedit informally, or did not conduct the prac-tice. For other practices, respondents couldindicate whether they offered various bene-fits or opportunities to all/most, some, ornone of their entry-level workers.

Employer Survey Administration

Every employer hiring a former welfareclient in the database between July 24, 2000,and October 24, 2001, was telephoned to ob-tain the name of the HR head and contactinformation for that person. More than1,400 employers were called. If the employeeanswering the telephone refused to providethe requested information, we visited thecompany Web site. Through this process,874 employers with usable addresses wereidentified and administered the Survey ofEntry-Level Employment Practices.

Meta-analytic research has shown thatresponse rates increase with multiple mail-ings (Yammarino et al., 1991), so we senteach employer a series of four mailings: apre-survey introduction letter, a cover letterwith a copy of the survey and a self-ad-dressed postage-paid envelope, a reminderletter, and a final cover letter with a secondcopy of the survey and a second postage-paidenvelope.

Data were collected in June/July andSeptember/October 2002. The June/July sur-

In addition to a

literature and

document search,

we conducted

several interviews

and focus groups

with people

experienced in the

welfare-to-work

transition to inform

the development of

our employer survey.

Human Resource Management DOI: 10.1002/hrm

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The Effect of Human Resource Management Practices on the Job Retention of Former Welfare Clients 547

vey administration was sent to as many em-ployers as we could obtain contact informa-tion for without pushing the date back toAugust, a poor month for survey response.The September/October group includedthose employers we could not contact byJune 15, along with nonrespondents to theJune/July survey administration. As such,many employers received eight mailingsfrom us. We received 305 completed sur-veys, a response rate of 34.6%. This responserate is equal to or better than the responserates of other studies of HR practices (e.g.,Huselid, 1995; Konrad & Mangel, 2000;Richard, 2000).

Employers responding to the surveywith usable data came from for-profit busi-nesses (68%), nonprofit organizations(22%), and government or public-sector or-ganizations (10%). These organizations op-erated in a variety of industries: health care(25%), retail trade (13%), hospitality/tourism (8%), education (8%), personalservices (8%), and manufacturing (4%).The companies ranged widely in size, with8% having 10 employees or fewer (coded1), 17% having 11 to 50 employees (coded2), 12% having 51 to 100 employees (coded3), 34% having 101 to 500 employees(coded 4), 7% having 501 to 1,000 employ-ees (coded 5), 5% having 1,001 to 2,000employees (coded 6), and 17% having morethan 2,000 employees (coded 7). Most(83%) of the organizations reported thatthey had a formal human resource man-agement department.

Matching survey data to job-retentionstatistics resulted in a sample of 578 caseswith no missing data for statistical analysis.The employees included in this sample didnot differ significantly from the populationof 2,331 on any of the individual character-istics included in the PWDC data, specifi-cally: gender (97% female), ethnicity (85%African American, 11% Hispanic), age (range= 20 to 56, average = 32), math skills (average= 6th grade level), reading skills (average =8th grade level), number of children in thehousehold (range = 1 to 11, average = 3.5),and number of months on welfare (average =32 months). Eliminating the 17 men reduced

the sample size to 561 for the hypothesis-testing analysis.

Measures

Job retention (days) and hourly wage wererecorded in the PWDC database and verifiedby an independent contractor. We capped re-tention at 180 days for consistency, giventhat the later group included in our samplehad only been followed for six months. Thecapped retention measure ranged from 0 to180 days (average = 103) and wasnot significantly skewed (skew-ness statistic = –.12, S.E. = .10).

Measures of job training, feed-back, financial/health benefits,family-friendly benefits, supervi-sory training, supervisory ap-praisal, and development oppor-tunities were developed fromresponses to the Survey of Entry-Level Employment Practices (seeAppendix A for a list of surveyitems). Items in the training, su-pervisor training, supervisor ap-praisal, and development oppor-tunities scales were coded as 1 ifthe employer indicated it formally con-ducted this activity and 0 if not. Items in thefinancial/health benefit and family-friendlybenefits scales were coded 1 if the employerindicated that “all or most” employees re-ceived this benefit and 0 if not. We createdthe indices by taking the mean across thedummy-coded items, so that the mean scoreon each index indicates the proportion ofthe listed practices utilized by the employer.Our use of mean indices to measure HRMpractices is consistent with past research(Delery, 1998; Konrad & Linnehan, 1995).The feedback scale response format rangedfrom 1 = never to 6 = often.

