High Performance Work System and Employees' Behavioral Outcomes

BY

Khatir Ullah
&
Muhammad Usman

DEPARTMENT OF MANAGEMENT SCIENCES

CITY UNIVERSITY OF SCIENCE & INFORMATION

TECHNOLOGY PESHAWAR PAKISTAN

Session: 2018-22
 High Performance Work System and Employees' Behavioral Outcomes

BY

Khatir Ullah
&
Muhammad Usman

A thesis submitted to the City University

Of Science & Information Technology, Peshawar,

In partial fulfillment of the requirements for the degree of

Bachelors of Business Administration

DEPARTMENT OF MANAGEMENT SCIENCES

CITY UNIVERSITY OF SCIENCE & INFORMATION TECHNOLOGY

PESHAWAR, PAKISTAN.

Session: 2018-2
 Certificate of approval

We certify that we have read High Performance Work System and Employees'
Behavioral Outcomes. In this opinion, this work meets the criteria for approving a
thesis submitted in partial fulfilment of the requirement for the degree of Bachelors of
Business Administration at City University of Science and Information Technology,
Peshawar.

_______________________________

Saba Gul Rehmat

(Supervisor)

Date: ___/___/_____

_______________________________

Dr. Asif Baloch

(Head of Department)

iii
 Declaration

We declare that this thesis, which we are submitting to the Department of Management
Sciences at the City University of Science and Information Technology for examination in
consideration of the award of a bachelor’s degree is our effort.

Khatir Ullah - 9938

Muhammad Usman - 10231

i
 Acknowledgment

In the name of Allah who is entirely merciful and especially merciful, the omnipotent, the
omniscient and Muhammad (‫ )ﷺ‬is the last prophet of Allah.

We are using this opportunity to express our gratitude to everyone who supported us throughout
the course of this BBA research. We are thankful for their aspiring guidance and friendly advice
during work.

Thanks to Saba Gul Rehmat our research supervisor, she is a source of admiration for us we
thank her for all his consideration and care.

Khatir Ullah - 9938

Muhammad Usman - 10231

ii
 Dedication
This study is wholeheartedly dedicated to our beloved Parents, who have been our source of
inspiration and gave us strength when we thought of giving up, who continually provide their
moral, spiritual, emotional, and financial support, may they have long life with Eman, Ameen.

We dedicated this work to the Almighty Allah, thank you for the guidance, strength, power of
the mind, protection, and skills, and for giving us a healthy life. All of these, we offer to you.

We especially dedicate our study to our supervisor Mam Saba Gul Rehman.

iii
 Contents

Certificate of approval ........................................................................................................................... iii

Declaration ............................................................................................................................................... i
Acknowledgment .................................................................................................................................... ii
Dedication .............................................................................................................................................. iii
List of Tables ......................................................................................................................................... vi
CHAPTER 01 INTRODUCTION .......................................................................................................... 1
1.1. Overview/Background ............................................................................................................ 1
CHAPTER 2 LITERATURE REVIEW ................................................................................................. 7
2.1. Human resource management ................................................................................................. 7
2.2. The development of the HRM concept ................................................................................... 8
2.3. GOALS OF HRM ................................................................................................................... 9
2.4. High Performance Work System (HPWS)............................................................................ 10
2.5. Recruitment and Selection .................................................................................................... 12
2.6. Performance Management .................................................................................................... 13
2.7. Empowerment ....................................................................................................................... 14
2.8. Training ................................................................................................................................. 14
2.9. Teamwork ............................................................................................................................. 15
2.10. Compensation ................................................................................................................... 16
2.11. Importance of High-Performance Work System............................................................... 17
2.12. HPWS and employees’ behavioral outcomes ................................................................... 18
CHAPTER N0. 3 METHODOLOGY................................................................................................... 25
3.1. Population, sample and data collection ................................................................................. 25
3.2. Population ............................................................................................................................. 25
3.3. Sample................................................................................................................................... 26
3.4. The survey's criteria and questions ....................................................................................... 27
3.5. Instruments............................................................................................................................ 27
3.6. Dependable Variables ........................................................................................................... 27
3.6.1. Areas in which the organization fails ................................................................................ 27
3.6.4. This section provides a broad overview of data analysis. ................................................. 28
3.7. Data Analysis ........................................................................................................................ 29
3.8. Summary of the Chapter ....................................................................................................... 30
CHAPTER NO. 04 RESULTS AND ANALYSIS ............................................................................... 31
4.1. Descriptive Statistics ............................................................................................................. 35
4.2. Descriptive statistics ............................................................................................................. 42

