The effect of high-performance HR practices on organizational performance

Abstract

This study seeks to confirm the effect of high-performance HR practices on organizational performance and the mediating effect of cooperative industrial relations. To this end, the study selected properties of high-performance HR practices, cooperative industrial relations and organizational performance on the basis of literature review. The study collected 317 units of questionnaire from employees of eight five-star hotels, and found that the sub-factors of high-performance HR practices –selective recruiting, result-oriented evaluation and incentivized compensation– had a significant impact on cooperative industrial relations. Also, training, result-oriented evaluation and cooperative industrial relations showed a significant effect on organizational performance. Verification of the mediating effect of cooperative industrial relations found that selective recruiting and incentivized compensation did not have a significant effect on organizational performance but they did indirectly when cooperative industrial relations mediated. This means that since high-performance HR practices are rooted upon participatory management principles, cooperative relations between labor and management encourage the two parties to consult each other on the proper size of recruitment or incentivized compensation, driving innovation and competitiveness of hotel companies. In the conclusions, the study presented the results, implications and limitations of the research.