Our job training measure consisted ofeight items assessing a variety of trainingpossibilities for new hires. The feedbackmeasure asked employers how often entry-level employees received feedback on variousperformance dimensions. The provision offinancial/health benefits to entry-level em-ployees was assessed in six survey items.

Matching survey

data to job-retention

statistics resulted in

a sample of 578

cases with no

missing data for

statistical analysis.

Human Resource Management DOI: 10.1002/hrm

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548 HUMAN RESOURCE MANAGEMENT, Winter 2006

Family-friendly benefits were assessedwith 18 items asking whether entry-levelemployees were offered a series of benefitsintended to be comprehensive and similarto measures used by previous authors (e.g.,Goodstein, 1994; Ingram & Simons, 1995;Konrad & Mangel, 2000). Supervisory trainingwas assessed with items asking whether su-pervisors received formal training in nineareas. Supervisory appraisal consisted of fouritems asking whether supervisors were ap-praised on whether they provided support-ive supervision. Development opportunitiesconsisted of three possible avenues for em-ployee development.

We included as control vari-ables demographic characteristicsof the former welfare clients in-cluding age, number of children,months on welfare, and mathand reading levels. We also con-trolled company characteristicsincluding company size, sector(for-profit, nonprofit, public),and whether the company had anHR department.

Results

Table I presents means, standarddeviations, correlations, and reli-ability levels for the study’s multi-ple-item indices. All but two ofthe index reliabilities as measuredby Cronbach’s alpha exceeded

the cutoff of .70 for scale development sug-gested by Nunnally (1978). The reliabilitystatistics for job training and developmentopportunities were .69 and .55, respectively.In the regression analyses, the variance infla-tion factor values were less than 1.9 for eachindependent variable, well below the recom-mended cut-off threshold of 10 (Hair, Ander-son, Tatham, & Black, 1992), suggesting thatmulticollinearity did not significantly affectthese results.

Regression results are presented in TableII. Model 1 contained only demographiccontrol variables as predictors. The numberof months on welfare was a significant nega-tive predictor of job retention and accounted

for 2 percent of the variance in the depend-ent variable. When other individual-levelcharacteristics were controlled, math andreading scores did not significantly predictjob retention, and we removed these itemsfrom the analysis due to a substantialamount of missing data (about 10% of thesample, which reduced the sample size to503). Including math and reading scores hadvirtually no effect on any of the regressionresults, and we report the results withoutmath and reading scores to retain a samplesize of 561.

Model 2 added controls for organiza-tional characteristics. Company size was pos-itively associated with job retention, as wasemployment in the nonprofit sector, and the2 percent increment in variance explainedby these predictors was statistically signifi-cant. The number of months on welfare re-mained negative and significant in thismodel.

Model 3 added the measures of HRMpractices for hypothesis testing. AddingHRM practices to the model increased thevariance accounted for in the dependentvariable by 7 percent, and the change in R2

was statistically significant. The amount ofvariance explained by our HR practices isconsistent with the amount explained inother studies, including Tsui et al. (1997),who found that the employee-organizationalrelationship explained 7 percent of the vari-ance in individual performance measures,and Huselid (1995), who found that HRMpractices explained between 1 and 12 per-cent of the variance in employee outcomes.

Hypothesis 1 predicted, consistent withprevious research, a positive relationship be-tween job training and retention. Results in-dicated that training was unrelated to reten-tion. This finding may be due to the fact thatthese employees all had received some formof training through the Department of Pub-lic Welfare and had obtained their jobsthrough these training programs. We did notspecify a directional hypothesis related tothe effect of feedback, and results indicatedthat feedback was not statistically related toretention. Hypothesis 2 was strongly sup-ported, as both starting wage and finan-

The number of

months on welfare

was a significant

negative predictor

of job retention and

accounted for 2

percent of the

variance in the

dependent variable.

Human Resource Management DOI: 10.1002/hrm

Page 11: The effect of human resource management practices on the job retention of former welfare clients

The Effect of Human Resource Management Practices on the Job Retention of Former Welfare Clients 549

Human Resource Management DOI: 10.1002/hrm

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Page 12: The effect of human resource management practices on the job retention of former welfare clients

550 HUMAN RESOURCE MANAGEMENT, Winter 2006

cial/health benefits were significantly relatedto retention.