iv
 4.3. Summary of the Chapter ....................................................................................................... 44
CHAPTER NO. 05 CONCLUSION ..................................................................................................... 45
5.1. Final Analysis, Suggestions, and Limitations ....................................................................... 45
5.2. Limitations, and future potential ........................................................................................... 46
REFERENCES ..................................................................................................................................... 48

v
 List of Tables
Table 1: Group of instruments. ............................................................................................................. 27
Table 2 : Uniform distribution of the standard error of the data ........................................................ 30
Table 3: Sample by region ..................................................................................................................... 31
Table 4: It shows how the respondents were divided into four groups based on their ages. ............. 32
Table 5: After the criteria were added, Alpha Cronbach's.................................................................... 35
Table 6: The normalized RBV regression coefficients between SIR and Attitude. ............................... 38
Table 7:The unstandardized regression coefficients for the RBV between IS and Attitude................. 39
Table 8: It has more specific details. Not a part of the HPWPS ............................................................ 42
Table 9: Regression coefficients for the HPWPS modulation ............................................................... 44

vi
 List of Figures

Figure 1: It shows how RBV modifies how IS and attitude affect RBV. ................................................ 40
Figure 2: It illustrates how SMT and RBV .............................................................................................. 41
Figure 3: It shows how RBV can alter HPWPS and attitude. ................................................................ 43

vii
 CHAPTER 01
INTRODUCTION
1.1. Overview/Background

Organizations focus on the performance of their employees to achieve strategic goals because
there is a direct relation between organizational performance and employees' performance.
Human Resources management (HRM) is a very important function in every organization. It
ensures employees have the tools, resources, and leadership they need to perform to their
potential. The study of human resource management is significant since it influences an
organization's decision to achieve market dominance. Without human resources management,
organizations would not be able to effectively recruit and retain employees, improve and
enhance organizational performance and maintain a healthy, accepting work culture and
environment. It is an integral part of organization and there is no doubt that HRM, the
management of people and work, and high-performance work systems (HPWS) are an essential
function in organizations that affects the quality of organizational performance (Boxall, 2012).
HR practices known as high-performance work systems (HPWS), high-involvement work
practices, and high-commitment HR practices helps organizations as well as employees to
achieve better outcomes. Among all the other practices, HPWS is expected to be better than
traditional HR practices as it incorporates a modern and faster work system to achieve the
organizational competitiveness. It is of high importance to go down in brief history of HPWS
because there has been a continuous interest of how to improve organizational performance by
effective management of work and human resource. The word high-performance work system
originated from US in an influential public report (America’s Choice: High skills of low
wages!)(Boxall, 2012) and is defined as, interconnected human resource practices designed to
enhance employees’ skills and efforts to make a difference in employee performance and
organizational productivity (Takeuchi et al., 2007). Boxall (2012) added that according to
Womack, Jones and Roos (1990), the key stimulus of HPWS was the rise of Japanese system
of “lean production” during 1980s which means continuous improvement in the process.
Included techniques were just-in-time inventory, team-based production, and quality circles
which led to improved quality, flexibility, cost and delivery. This way of doing business put
Japan and specifically, The Toyota Way, on the map. Toyota adopted and refined the lean
production process to more efficiently produce automobiles. During that era, US models of
work organization, in their key respects, such as their restricted use of workers’ capabilities

1
and discretionary effort were seen as inferior. Moreover, along with that challenge, another key
stimulus of change in work systems over the last three decades was the rise of advance
manufacturing technology (AMT), including robotics, computer numerical control (CNC)
machine tools, computer-aided design, and electronic data interchange systems (Boxall, 2012).

