Implemented and perceived high-performance work system and its effect on branch performance. A 2-1-2 mediational multilevel approach
| DOI | https://doi.org/10.1108/ER-08-2017-0186 |
| Published date | 03 June 2019 |
| Pages | 793-810 |
| Date | 03 June 2019 |
| Author | Muhammad Ali,Shen Lei,Susan Freeman,Mubbsher Munawar Khan |
| Subject Matter | Hr & organizational behaviour |
Implemented and perceived
high-performance work
system and its effect on
branch performance
A 2-1-2 mediational multilevel approach
Muhammad Ali
Glorious Sun School of Business and Management,
Donghua University, Shanghai, China and
School of Economics and Management, Tongji University, Shanghai, China
Shen Lei
Glorious Sun School of Business and Management,
Donghua University, Shanghai, China
Susan Freeman
Business School, University of South Australia, Adelaide, Australia, and
Mubbsher Munawar Khan
Hailey College of Banking and Finance, University of the Punjab, Lahore, Pakistan
Abstract
Purpose –The purpose of this paper is to examine the influence of high-performance work systems (HPWS)
on unit performance relative to the mediating roles of collective human capital (CHC) at the unit level and
perceived HPWS at the employee level.
Design/methodology/approach –Data were collected from 181 branch managers and 504employees. The
proposed path model was tested using the statistical package M-plus (v. 7) using a 2-1-2 multilevel approach
for mediation analysis.
Findings –Generally, branch managers actively implement HPWS, and employees perceive a fairly high
level of HPWS. Further, the path model indicated that CHC at the unit level and perceived HPWS at the
employee level partially mediate the relationship between implemented HPWS and unit performance.
Originality/value –This study is the first to explore multilevel mediating mechanisms in the context of
the largest four state-owned banks in China. A 2-1-2 multilevel analysis procedure was used to separate
measurementerror into relevant employee- and branch-levelcomponents to createmore precise assessmentsof
multivariateassociations.Such analyses havenot yet been conductedin research on HPWS priorto this study of
the Chinese banking sector, but theyare essential for teasing outthe micro- and macro-level effects of HPWS.
Keywords China, Implemented high-performance work system, Perceived high-performance work system
Paper type Research paper
Introduction
Over the past two and half decades, empirical studies of strategic human resource management
(SHRM) have explored the relationships between different human resource (HR) practices
and organizational performance (Paauwe et al., 2013; Mihail and Kloutsiniotis, 2016).
Recent studies have highlighted the role of high-performance work systems (HPWS) as having
effects on organizational performance (Ogbonnaya and Valizade, 2016; García-Chas et al.,2016).
An HPWS is a unique bundle of complementary HR practices intended to allow employees to
effectively contribute to organizational performance (Appelbaum et al.,2000).Theliteraturehas
found this relationship to be a multilevel phenomenon ( Jiang et al., 2013). Little researchhas been
done to determine how implementedHPWSaffectemployees’perceptions of them and their
Employee Relations: The
International Journal
Vol. 41 No. 4, 2019
pp. 793-810
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-08-2017-0186
Received 7 August 2017
Revised 13 March 2018
30 June 2018
26 September 2018
4 November 2018
Accepted 5 November 2018
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
793
High-
performance
work system
impact on unit performance (hereafter unit and branch are used interchangeably). Moreover, little
empirical evidence has been found that differentiates the experiences of managers and
employees on organizational HR practices (Zhu et al., 2013). This underlying assumption drives
further inquiry, which has prompted a new stream of research (Paauwe et al., 2013; Ogbonnaya
and Valizade, 2016).
The relationship between HPWS and performance is quite robust, but there remain
significant challenges in regard to the specific benefits of HPWS on organizational performance.
First, most prior research on HPWS shows a direct and positive relationship with performance.
However, the process (mediating actors) through which HPWS affect organizational outcomes
has yet to be addressed in an effective way (Mansour et al., 2014; Mihail and Kloutsiniotis, 2016)
and demands more attention (Huselid and Becker, 2011; Jiang et al., 2013; Fu et al.,2017).Second,
existing research almost exclusively takes a managerial perspective on the relationship between
HR and performance, implicitly assuming that managers’opinions are consistent with
employees’perceptions ( Jiang et al., 2013). However, researchers in SHRM (Elorza et al., 2016)
have argued that employee perceptions of the relationship between HPWS and performance
should be addressed, because as employees are the actual recipients of such practices, they are in
an ideal position to say how far and how well HPWS are executed within the organization (Nishii
and Wright, 2008; Liao et al., 2009; Den Hartog et al., 2013). More recently, authors have noted
that employees have a more direct impact on performance at a business unit level. Third, such
studies generally confine themselves to organizational-level data, ignoring individual-level
responses. Further, it is implicitly assumed that HPWS are implemented throughout the
organization as they are intended, with HR professionals, management and individuals attaching
similar meanings to HR experiences (Nishii and Wright, 2008).
Prior studies, with their multilevel models (Bartram et al., 2014; Zhang and Morris, 2014),
omit from consideration the interdependencies between individualsnested in the organization
and therefore do not address potential source s of bias (Shen, 2016). Preacher et al. (2010) found
that multi-level mediation analysis is a feasible approachfor overcoming such errors.This is a
viable technique of analysis for multilevel mediation models with independent, mediator or
dependent variables that are thus measured at different levels of analysis.
Our study takes into account the concerns raised above and contributes to the new stream of
research, also building on existing literature by addressing calls for studies that better account
for the relationship between HPWS and performance from both the managerial and employee
perspective (Vermeeren, 2014; Ogbonnaya and Valizade, 2016). In addition, while existing
research has generally demonstrated the positive influence that HPWS have on organizational
effectiveness in manufacturing, generalizing these effects into service settings is difficult (Lin and
Liu, 2016). Combs et al. (2006) and Den Hartog et al. (2013) found that researchers should question
which HPWS are designed for manufacturing organizations and their applicability to different
HR practices, such as the creation of service workplaces, given the unique characteristics that
emerge in different settings. Therefore, to address key trends and concerns in different HR
practices, our study will investigate the relationship between HPWS and unit performance in a
service setting and target branch-level (multiple) analysis in a key service, the banking sector.
Taking the lead from the above discussion and the resource-based view (RBV ) of the firm
(Barney, 1991), this study created and tested a model that provided two-level mediation for
explaining key HPWS influences on (unit) organizational performance (see Figure 1).
First, drawing on the RBV of firms (Barney, 1991), we connect the relational link,
adopting the variable of collective human capital (CHC) into our study on firms in the
Chinese banking sector to explore a potential mediator that operates in the “black box”of
the relationship between HPWS and unit performance. However, despite the consensus of a
favorable HPWS–performance linkage, the intermediary mechanisms for explaining HPWS
relationships with employee outcomes are not fully explored (Becker and Huselid, 2006;
Takeuchi et al., 2007; Guest, 2011; Jiang et al., 2013; Mansour et al., 2014; Boxall et al., 2016)
794
ER
41,4
To continue reading
Request your trial