Hypotheses 3–6 concerned effects ofsupport and incentive practices on reten-tion. Hypothesis 3 was not supported, as theeffect of family-friendly benefits was not sta-tistically significant. One possible explana-tion for this finding is the fact that ourstudy focused on the first six months of em-ployment after welfare, a period in whichthese employees were still eligible to receivechild care benefits from the Department ofPublic Welfare. Post-hoc analysis revealed,in addition, that some individual family-friendly benefits were significantly associ-ated with retention, particularly variousforms of paid time off, including paid sickleave, personal days, holidays, and vacation(please contact the first author of this articlefor a copy of these results).

Hypotheses 4 and 5 were also not sup-ported. The effect of supervisory training(Hypothesis 4) was not statistically signifi-cant. Interestingly, the effect of supervisoryappraisal (Hypothesis 5) was significant butnegatively related to retention, meaning thatthe more supervisors are formally appraisedon how well they provide supportive super-vision, the lower the retention of formerwelfare clients. These results suggest thatdifferences in employers’ philosophical ap-proaches to commitment practices, and re-sultant expectations regarding employeeperformance, may affect job retention.

Lastly, Hypothesis 6 was supported, asdevelopment opportunities are positivelyand significantly associated with retention.This relationship occurred despite the factthat our development scale exhibited rela-tively low reliability, which suggests that em-

Human Resource Management DOI: 10.1002/hrm

Model 1 Model 2 Model 3

Variable B S.E. p B S.E. p B S.E. p

Intercept 86.38 < .001 69.54 < .001 62.21 < .001

Age 0.76 0.42 ns 0.63 0.42 ns 0.73 0.41 ns

No. of children 2.65 2.16 ns 2.77 2.14 ns 2.95 2.12 ns

Months on welfare –0.53 0.26 < .05 –0.57 0.26 < .05 –0.48 0.26 ns

Company size 6.13 1.95 < .01 2.42 2.03 ns

Public sectora (1 = y, 0 = n) –0.03 10.02 ns –2.06 9.86 ns

Nonprofita (1 = y, 0 = n) 20.35 7.95 < .05 5.08 8.07 ns

HR department (1 = y, 0 = n) –9.78 8.62 ns –14.19 9.28 ns

Training index 1.92 15.24 ns

Feedback index –5.78 3.54 ns

Wage 4.59 2.06 < .05

Financial/health benefits index 34.45 10.68 < .01

Family-friendly benefits index 2.04 20.34 ns

Supervisor training 10.59 13.37 ns

Supervisor appraisal –30.22 9.93 < .01

Development index 24.56 12.16 < .05

∆ R2 0.02 < .05 0.02 < .01 0.07 < .001

Adjusted R2 0.01 0.03 0.09

F 2.76 < .05 3.22 < .01 4.54 < .001

a Omitted category is Private, For-profit. N =561

T A B L E I I Job-Retention Regression

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The Effect of Human Resource Management Practices on the Job Retention of Former Welfare Clients 551

ployers do not have a common set of devel-opment activities. However, the significantregression finding suggests that the develop-ment activities employers do conduct are im-portant for retention purposes.

The control variables were no longer sig-nificant when HRM practices were includedin the regression equation, and the regres-sion coefficients on company characteris-tics were substantially reduced. These find-ings indicate that the HRM practicesutilized by nonprofits and larger employershelp to explain why they experience greaterretention.

We conducted a supplementary analysisto investigate whether months on welfaremoderated the effect of the HRM practiceson job retention. Under TANF, welfareclients are provided strong inducements towork, and most welfare clients want towork (Pavetti & Wemmerus, 1999). Individ-uals who have received welfare for a longerperiod of time may find it more difficult toobtain employment, while individuals onwelfare for a shorter period may be compar-atively more like the general workforce. Re-sults indicated that the effectiveness of twoHRM practices, financial/health benefitsand supervisor appraisal, significantly de-pended on the number of months the em-ployee received welfare benefits (p < .05). Inthe case of financial/health benefits, the in-teraction was positive, meaning that the ef-fect of financial/health benefits on reten-tion is stronger for those who have been onwelfare longer. This finding reinforces theimportance of this HRM practice in easingthe transition from welfare to work. In thecase of supervisory appraisal, the interac-tion was negative, meaning that the effectof supervisory appraisal on retention is in-creasingly negative for those who havebeen on welfare longer.

