Why firms adopt empowerment practices and how such practices affect firm performance? A transaction cost-exchange perspective

Complementing the current management literature's focus on the value-creation side of empowerment practices, this paper offers a transaction cost-exchange perspective to explain why firms adopt empowerment practices and how such practices affect firm performance. Specifically, we theorize how performance ambiguity and human asset specificity, two major characteristics of employee-employer exchange, shape firms' decisions to adopt empowerment practices, both independently and interactively. Our model also develops a contingency perspective of how empowerment practices affect firm performance by delineating the moderating role of empowerment practices in the relationship between employee-employer exchange characteristics and firm performance.     

Green human resource management and the enablers of green organisational culture: Enhancing a firm's environmental performance for sustainable development

Scholars have shown that green human resource management (GHRM) practices enhance a firm's environmental performance. However, existing studies fail to explain how GHRM initiatives can enable a green organisational culture or how such a culture affects the environmental performance and sustainable development of the firm. This paper examines the relationship between GHRM practices, the enablers of green organisational culture, and a firm's environmental performance. We conduct a large‐scale survey of 204 employees at Chinese manufacturing firms. Our findings suggest that proenvironmental HRM practices including hiring, training, appraisal, and incentivisation support the development of the enablers of green organisational culture. We suggest the key enablers of green organisational culture include leadership emphasis, message credibility, peer involvement, and employee empowerment. Our paper contributes to HRM theory in terms of originality and utility of research by explaining that the enablers of green organisational culture positively mediate the relationship between GHRM practices and environmental performance. Managers are provided with a detailed understanding of the GHRM practices needed to enable an organisational culture of environmentally aware employees. Finally, we address potential implications of this work for teaching green organisational culture to future generations of responsible managers.     

The impact of HR practices on the performance of business units

This article examines the impact of HR practices and organisational commitment on the operating performance and profitability of business units. Using a predictive design with a sample of 50 autonomous business units within the same corporation, the article reveals that both organisational commitment and HR practices are significantly related to operational measures of performance, as well as operating expenses and pre‐tax profits.     

A cross‐cultural examination of the relationships among human resource management practices and organisational commitment: an institutional collectivism perspective

Previous research has shown that human resource management (HRM) practices vary across cultures. However, little research has empirically compared the effects of various HRM practices on firm‐level or individual‐level outcome variables across cultures. Drawing upon psychological contract theory and the literature on cultural values, the present study examined the effects of three organisational‐level HRM practices on individual organisational commitment in a survey of 2424 individuals in 120 organisations located in four countries and three industries. Based upon the GLOBE study, we classified the four countries into two groups – high versus low institutional collectivism. The results of our hierarchical linear modelling (HLM) analyses found significant differences in the effects of organisational‐level HRM on individual organisational commitment across cultures for two of the three HRM practices included in our model: training and teamwork. We also found partial support for differences across cultures for the effects of the third HRM practice: employee involvement in decision making. Overall, our results support the utility of theoretical and empirical models that address multiple levels of analyses to better understand the mechanisms through which the HRM‐performance link takes place across national cultures.     

Employee turnover and operational performance: the moderating effect of group‐oriented organisational culture

This study investigates the relationship between overall employee turnover and operational performance and whether organisational culture is a moderator. Using a sample of 114 outpatient centres from a health‐care system, we found a strong negative relationship between employee turnover and operational performance. Additionally, we found that organisations with a relatively stronger group‐oriented organisational culture did not experience lower operational performance in the presence of high turnover. These findings contribute to the literature on the relationship between turnover and performance. Organisations with persistent high levels of turnover may want to consider developing and adopting practices that are consistent with a group‐oriented organisational culture.     

Exploring possible trade‐offs between organisational performance and employee well‐being: The role of teamwork practices

There is growing evidence linking teamwork practices to performance outcomes. However, critics have raised concerns that such outcomes are achieved at the expense of increased job demands and stress among workers. Using large data from a representative sample of British workplaces (N = 4,311 workers in 664 workplaces), this study explores the pattern of relationships between teamwork practices, organisational performance, and employee well‐being. The study draws on a mutual gains model linking teamwork practices to organisational performance via affective commitment, and a conflicting outcomes model associated with high job demands and job‐related anxiety. The study also examines an interactive outcomes model that integrates the mutual gains and conflicting outcomes models. The study reports evidence that the performance gains of teamwork practices may actually come at the cost of increased job demands and job‐related anxiety. Nevertheless, these adverse outcomes tend to weaken at higher levels of affective commitment.     

The effect of extrinsic rewards on public and private sector employees' psychological empowerment: a comparative approach

This paper examines the impact of five extrinsic rewards (financial incentives, promotion opportunities, organisational prestige, relations with supervisor and relations with peers) on employees' psychological empowerment. Further, the present study compares these effects and the level of psychological empowerment between public and private employees. The results demonstrated that extrinsic rewards differentially affected both samples. Financial incentives, promotion opportunities and organisational prestige had a stronger effect on private employees' psychological empowerment, whereas relations with supervisor and peers were significant predictors of public employees' psychological empowerment. The results also indicated that private employees experience greater psychological empowerment, meaning and impact than public counterparts.     