In recent years, this debate has been encouraged due to the rise of “offshoring’’ to low cost
producers like China and India etc. The initial emphasis was on managing the production
workers in manufacturing and more focus was given to the administrative work (Ulrich, 1997),
however, during the last three decades, HR professionals started planning strategic roles and
HPWSs became part of a broader perspective concerned with the human resource management
and their competitive performance right across manufacturing and services (Batt, 2002). For
several years, research has focused on HPWS and as mentioned earlier, this term refers to "a
particular combination of human resource approaches, work structures, and processes that
maximizes employee knowledge, competence, engagement, and flexibility" (Bohlander &
Snell). HPWS is a tool for improving organizational performance, employee productivity, job
satisfaction, and reducing workplace stress. In addition to that, these practices are linked and
intended to improve employees' abilities and motivation, as well as improve employee and
organizational performance (Appelbaum, Bailey, Berg, & Kalleberg, 2000), hence contributing
to organizations’ competitive advantages (Combs, Liu, Hall, & Ketchen, 2006). According to
some researchers, HPWS has a positive impact on employees and was found to contribute to
employees' well-being, particularly by improving their sense of value, worth, and security
(Wood & de Menezes, 2011), as well as increasing workplace engagement. However, other
researchers had a negative view of the impact of HPWS on employees' work-related well-being
and they found that HPWS practices create stress or emotional strain by increasing job demands
(Ehrnrooth & Björkman, 2012; Godard, 2001; Kroon, Van de Voorde, & Van Veldhoven,
2009). Although, HPWS has some negative impacts on employees but it is important to
understand that the positive impacts of HPWS on employees’ behavior and performance
outweighs its negative impacts.

Several studies have explored the benefits of HPWS and they agree that employees in an
organization that have implemented high-performance work systems are motivated and
committed not only to their own personal success but also to the prosperity of the company.
Being part of a business where the culture is based on commitment rather than control inspires
staff to buy into the businesses goals and make them their own. HPWS also helps in bringing
up a more efficient system in organization which makes the organization more attractive for

2
potential customers and employees (Zhang at el., 2013). Employees are more motivated and
committed. This system improves collaboration both inside and outside the company with other
organizations (Evans & Davis, 2005). A high-performance workplace is more likely to result
from the effective deployment of a HPWS inside a business. It is possible to enhance
organizational culture, day-to-day business processes, and value systems. Significant
improvements in operational and financial results become feasible and practicable. As a
dynamic and growing technique aimed at improving organizational performance, HPWSs have
become an important element of the human resource development process. HPWS firms
develop talent via the human resource department's method, which aims to improve employees'
talents, motivation, and opportunities. Before actually trying any execution, the transition
should be connected to the strategic planning process, such as transition is owned by upper
level supervisors, ensuring adequate help and services for the improvement initiatives, there is
slightly earlier and broader correspondence, groups are composed in a structured setting, and
developed ways to assess the outcomes of transformation are accessible. The CEO and
supervisory board must identify necessary reforms and explain HPWS's vision to the whole
business. The dedication of top management is critical to developing confidence between
employees and managers. Employees must be educated about the company's present
performance, capabilities, and where the organization should go in the future. This will also
allow employees to bring up more good plans and innovative ideas and think themselves for
the company’s future.