Discussion

Previous authors have argued that hiringfrom pools of workers overlooked by otheremployers can be effective for enhancing re-tention because these workers appreciatetheir jobs and are unlikely to be bid away by

other employers (Cappelli, 2000). Formerwelfare clients may be viewed askance bymany employers due to the substantial bar-riers to employment faced by these workers(Blumenberg, 2002); however, many em-ployers report that former welfare clientsperform as well as or better than other em-ployees in low-wage, entry-level jobs (Holzeret al., 2001; Meyer, 1999). Providing higher-quality jobs to low-wage workers can en-hance retention, generating benefits to theemployer of increasing these workers’ buy-ing power as consumers and improving thefirm’s public image as a socially responsiblecorporate citizen (Kossek et al., 1997). Rela-tively high-quality jobs also cangenerate performance benefitsdue to efficiency wage processeswhereby workers strive to retaintheir jobs by working hard andperforming well (Cappelli &Chauvin, 1991). Retention ofhigh-quality workers in entry-level jobs may be valued by manycustomers, especially in the per-sonal service industries, where asignificant number of formerwelfare clients tend to be em-ployed (e.g., nursing homes, daycare centers, and health careproviders; Chapple, 2002; Lane &Stevens, 2001; White & Geddes,2002).

In order to obtain these bene-fits, employers must retain theformer welfare clients whom they havehired. Our findings suggest several methodsfor accomplishing this goal. First and per-haps foremost, a higher starting wage isclearly associated with job retention. Insome respects, this result is not a surprisingresult, because pay is a central element of thereward system for any employer. However,our data refute the contention that employ-ers need not worry about providing a wageany higher than it takes to get former welfareclients in the door, given their limited em-ployment options. Rather, our findings areconsistent with those of Johnson and Corco-ran (2003), who found that better-qualifiedwelfare clients left lower-paying jobs for

These findings

indicate that the

HRM practices

utilized by nonprofits

and larger

employers help to

explain why they

experience greater

retention.

Human Resource Management DOI: 10.1002/hrm

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552 HUMAN RESOURCE MANAGEMENT, Winter 2006

higher-paying ones when they had the op-portunity to do so. These findings are alsoconsistent with an efficiency wage perspec-tive, which suggests that organizations thatexceed the minimum compensation thresh-old benefit from reduced turnover.

Second, our results suggest that financialand health benefits figure significantly in re-tention, and our exploratory analysis indi-cated that this effect increases with thelength of time the employee was on welfare.The benefit items comprising our indexranged from relatively expensive ones, such

as health care and pension contri-butions, to less expensive prac-tices, such as tuition reimburse-ment and encouraging retirementsavings. As with starting wage,these benefits may work from anefficiency wage perspective be-cause they provide the formerwelfare client with an incentiveto remain with the current em-ployer, given such benefits arenot commonly provided by allemployers. In addition, thesebenefits may signal to employeesa commitment by the employerto a longer-term relationship, acommitment that may be recipro-cated by former welfare clients in

the form of reliability and performance onthe job. The participants in our employeefocus groups emphasized the importance ofbenefits, particularly health benefits for theentire family. They explained that it is notenough when health benefits cover only theemployee as an individual; for self-suffi-ciency, the entire family must be covered, be-cause low-wage workers cannot afford to payfor doctor visits and other medical care fortheir children out of pocket. This view isconsistent with our finding that employersoffering a larger number of benefits experi-enced enhanced retention.

Third, from a retention perspective, itpays to provide development opportunitiesto former welfare clients. Balancing workand family while adjusting to the work en-vironment and its demands puts significantpressure on former welfare clients and is a

potential source of discouragement. An em-ployer that provides a development plan, inthe form of written performance goals, ca-reer planning, and a mentoring system,may give the employee the needed hope,incentive, and information to deal with dif-ficult personal and workplace issues (Perl-mutter, 1997). Given our data assessing re-tention over the first six months ofemployment, our results further suggestthat employers should work with formerwelfare clients as early as possible to estab-lish a development plan.

Although career development planningwas positively associated with retention inour sample, training received on the job wasnot. One possible explanation for this non-significant finding could be that many of theemployees in our sample had received spe-cific occupational training as part of theirTANF benefits. The employees in our focusgroups had very positive reactions to thetraining they had received through the TANFprogram: “When I got to the job, there werethings I knew from the training that mycoworkers didn’t know. The supervisor didn’tknow them either. So I was showing themsome of the things I had learned from thetraining program.” That employee expressedimmense pride in the ability to demonstratesuperior qualifications right from the start.

