Employee Reactions to HPWS in Multinational Companies: Effects of Subsidiary and Parent Cultures

Abstract

Research has shown that High-Performance Work Systems (HPWS) are positively related to employee attitudes and performance. However, the boundary conditions of these relationships have been relatively unexplored. In this study we aim to close the gap on this issue by exploring the effect of HPWS in the subsidiaries of multinational companies (MNCs) in the high-tech industry. Drawing on the literatures of person-environment fit and organizational identification, we hypothesized that the relationship between subsidiary HPWS and employee reactions would be moderated by both subsidiary culture and parent culture. Our hypotheses were supported. Specifically, our results based on employees from 44 subsidiaries of 6 MNCs, revealed that (as hypothesized) the relationship between subsidiary HPWS and employee commitment and job satisfaction is intensified when subsidiary organization culture as well as the parent organization culture and HPWS are consistent (converge) with the subsidiary HPWS. Further, as expected, subsidiary employees’ satisfaction and commitment were negatively related to absenteeism and turnover in the subsidiary organization. We discussed the theoretical and practical implications of our findings.