Are high performance work practices really necessary in family SMEs? An analysis of the impact on employee retention

The present study examines the adoption of high-performance work practices (HPWPs) in family versus non-family firms, and evaluates the effect of such practices on the retention of valuable employees in light of different family contingencies. The analysis is carried out on a sample of 232 companies with more than 10 and less than 250 employees, operating in Austria and Hungary. The results indicate that the relational mechanisms originating from the family social capital may act as substitutes of formal practices aimed at fostering employee involvement and commitment and that those mechanisms depend on the extent family involvement in the governance of the business.