Do performance measures matter in the relationship between high-performance work system and organizational performance?

Abstract

PurposeThe purpose of this paper is to develop a resource-based framework to explain the relationship between high-performance work system (HPWS) and organizational performance (OP) and the moderating role of performance measures.Design/methodology/approachThe paper takes a meta-analysis approach, and tests hypotheses against data of 47,741 firms and establishments in 192 studies published by June 2016.FindingsThe paper finds that HPWS has a greater positive effect on operational than financial performance. Moreover, HPWS influences operational performance more strongly in developing than advanced countries and at the firm level than the establishment level, but such variations are not evident in the effect of HPWS on financial performance.Practical implicationsThe paper suggests that managers should treat human resource management (HRM) practices as a system, and develop HPWS for operational gains which in turn lead to financial gains. Managers need to take different approaches to develop HPWS for high performance depending on the country of origin and the level of organization.Originality/valueBased on studies of individual HRM practices, previous meta-analytical studies suggested that the HPWS-OP relationship is invariant across performance measures. Taking HRM practices as integral components of HPWS, this paper extends the resource-based theory to demonstrate that performance measures interact with country of origin and level of analysis to moderate the HPWS-OP relationship.