Frequency of feedback on a variety of di-mensions also was not associated with reten-tion in our study. We anticipated that feed-back might be helpful for reducinginvoluntary separations by providing em-ployees with the information they need toshow adequate performance in order to re-tain their jobs. Our null finding indicates thepossibility that the benefits of feedback maybe counterbalanced by an increased likeli-hood of separation due to the supervisorbeing able to document performance prob-lems as well as the possibility that employeesmight see frequent feedback and correctionas unfair. These negative views of feedbackare consistent with the responses of partici-pants in our employee focus groups, whodiscussed how they had to be “perfect” inthe first three months on the job and thatotherwise they were threatened with job loss

…our results further

suggest that

employers should

work with former

welfare clients as

early as possible to

establish a

development plan.

Human Resource Management DOI: 10.1002/hrm

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The Effect of Human Resource Management Practices on the Job Retention of Former Welfare Clients 553

at the end of the 90-day probation period.These employees believed that such stan-dards were unfair, especially to welfareclients, who might need a few months to ad-just to the workplace and develop the familysupports they need in order to participate inthe labor force.

Our index of family-friendly benefits as awhole did not significantly predict employeeretention, perhaps because former welfareclients continue to receive child care supportfor the first six months of employment, thetime frame during which we examined jobretention. Individual items related to paidtime off (paid sick leave, personal days, holi-days, and vacation) were positively associ-ated with job retention, however. Evidently,these benefits provide significant accommo-dation to former welfare clients as they makethe difficult transition from welfare to work.The importance of employer support as em-ployees struggle with work-family conflictswas emphasized by the employees in ourfocus groups. One participant stated, “Whatemployers really need to provide is compas-sion. What is a person supposed to do whena child is sick? Leave them alone? But if weneed to take time off for family reasons, welose the job.”

We also obtained some interesting re-sults that we hope will spur more thoughtamong practitioners and researchers aboutstrategy, HR systems, and retention. First,we obtained two surprising findings. Onewas a negative relationship between super-visory accountability for a supportive, in-clusive, and family-friendly work environ-ment and job retention among formerwelfare clients. In fact, our exploratoryanalysis found that this negative relation-ship increased the longer the employee hadbeen on welfare. The other was the findingthat providing supervisory training had noeffect on retention. An emphasis on coach-ing and developing employees and provid-ing a supportive environment signals ahigh-commitment HRM philosophy (Lepak& Snell, 1999), suggesting that the em-ployer wishes to encourage retention by ac-commodating employee needs and devel-oping a positive work environment. As

such, we expected to observe a positive as-sociation between these variables and jobretention.

At least two possible explanations existfor these contrary results. Perhaps supervi-sory training was not effective in increasingthe supportiveness of supervisors due to lowtransfer of training to the workplace(Cromwell & Kolb, 2004). Or maybe supervi-sors felt resentment at having their perform-ance appraisal based on being supportiveand inclusive. Research has demonstratedthat training supervisors to support diversitycan lead to resentment and nega-tive behaviors (Sanchez & Med-kik, 2004). These factors, in turn,may have had the unintended ef-fect of decreasing supportivenessand retention. Employers shouldevaluate the success of trainingprograms to be sure that the in-tended effects are realized.

Another possibility is thatemployers who train and holdsupervisors accountable for apositive work environment alsoexpect the highest levels of em-ployee performance. For in-stance, core sector employersmay work to develop a support-ive work environment in order toretain the best workers, while employers inthe economic periphery provide poorer-quality work environments. Core employersmay demand higher productivity and lesslateness/absenteeism from employees aspart of a more professional organizationalculture (Amuedo-Dorantes, 2000). Given thesignificant absenteeism problems reportedby employers hiring former welfare clients(Holzer et al., 2001), these employees, andparticularly those who have been on welfarethe longest, may find it more difficult toadapt to a high-support/high-demand cul-ture, with the result being that they leavetheir jobs either voluntarily due to frustra-tion or involuntarily due to performanceproblems.

Another interesting finding is that non-profit employers and larger employers expe-rienced significantly greater retention, and

The importance of

employer support as

employees struggle

with work-family

conflicts was

emphasized by the

employees in our

focus groups.

