We develop a theoretical framework to examine three hypotheses on the relationship between HRM practices and organisational performance in European firms. The first is that collaborative forms of HRM practice are more strongly associated with superior firm performance than calculative forms. The second is that these associations are strongest where national institutional and normative settings support them. The third is that employer-employee consultative committees and collective payment methods are also associated with superior firm performance. The first two propositions are strongly empirically supported, as is the third albeit more weakly. The implications of the findings for European policy and Varieties of Capitalism theory are discussed.
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