What Is It About Relationships? A Behavioral Theory of Social Capital and Performance

Abstract

Researchers have consistently found a positive relationship between bundles of high-performance human resource (HPHR) practices and organizational performance, but, to date, the mechanisms underlying this relationship have remained unclear. Recent work has suggested “social capital” mediates the HPHR practice–performance relationship. Building upon this work I develop and test a behavioral theory of how this occurs. Specifically, I argue that HPHR practices signal the importance of high-quality relationships, and I find, using a sample of seventy-five hospital nursing units, that HPHR practices foster higher-quality interactions and capabilities for rapid error detection and correction, which, in turn, substantially reduce the incidence of medication errors and patient falls.