Many studies have found that HPWS are linked to various desirable outcomes, such as better
job performance, creativity and innovation (Jiang et al., 2013; Chang et al., 2014; Costantini et
al., 2017). Higher productivity and efficiency are among the benefits of a high-performance
work system. Profits rise as a result of these results. Other benefits of a high-performance work
system include: high product quality, high customer satisfaction, and lower employee turnover.
Outcomes of HPWS are mainly divided into three categories including, individual level, group
level, and organizational level outcomes. Each employee within an organization behaves in a
unique way, which has an impact on group dynamics and the organization as a whole. On one
hand, HPWS incorporates HR strategies that can increase individuals' knowledge, skills,
expertise, abilities, and motivation; and is connected with improved attitudinal performance.
On the other hand, HPWSs are also considered as tools to control the attitudes and behaviors
of employees through providing supportive working environments at the individual level
(Links et al. 2013; Shi and Li 2011). HPWS is associated with a variety of desired outcomes in

3
individuals including improved work productivity, originality, and inventiveness, increased
organizational commitment, increased staff morale, higher organization effectiveness, and
increased motivation and retention. The work atmosphere is effective and productive when
there are many happy and efficient people (Evans & Davis, 2005). Although it is hard for a
firm to examine every single employee's behavior, it is critical for a company to establish norms
and expectations that will attract individuals who exhibit good behaviors. Employees may be
hired based on their personality or how they respond to behavioral-based interview questions,
for example. At the same time, businesses may aid in the modification of individual behavior.
They do this through constructing a code of behavior, policy and procedural standards, and
incentives and punishments (Evans & Davis, 2005). In group level outcomes of HPWS,
organizations distribute decision-making throughout the organization and empower their
workers to provide excellent customer service while achieving optimal organizational
performance (Evans & Davis, 2005). Incorporating well-trained and supported self-managed
teams that enjoy autonomy and extensive discretion in decision-making displays HPWS's
strong faith in people. Creating employees’ team can lead to more initiatives, but effective self-
managed teams need substantial training and responsibility in reporting assignment progress
(Evans & Davis, 2005). Using business work teams that are highly taught and supported by an
organization's senior management team effectively fosters organizational responsibility.
Developing a collaborative accountability culture strengthens corporate principles while
increasing personal ownership at all levels. Studies on the role of HPWS at organizational level
has been under pressure over the last decades to illustrate the contribution of HPWS to
organizational performance (Batt and Colvin 2011; Hayton 2005; Messersmith and
Guthrie 2010). However, many studies undertaken have shown the positive relationships
between HPWS and corporate performance (Way and Johnson 2005; Wei and Lau 2010).
Given the role of HPWS at organizational level, scholars agree that HPWS can improve the
level of innovation and organizational commitment (Gittell et al. 2009; Herrmann and
Felfe 2014). It is said that the implementation of HPWS creates an organizational innovative
atmosphere through guiding and controlling the attitudes and behaviors of employees,
consequently improving organizational commitment and therefore enhancing innovation levels
(Gittell et al. 2009; Herrmann and Felfe 2014). With innovation, risk-taking and proactiveness,
companies are more inclined to expand markets, launch new products and make decisions
ahead of competitors, thus improving corporate performance (Hunt and Arnett 2006;
Messersmith and Wales 2013). HPWS is one of the sources from which firms can obtain a
long-term competitive advantage. At this level, HPWS is considered to establish a flat
4
organizational structure and break the traditional hierarchical management mode (Zhu et al.
2018). The managerial practices provide employees with safe working environments, offer
broad training projects and opportunities to participate in decision-making, competitive
payment and transparent communication channels (Zhu et al. 2018). Zhu et al. (2018) further
added that when different human resource management practices are integrated into a synergic
system and embedded in an organization, the system will be diverse, socially complicated and
inimitable. Therefore, the system can contribute to organizational performance such as firm
productivity and innovativeness, thereby helping the organization to obtain sustained long-term
competitive advantages and enhance performance (Becker and Huselid, 2006). Globally, high
performance work system also has impacted organizations, human resource and its
management. With increased adoption of HPWS system by several companies globally, global
labor mobility has been reduced, and employee productivity and organizational profitability
has increased which has led to quality products, better services and high competition among
companies in the same industries (Werner, 2011). As mentioned earlier, organizations that
adopt HPWS have a competitive advantage over those organizations that do not adopt HPWS.
There is increased creativity and innovation by companies in attempt to compete favorably
(Hazzan & Alkaim et al, 2012). This results in global market having a variety of products and
services for customers to select and also reduced prices of products and services since the
supply of goods will be high (Werner, 2011). Moreover, HPWS assists organizations by
creating a work atmosphere focused on fairness and justice, encouraging workers to stay loyal
to their companies. Human resource practices improve organizational performance by
increasing the knowledge and skills of employees (Becker 1975). Overall, HPWS improves
work happiness, affective commitment, and employee empowerment, all of which are
predicted to improve social behaviors.

