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This study investigates the determinants of high‐performance work systems ( HPWS ) in small and medium‐sized private enterprises ( SMPEs ) in C hina. Fifteen SMPE owners in a medium‐sized city of C hina were interviewed, the data were analysed and a grid model was developed. The results show that stakeholder relationships and the commitment of owners to human resource management ( HRM ) are the two main aspects determining the adoption of HPWS in C hina's SMPEs . Most of the HRM practices used by these SMPEs were developed by the owners according to the specific needs of the firm and the need for flexibility. This research contributes to the HPWS literature by providing evidence on its development in SMPEs in a transitional economy.
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