Are they worth it? Warmth and competence perceptions influence the investment of slack resources in and the efficacy of HPWS

Abstract

AbstractUtilizing research on organizational slack and the stereotype content model, the antecedents and consequences of high‐performance work system (HPWS) utilization are assessed in a sample of 108 small and medium‐sized enterprises in South Korea. The paper advances theory to demonstrate that organizational slack drives HPWS adoption, but only when the chief executive officer (CEO) views employees as worth the investment. A social psychology lens is used to illustrate the significance of CEO perceptions of employee warmth and competence as moderators of the relationship between slack resources and HPWS adoption in small firms. CEOs with available financial resources who also hold a high view of employee trustworthiness (i.e., warmth) and ability (i.e., competence) are likely to utilize higher levels of HPWS. Further, employee perceptions of CEO warmth and competence moderate the relationship between HPWS utilization and firm performance, such that high levels of perceived CEO warmth and competence enhance the efficacy of HPWS. The results serve to highlight the significance of perceptual factors in both the antecedents and outcomes of HPWS adoption, particularly in smaller firms.