In Pakistan, HPWS has not been given much importance and that is the reason that not only
manufacturing and service industry but almost every industry of Pakistan is still backward in
this technological and modern era. Pakistan is facing challenges relatively in low productivity
in business and lack of good jobs. Indeed, Pakistan has the lowest productivity in the region
but if they overcome these challenges, the outcomes will be great. Several organizations in
Pakistan use different human resource management approaches. Management in organization
thinks adopting HPWS is not only just waste of time but also money and efforts (Andersén &
Andersén, 2019). Recruitment and retention cultures are different because many companies
prefer existing employees than outside recruitment. Organizations have no or very few

5
incentive and motivation plan for their employees. Furthermore, many companies do not have
internal extensive training of employees. Management is controlled-based rather than self-
directed teams with decentralized decision making and status is distinct with a chain of
command with little differentiation or harmonization. Many HR managers in Pakistani firms
are still following the British administrative legacy in general, implying that they prefer
bureaucratic, paternalistic, and hierarchical structures, among other things (Andersén &
Andersén, 2019). Nowadays, organizations in Pakistan have been forced to embrace innovative
approaches to improve their internal performance as a result of globalization and strong
competition. Human capabilities are incomparable, distinctive, and may be a larger source of
competitive advantage than any other internal resource. From the resource-based view (RBV)
of enterprises to social exchange theory, strategic human resource management (SHRM)
research has gotten a lot of attention as a way to improve organizational performance via their
workforce (Hazzan & Alkaim et al, 2012). One of the most recent SHRM approaches for this
objective is High-Performance Management, which is meant to equip employees with
creativity, resourcefulness, and problem-solving abilities by emphasizing on quality and
adapting to fast changing situations. High performance worker system is the best strategy being
adopted globally by several companies. It is therefore imperative that Pakistan based
companies do the same to obtain competitive advantage and avoid being edge out of global
market. Pakistan should review internal labor markets such as there a robust recruitment system
among companies that focus on talents and interpersonal skills rather than just academic
qualifications. There should be no status barriers at work place and decision making should
involve everybody including junior employees. This is brought by reduction in position
differentiation and harmonization. Pay should be based on employee appraisal and work
output. There should be adequate employee compensation to enhance productivity. The
government of Pakistan should also enact laws that encourage companies to adopt HPWS
practices. If the above strategies are applied, there is no doubt that it will bear fruit for Pakistan
in the national and global market.

6
 CHAPTER 2
LITERATURE REVIEW

2.1. Human resource management

Human resource management (HRM) is linked with the all aspects of how people or human
capital is employed and managed within an organization. Several studies have argued that it
covers the activities of strategic HRM, human capital management, knowledge management,
corporate social responsibility, organization development, resourcing which includes
workforce planning, recruitment and selection and talent management (Boxall & Purcell,
2011). Learning and development, performance and reward management, employee relations,
employee well-being and the provision of employee services also comes under HRM. These
are based on human resource (HR) strategies that are combined with one another and aligned
to the business strategy. HRM is delivered through the HR architecture of systems and
structures, the HR function and, importantly, line management (Armstrong & Taylor, 2014).

