High-Performance Work Systems and Organizational Performance

Despite the recognized role of High-Performance Work Systems (hereafter, HPWS) in the strategic HRM literature, research on the linkages between HPWS and organizational performance is far from conclusive. To address the calls for further understanding of such linkages, we develop a multilevel model of universal HR practices as well as Vietnam-specific HR practices, based on self-determination theory and human capital theory. We draw on constructs of collective human capital, environment uncertainty, climate for initiative, climate for psychological safety, and employee creativity to hypothesize mediation and moderation mechanisms linking HPWS to organizational performance. Based on multi-level data from 56 Vietnamese service firms (109 managers, 526 employees and 155 supervisors), our findings demonstrate that the relationship between HPWS execution and employee creativity is mediated by climates for initiative and psychological safety at individual level. Additionally, we found that employee creativity at individual level and collective human capital at branch level partially mediated the relationship between HPWS execution and branch-level innovation. Finally, the relationship between branch-level innovation and branch market performance was seen to be moderated by environmental uncertainty. Keywords: High-Performance Work Systems, Self-determination Theory, Human Capital Theory, Climate for Initiative, Climate for Psychological Safety, Collective Human Capital, Employee Creativity, Innovation.