The Mediating Role of Employee Engagement in the Relationship between High Performance Work Practices and Job Performance

Abstract

Modern organizations bank upon High Performance Work Systems to optimize the potential of their human resources. Drawing upon Job Characteristics Theory (Hackman and Oldham, 1975) and Social Exchange Theory (Blau, 1964), the present study explores the direct effect of HPWPs (High Performance Work Practices) on job performance and the indirect effect through mediation of employee engagement. This paper studies HPWPs through three variables i.e. employees’ awareness level, availability of HPWPs and employees’ perception regarding effectiveness of HPWPs. Path model has been developed and analyzed using Amos. Full mediation effect of employee engagement is observed. HPWPs and job performance are also found to be highly correlated. Practical significance, limitations and scope for future research have also been discussed.

Introduction

The concept of human resource innovation and reengineering got a strong up-thrust with the emergence of High Performance Work Systems. The first decade of the twenty-first century has witnessed an extraordinary growth in the amount of human resource literature investigating the nature of High Performance Work Practices (HPWPs) and their impact on employee and organizational outcomes. The positive outcomes identified include productivity gains, profitability, low staff turnover, better teamwork, enhanced training and skills, greater staff commitment and higher earnings for employees. HPWS leads to a ‘win-win’ scenario (Rousseau, 1995). US studies found that while employers gained improved product quality, productivity and profitability, employees benefited from higher levels of wages and job satisfaction (Ichniowski et al., 1997; Appelbaum et al., 2000).

Punia and Garg (2014) introduced three important variables that must be considered for successful implementation of any high performance system. The variables are employees’ awareness of HPWPs, availability of HPWPs and employees’ perception regarding effectiveness of these practices. However, a direct impact of these three variables with performance remains to be investigated.

Further, the social exchange and job characteristics theories explain the route through which HR practices result in a high level of performance by the employees. Both theories directly or indirectly state employee engagement as a mediating variable. While the social exchange theory directly considers employee engagement as a mediator, the job characteristics theory indirectly assumes so. The present paper also explores these assumptions i.e. mediating effect of employee engagement in the relationship between HPWPs and Job Performance. A brief description of the theoretical background, previous studies and hypotheses development is given herewith.

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