How the impact of HR practices on employee well‐being and performance changes with age

With changing retirement ages and an aging workforce, interest is growing on the potential contribution of relevant bundles of HR practices in eliciting well‐being and performance among aging workers. Drawing on theories on lifespan development and self‐regulation, we distinguished two bundles of HR practices: development HR practices that help individual workers reach higher levels of functioning (e.g. training), and maintenance HR practices that help individual workers maintain their current levels of functioning in the face of new challenges (e.g. performance appraisal). Further, based on lifespan theories, we expected and found that the association between development HR practices and well‐being (i.e. job satisfaction, organisational commitment and organisational fairness) weakens, and that the associations between maintenance HR practices and well‐being, and between development HR practices and employee performance, strengthen with age. In addition, a third bundle of ‘job enrichment’ HR practices emerged that elicited higher job performance among aging workers.     

Training and organisational performance: A meta‐analysis of temporal,institutional and organisational context moderators

Drawing on systems theory, we conducted a moderated meta‐analysis of the training and organisational performance relationship using 119 primary studies. We examined the moderating effects of quality versus quantity of training, time, institutional and organisational context factors in the relationship between training and organisational performance. Our findings reveal that training is positively and directly related to organisational performance with no statistically significant difference between measures of training quality and quantity. We found that the relationship was stronger over time and that country performance orientation and country labour cost moderate the training and organisational performance relationship. We found no evidence for the moderating effects of the three organisational context moderators we examined (i.e. industry sector, organisational size and technology intensity). Finally, our results reveal that training type (i.e. general or firm‐specific) does not moderate the training and organisational performance relationship.     

High-performance human resource practices and firm performance: the mediating role of employees’ competencies and the moderating role of climate for creativity

Drawing on the resource- and competency-based view, this paper examines the relationship between high-performance human resource (HR) practices and firm performance. Using a sample of 189 firms in mainland China, a positive relationship between high-performance HR practices and firm performance was found that was partially mediated by employees’ competencies. We also found the organisational climate for creativity to strengthen such relationship. The implications and future directions of these findings are discussed.     

The paradoxical mechanisms of high‐performance work systems (HPWSs) on perceived workload: A dual‐path mediation model

We invoke conservation of resources theory to present an integrative model that simultaneously examines the positive and negative effects of employee‐experienced high‐performance work systems (experienced‐HPWSs) on perceived workload (PW). Analysis of three‐wave, time‐lagged data from 368 employees of four major state‐owned commercial banks in China revealed that experienced‐HPWSs positively predict perceived organisational support, which in turn decreases PW. Experienced‐HPWSs positively predict psychological empowerment, which in turn increases PW. The positive influence of psychological empowerment on PW is stronger than the negative influence of perceived organisational support on PW, indicating that resource loss is more salient than resource gain. This dual‐path mediation model increases our understanding of the mechanisms through which HPWSs influence PW and highlights the coexistence of opposite impacts during the process.     

The paradox of employee psychological well-being practices: an integrative literature review and new directions for research

Abstract

It is well established that many HR practices aimed at increasing employees’ psychological wellbeing (PWB) and organisational performance conflict and even contradict one another. We address this long-standing issue by undertaking an innovative integrative literature review using the paradox metatheory as a lens. Unlike the contingency approach, a paradox perspective deems real-world tensions as normal, which can also be harnessed, and benefit employees and the organisation. We make three contributions; firstly, we identify contradictory employee PWB and organisational performance HR practices; secondly, we offer a solution in addressing the inherent tension between PWB and organisational performance by developing a new sensemaking conceptual framework; and thirdly, we offer a more nuanced perspective of prevailing arguments by distinguishing endogenous factors that organisations can influence to enhance the synergies between employee PWB and organisational performance HR practices. The intended impact of this paper is to instigate a paradigm shift and shape a new trajectory of thinking about how employee PWB and organisational performance practices can exist side-by-side.     

The role of strategic HR practices in organisational effectiveness: an empirical investigation in the country of Jordan

This study responds to the call of researchers, and is conducted in a non-western context in the country of Jordan. The study contributes to our understanding of human resource (HR) practices' impact on organisational effectiveness. The empirical analysis is based on theoretical prepositions that motivated employees through good HR practices stay longer and contribute positively to the overall financial performance of organisations. Rigorous statistical testing of the data on the population of financial firms shows that careful recruitment and selection, training and internal career opportunities have a positive impact on reducing employee turnover. Training, in particular, is found to have a strong positive impact on financial performance measured by return on assets and return on equity. Furthermore, the findings provide strong support for the direct approach in strategic HR management–performance research that a group of best HR practices will continuously and directly generate superior performance. Despite such compelling arguments, however, we did not find evidence to support the notion that a bundle of HR practices impact better on financial performance than individual HR practices. It is possible that the optimal configuration may not only be contingent on national context, but could be due to the sector and the specific characteristics of the firm.     

