📄 Abstract
For three decades the most secure finding in strategic human resource management has been that practices pay off in bundles and not singly: adopting one innovative practice in isolation produces nothing measurable, while adopting a coherent system produces large and durable productivity gains. That finding was established on production technologies in which the binding constraint was the distribution of knowledge and discretion across a workforce. Generative artificial intelligence relaxes precisely that constraint. This paper re-estimates the practice–productivity relationship under conditions of AI augmentation, asking whether the complementarities that made bundling effective still hold. Forty-one studies were assembled — nineteen from the canonical 1990–2012 literature and twenty-two from the 2023–2026 augmentation literature — and set against three scenarios to 2035. The central empirical finding is an augmentation gap. At the task and worker level the measured effects are large: 26.1 per cent more completed tasks for software developers, 15 per cent more issues resolved per hour for customer-support agents, 25.1 per cent faster completion for consultants working inside the model's competence frontier. At the firm and economy level they nearly vanish: 4 per cent labour productivity in a matched sample of European and United States firms, 5.1 per cent and statistically insignificant once complementary investment is controlled for in Canadian firms, 0.6 to 1.8 per cent implied in United States executive reporting, and a null on earnings and hours in Danish administrative data. The gap is the signature of missing organisational complements rather than of a weak technology. Decomposing the bundle shows that complementarity has not disappeared but has been re-weighted: selection- and incentive-linked complementarities weaken as AI compresses the performance distribution from below, while verification, tool governance, decision-right allocation and continuous learning complementarities strengthen sharply. The paper specifies the re-weighted bundle for the augmented firm, sets out three scenarios distinguished by how quickly firms build those complements, and argues that the human resource function has become the rate-limiting factor on aggregate productivity growth rather than a downstream consumer of it.
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📚 How to Cite:
Dr. N Subbukrishna Sastry, Dr. Manjula Mallya M , HR PRACTICE BUNDLES AND TOTAL FACTOR PRODUCTIVITY UNDER AI AUGMENTATION: RE-ESTIMATING COMPLEMENTARITY IN THE AUGMENTED FIRM , Volume 14 , Issue 7, August 2026, International Journal of Southern Economic Light (JSEL) , Pages: 1 - 17 ,