Human Resource Management DOI: 10.1002/hrm

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554 HUMAN RESOURCE MANAGEMENT, Winter 2006

that these effects diminished once HR prac-tices were accounted for in the model. Thecorrelation matrix (Table I) indicates thattwo of our critical explanatory variables,wages and financial/health benefits, weresignificantly greater in these organizations,an indication that nonprofit and larger em-ployers enjoy greater retention due to bettercompensation packages. Another explana-tion may be differing standards of employeeperformance. Nonprofit employers providedsignificantly less feedback and supervisorytraining compared to employers in the for-

profit sector. Consistent with thehigh commitment/high expecta-tions argument advanced above,it is possible that nonprofit em-ployers invest less in these areasand have lower standards for em-ployee performance. However,Table I reveals that larger organi-zations provide significantly morefeedback and supervisory train-ing, while at the same time expe-

riencing greater retention. This finding sug-gests that high investment in these areas canresult in job retention if HR practices are ex-ecuted effectively.

While our exploratory analysis indicatedthat the effects of financial/health benefitsand supervisory appraisal on retention weremagnified the more months the employeewas on welfare, interaction results for theother human resource practices were not sta-tistically significant. The HR practices ofwages and development opportunities wereequally effective in producing retention forthose on welfare for a short period of time,and those on welfare for a longer period oftime. This finding suggests that all formerwelfare clients need a good starting wage andthe hope of future advancement to survivethe inevitable difficulties in their transitionto work. These findings should apply to anyindividual making the transition to work,whether on welfare or not.

The generalizability of our results is lim-ited for a few reasons. First, we only had ac-cess to data from a single metropolitan area,and generalizability to rural areas and otherurban centers cannot be assumed. Second,

generalizability to this particular populationis limited due to our inability to obtain datafrom a larger number of employers. We at-tempted to make telephone contact withover 1,000 employers and found that manyresponded more positively to a mail contact.Perhaps the large number of small employ-ers in our population made responding tothe survey by telephone difficult, as the per-son in charge of human resources in suchorganizations also had many other pressingresponsibilities during working hours. De-spite this limitation, the 35% response rateto our employer survey was high comparedto other studies at the organizational level.For instance, the data utilized by Konradand Mangel (2000) were based on an organi-zational survey with a 28% response rate.Richard’s (2000) survey of HR directors re-sulted in a 16% response rate, and Huselid(1995) reported a 28% response rate to hisorganizational survey. Konrad and Lin-nehan (1995) reported a 39% response rateto their organizational survey, but those au-thors used an anonymous survey format. Wecould not send our survey anonymously dueto the need to match employee and em-ployer data.

Suggestions for Practitioners

As government support for welfare clientsshrinks and emphasizes movement into thepaid labor force, society expects employersto help welfare clients achieve self-suffi-ciency. This study identifies some HRMpractices that can help employers meetthose expectations.

First, because most former welfare clientshave children (over three children on aver-age in our sample), minimum-wage jobswithout benefits are not enough, and welfareclients require a family wage if they are toachieve self-sufficiency. Our findings indi-cate that job retention increases among for-mer welfare clients as wages and benefits in-crease. These findings are consistent withqualitative research that shows women onwelfare view work as the way out of povertyfor themselves and their children (Monroe &Tiller, 2001), and they are highly motivated

…minimum-wage

jobs without

benefits are not

enough…

Human Resource Management DOI: 10.1002/hrm

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The Effect of Human Resource Management Practices on the Job Retention of Former Welfare Clients 555

to find work that will allow them to achievethat goal (Chapple, 2002).

Former welfare clients face substantialbarriers to employment, however, and re-quire support (Blumenberg, 2002; Perlmut-ter, 1997). In our study, providing writtenperformance plans, career planning, andmentoring early in the employment rela-tionship was associated with improved re-tention. Research has shown that these typesof actions help employees to see the job aspart of a career (Eby et al., 2005). By rein-forcing the notion of career, employers mayconvince former welfare clients that self-suf-ficiency is possible. Belief that a goal is

achievable is an essential component of mo-tivation theories (Van Eerde & Thierry,1996), and career supports may help formerwelfare clients remain motivated to work asthey struggle to adjust to the workplace andmanage work-family conflicts.

Acknowledgment

This research was supported by Grant#2001-02510 from the Charles Stewart MottFoundation. An earlier version of this manu-script was accepted for presentation at the Au-gust 2004 Academy of Management meeting inNew Orleans.