Institutional effects of empowerment: a comparison between the Anglo-Saxon and Scandinavian contexts

Many empowerment studies focus on issues at organisational and individual levels. However, few empirical investigations have been placed at a more macro level looking at the social environmental forces of empowerment. To contribute to this gap, this study investigates the existence of institutional effects on empowerment practices. The study is based on a secondary analysis of data from the 2005 European Working Conditions Survey. It compares an Anglo-Saxon and a Scandinavian context due to their distinct historical empowerment movements. The findings indicate that Scandinavian countries possess a higher institutional context for empowerment practices. Theoretical and practical implications are also discussed in the present study.     

High performance work systems,organisational culture and firm effectiveness

The HRM literature emphasises the importance of people in enhancing firm performance or even creating competitive advantage. This study provides further evidence on the link between so‐called high performance work systems and firm performance and relates these to organisational culture. In total 175 organisations from different sectors in the Netherlands participated. Senior HR managers were questioned on HRM practices and chief executives on organisational culture. Three different groups of personnel are distinguished in the measures: core employees, managers and specialist professional staff. One high performance work system could be distinguished, consisting of a combination of practices with an emphasis on employee development, strict selection and providing an overarching goal or direction. Results of regression analyses controlling for sector, firm size and age show a significant impact of this system on several performance outcomes (perceived economic outcomes, beyond contract and absenteeism), as well as positive relationships with three organisational culture orientations. Practices that are not part of this combination also show some positive (but limited) links with culture and outcomes.     

The link between perceived HRM practices,performance and well‐being: the moderating effect of trust in the employer

The present study examines the interaction between perceived HRM practices and trust in the employer on employee performance and well‐being. Specifically, the study tests whether trust in the employer moderates the relationships between perceptions of HRM practices and task performance (as rated by employees’ supervisors), organisational citizenship behaviour, turnover intentions and employee well‐being. Support was found for the majority of the hypotheses using data from 613 employees and their line managers in a service sector organisation in the UK. Trust in the employer moderates the relationships between perceived HRM practices and task performance, turnover intentions and individual well‐being, but not organisational citizenship behaviour. Implications of the findings for organisations and future research are discussed.     

Adjusting to the national minimum wage: constraints and incentives to change in six low‐paying sectors

Interest in the national minimum wage (NMW) includes not only its direct impact on employment and wages, but also its indirect impact on organisational performance resulting from a reorientation of employer behaviour with regard to employment practices and product market competition. Drawing on data from small firms in six low‐paying sectors, this article identifies three key constraints that have undermined the possible effect of the NMW in generating a virtuous cycle between employment practices and product market approach. These constraints relate to product market conditions, employer norms and labour market institutions (especially training).     

Managing multidimensional knowledge assets: HR configurations in professional service firms

The purpose of this article is to illustrate empirically how HR practices are configured to manage multidimensional knowledge assets. It contributes directly to the configurational approaches to HRM by identifying HRM systems that are used to manage various types of knowledge assets. First, we develop a framework from theory to categorise knowledge assets into human (industry and firm specific), social (entrepreneurial and co‐operative) and organisational capital (mechanistic and organic). Within this framework, we draw on data gathered in the 12 professional services firms to understand how HR practices enable the management of each knowledge asset. We identify two configurations of HR practices (organisationally and professionally focused). These configurations do not exist in isolation but are used simultaneously by organisations via either a targeted (different practices in different parts of the organisation) or a temporally segregated way (different practices for the same group of employees over time).     

The effect of human resource management practices on the perceptions of organizational and market performance of the firm

The purpose of our study is to extend the emerging empirical literature on the firm‐level impact of human resource management practices. Results based on a national sample of organizations from private and public sectors in Israel indicate that these practices have a significant impact on both the perceived organizational and market performance of the organization. The single independent variable found to be statistically significant in affecting perceived organizational performance was training practices. In the case of perceived market performance, we found that, in addition to training practices, employee selection practices also significantly affected the perceived market performance.¹ © 1999 John Wiley & Sons, Inc.     

Exploring the power dimensions of the human resource function

While a large body of literature has investigated the content of human resource management (HRM) practices, this research explores the process through which the HRM function impacts on organisational performance. Specifically, the research explores the reasons for the success or failure of HRM initiatives that have been associated with organisational outcomes and classifies the reasons as dimensions of HRM power. Based on 26 interviews conducted in Australia with senior HRM executives, top management team (TMT) executives and two management consultants, we found that, in order to contribute to organisational performance, HRM professionals can effectively utilise three dimensions of power, namely power of resources, power of processes and power of meaning. The findings offer new insights to the relationship between dimensions of HRM power and organisational performance.