High performance work system and organisational performance: role of knowledge management
| DOI | https://doi.org/10.1108/PR-10-2015-0262 |
| Date | 06 November 2017 |
| Published date | 06 November 2017 |
| Pages | 1770-1795 |
| Author | Jeevan Jyoti,Asha Rani |
| Subject Matter | HR & organizational behaviour,Global HRM |
High performance work system
and organisational performance:
role of knowledge management
Jeevan Jyoti and Asha Rani
Department of Commerce, University of Jammu, Jammu, India
Abstract
Purpose –The purpose of this paper is to explore the high performance work system through ability,
motivation and opportunity model (Jiang et al., 2013) and its impact on organisational performance. Further,
the mediating role of knowledge management between high performance work system and organisational
performance has also been evaluated.
Design/methodology/approach –Questionnaire technique has been used to collect the data from
managers (n¼58) and employees (n¼246) working in telecommunication organisations in Jammu and
Kashmir (North India). Data collected have been validated using the exploratory factor analysis and
confirmatory factor analysis. Hypotheses have been tested through structural equation modelling with the
help of AMOS and SmartPLS3 softwares. Further, theoretical, managerial and socio-economic implications
have also been discussed.
Findings –The study indicates that high performance work system positively affects organisational
performance. Further, knowledge management act as a mediator between high performance work system and
organisational performance.
Research limitations/implications –The study has been conducted only in the private
telecommunication sector (Airtel, Aircel, Tata Indicom, Idea, Reliance, Vodafone). Further, the study being
limited to telecommunication sector can be extended in other sectors also.
Practical implications –In order to create superior work system, management should focus on
ability-enhancing initiatives such as extensive job training, computer-based training, etc. on regular basis.
Employees should be rewarded extrinsically as well as intrinsically to keep them motivated to achieve higher
levels of performance. Further, management should empower the employees through decentralisation of
authority, participative decision making, etc. Besides this, management should also instil the knowledge
culture in the organisation in order to enhance the knowledge capability of the employees.
Originality/value –This study contributes to the literature by identifying the black box using knowledge
management to understand the relationship between high performance work system and organisational
performance in the telecommunication sector.
Keywords Knowledge management, Quantitative, Advanced statistical, Organizational performance,
AMO model, High performance work system
Paper type Research paper
Introduction
Globalisation has encouraged business houses and the top thinkers to act globally in order
to gain competitive advantage. Further, organisations have to cope up with tough
competition and new technology (Zhang and Morris, 2014; Hassan et al., 2013; Khasawneh
and Alzawahreh, 2012; Messersmith et al., 2011), which force management to seek new ways
of organising work and employment (Guest, 2011). In this context, Huselid (1995) viewed
that high performance work system can help to solve these problems with the help of high
performance human resource (HR) practices. The high performance work system manage its
valuable and talented employees in such a way that helps to generate sustainable
competitive advantage for the organisation (Way, 2002). It is considered as a set of
inter-related HR practices (Carvalho and Chambel, 2015; Posthuma et al., 2013), which
includes comprehensive recruitment and selection, incentive-based compensation,
performance management, extensive employee involvement and training (Huselid, 1995).
These practices enhance the employees’knowledge, skills and abilities (KSAs), increase
their motivation and also empower them to use their knowledge, skill and abilities for
Personnel Review
Vol. 46 No. 8, 2017
pp. 1770-1795
© Emerald PublishingLimited
0048-3486
DOI 10.1108/PR-10-2015-0262
Received 8 October 2015
Revised 7 June 2016
3 October 2016
9 December 2016
Accepted 6 February 2017
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0048-3486.htm
1770
PR
46,8
organisational advantage (Combs et al., 2006). In other words, high performance work
system influence employees’skill, attitude and behaviour, which can be advantageous in
knowledge creation and development within the firm. On the same line, high performance
work system help employees to create new knowledge and motivate them with
learning abilities in order to boost the productivity and efficiency of an organisation.
Zacharatos et al. (2005) argued that high performance work systems focus on empowering
employees through increased information flow and the decentralisation of decision making
and are allied with increased employee efficiency. High performance work systems are
also known as high performance work practices (Mihail and Kloutsiniotis, 2016).
High performance work practices are different from traditional HR practices as the later
focus on achieving goals of the organisation through hard work of employees (Arthur, 1994)
but, high performance work system includes the nature and degree of HR management “fit”
(Boxall and Purcell, 2008; Wood, 1999) and bundling of HR practices (Mihail and
Kloutsiniotis, 2016; MacDuffie, 1995). Further, Boxall and Purcell (2003) viewed that high
performance work practices are a combination of key practices such as more rigorous
selection and better training systems to enhance ability levels, more comprehensive
incentives (i.e. employee bonuses and internal career ladders) to increase motivation and
participative structures (self-managing teams and quality circles) that improve opportunity
to contribute. In addition, Jiang et al. (2013) advocated that high performance work system
enhances the employees’KSAs, motivation and opportunity that develops higher
commitment (Gong et al. 2009), lower turnover ( Jensen et al., 2013), higher productivity
and quality (MacDuffie, 1995), better service performance (Chuang and Liao, 2010),
enhanced safety performance (Zacharatos et al., 2005) and better financial performance
(Huselid, 1995).
Further, earlier research has proved the relationship between HR practices and
organisational performance (Absar et al., 2010; Batt, 2002; Huselid, 1995) and it is considered
a vital contributor to organisational success. MacDuffie (1995) empirically proved bundled
high performance HR practices affect business performance more than individual HR
practices. However, various researchers have stressed the need to evaluate the missing link
between high performance work system and organisational outcomes (Jiang et al., 2013;
Messersmith et al., 2011; Becker and Huselid, 2006). Exploration of various databases like
Emerald, EBSCO, Elsevier, Sage, Springer, JSTOR, Taylor and Francis, Wiley-Blackwell
revealed that there is lack of research regarding the role of knowledge management between
high performance work system and organisational performance relationship. Only two
studies have been conducted in this context. One study has evaluated the role of knowledge
creation capability between HR practices and firm performance (Collins and Smith, 2006).
Another study has assessed the role of knowledge management between HR practices and
innovation performance ( Jing-Wen et al., 2008). So, there is a need to evaluate in detail the
role of knowledge management between high performance work system and organisational
performance.
Besides this, it has been found that most of the studies on high performance HR practices
have been conducted in the developed countries (Muduli, 2015; Posthuma, et al., 2013). In the
Indian context, though Muduli (2015) viewed that HR management research has primarily
focused on traditional HR management rather than innovative HR practices but there
are studies that have focussed high performance work system and job involvement
(Huang et al., 2016); bundled high performance HR practices and intention to leave
( Jyoti, Rani and Gandotra, 2015); high performance work system and organisational
performance (Muduli, 2015); strategic HR management and its outcome (Muduli, 2012);
HR strategy and innovation (Cooke and Saini, 2010); HR flexibility and firm level outcomes
(Ketkar and Sett, 2009); and innovative HR management and corporate performance
(Som, 2008). There is lack of studies regarding the impact of high performance work system
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