Human Resource Management DOI: 10.1002/hrm

JOHN R. DECKOP is an associate professor of human resource management at theSchool of Business and Management at Temple University. He received his PhD in in-dustrial relations from the University of Minnesota. He serves on the editorial boards ofthe Academy of Management Journal and Group & Organization Management. His re-search interests include effects of reward systems on employee motivation and behav-ior, effects of a materialist value orientation on personal well-being and organizationaloutcomes, ethical implications of human resource management practices, and the linkbetween human resource strategy and organizational outcomes.

ALISON M. KONRAD is a professor of organizational behavior and holder of the CorusEntertainment Chair in Women in Management at the Richard Ivey School of Business atthe University of Western Ontario. She received her PhD in applied social psychologyfrom the Claremont Graduate University. She is coeditor of the Handbook of WorkplaceDiversity (2006, Sage) and 2003–2007 editor of Group & Organization Management. Herresearch interests focus on gender and diversity in organizations, including the imple-mentation and effectiveness of human resource management practices for managingworkplace diversity, the effects of the proportion of women on individual and collectiveoutcomes, and the experiences and impact of women on Fortune 1000 boards.

FELICE DAVIDSON PERLMUTTER, PhD, Professor Emeritus at the School of Social Ad-ministration at Temple University, has worked in the areas of social administration, wel-fare reform, and social change funds. She received the Lifetime Achievement Awardfrom both the Association for Research on Nonprofit and Voluntary Action (ARNOVA)and the Association for Community Organization & Social Administration (ACOSA). In-ternationally, she was a Fulbright Scholar at the Hebrew University in Jerusalem and haslectured in London, Vienna, and Australia.

JOSHUA L. FREELY is a doctoral candidate in the Sociology Department at Temple Uni-versity. His main research interests are race and ethnic relations and the sociology of ed-ucation. He is currently the project coordinator of the Metropolitan Philadelphia Indica-tors Project. His dissertation research is on the effect of perceptions about school qualityon residential mobility decisions.

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Human Resource Management DOI: 10.1002/hrm

JobTraining. “What training does your company provide to entry-level workers?”1. Pre-employment training2. Specific technical training for the current job3. Skill building training that can lead to promotion or increased earnings4. Rotational assignments5. Teamwork training6. Accepting direction/supervision7. Conflict resolution 8. Basic English skills or English as a second language

Feedback. “To what extent are entry-level employees given regular feedback on:”1. Quality of work2. Quantity of work3. Attitude4. Teamwork5. Lateness6. Absenteeism

Financial/Health Benefits. “How many of your entry-level workers are offered the followingfinancial/health benefits?”1. Tuition reimbursement2. Health care insurance for employee3. Subsidize cost of health care insurance for employee’s family 4. Prescription program5. Retirement plan that encourages employees to save6. Retirement plan that provides an employer contribution (continued)

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Human Resource Management DOI: 10.1002/hrm

Family-Friendly Benefits. “How many of your entry-level workers are offered the following family-friendly benefits?”1. Flexible work schedules2. Job sharing3. Telecommuting/Working from home4. Part-time employment5. Family sick days (e.g., employee can be out when a child is sick)6. Release time for parent-teacher conferences and/or child health visits7. Encourage supervisors to grant requests for flexibility8. Paid sick leave9. Paid personal days10. Paid holidays11. Paid vacation12. Dependent care resource and referral service13. Emergency/sick child care14. Bring child to work in emergency15. Subsidize cost of dependent care16. On-site or company-supported dependent care center17. Employee assistance program (EAP)18. Designated work/life contact person in company

SupervisorTraining. “What kinds of training does your company provide to supervisors of entry-levelemployees?”1. Teaching/training employees effectively2. Developing teamwork among employees3. Giving performance feedback effectively4. Disciplining employees properly5. Diversity sensitivity training6. Sexual harassment training7. Handling employees’ work-life balance issues8. Sensitivity training on the life circumstances of former welfare clients9. Language training (e.g., key phrases in languages other than English)

Supervisor Appraisal. “Are supervisors of entry-level workers appraised on:”1. Developing a supportive work environment2. Coaching and developing employees3. Inclusiveness or managing a diverse workgroup effectively4. Helping employees integrate work and family

Development Opportunities. “What kinds of development opportunities are available to your entry-level workers?”1. Written performance plans or goals2. Career counseling/planning3. Mentoring program or buddy system

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