The term “human resource” reduces people to the same category of value as materials, money
and technology – all resources, and resources are only valuable to the extent they can be
exploited or leveraged into economic value.’ People management is sometimes preferred as an
alternative, despite of its connotations; HRM is most widely used (Osterby & Coster, 1992).

Moreover, Schneider's (1987) added that organizations are the people who work in them; the
people who work in them make the place. So, whatever the term is used, the main approach
must be how to manage the human resource and also treat them as a human not a machine.
Because, positive job attitude of workers in an organization can be expected when they are
respected, given well training and guidance. Moreover, the firm’s competitive advantage in
marketplace in the modern era is derived from the firm’s human resource (James P. Guthrie,
2009).

In the literature over the last few decades, HRM has been extensively investigated. And from
several studies, it can be concluded that human resource management (HRM) is a holistic and
well-coordinated approach to people's employment and development (Wood, 1999). It can be
considered a philosophy of people management because it is concerned with the contribution
it can make to improving organizational effectiveness through people, but it is also, or should
be, concerned with the ethical dimension – how people should be treated in accordance with a
set of moral values (Armstrong and Taylor, 2014).

7
2.2. The development of the HRM concept
Prior to the concept of HRM, the concept of welfare was practiced during 1920s which was
replaced by labor management during 1940s. Afterwards, with the industrial revolution and
emergence of neo-classical school of thought, the area of labor management was expended to
personnel management. During the era of personnel management, the major contributions in
this field were from the behavioral scientist i.e., Elton Mayo whom ‘human relations method
to managing people’ was based on the finding of Hawthorne studies from 1920s. Members of
this school believed that job satisfaction was closely tied to productivity, and that employees
would produce more if someone they respected cared about them (Armstrong and Taylor,
2014).

Bakke (1966) made an early reference to human resources. Later, Armstrong (1977: 13)
recognized that "the key resource in an organization is people." HRM, on the other hand, did
not completely emerge until the 1980s, by Charles Fombrun and his colleagues (known as
founding fathers of HRM) in the 'matching model' and Michael Beer and his colleagues in the
'Harvard framework' in US academics. The matching model which is considered the hard
model of HRM was proposed in Michigan University in 1984 which is also called the
‘Michigan School Model’. The primary focus of this HRM model is to treat employees as a
way to reach organizational goals. This human resource management model stresses the
strategic management pressure on HR teams. In this system, the harmony between
organizational strategy and HR practices is of significance. It supports unifying the HR policies
and practices with organizational strategies. (Moriss, 2021). On the contrary, the Harvard
framework which is one of the most influential models of HRM was initially developed in 1984
at Harvard University. It is operating with five significant components: situational factors,
stakeholder interests, HRM policies, HRM outcomes, and long-term consequences the
organization is set out to accomplish (Beer et al 1984).

Beer et al (1984) went on explaining that in this framework, the correlation between situational
factors and stakeholder interests has strong effects and also helps shape HRM policies, and to
lead to the desired HR outcomes, those policies should be implemented (commitment,
competence, congruence, and cost-effectiveness). Moreover, aspiring to improve these four Cs
will lead to favorable consequences for individual well-being, societal well-being, and
organizational effectiveness, the creators of this framework said. This model nurtures
cooperation and motivational practices and empowers general managers to get involved in the
HR aspect of the business. This model is established on the belief that human resources can

8
give any organization a significant competitive advantage, so, therefore, the employees should
be treated as assets rather than the costs.

Several researchers have investigated HRM during the last decades and they argue that HRM
is seen by some personnel managers as just a collection of initials or old wine in new bottles,
according to Armstrong (1987). It could be nothing more than another name for personnel
management, but it does have the advantage of emphasizing the importance of considering
people as a valuable resource whose management is a direct concern of top management as
part of the enterprise's strategic planning processes. Although the concept is not new, it has
received insufficient attention in many organizations (Boxall & Purcell, 2011).

2.3. GOALS OF HRM

According to Armstrong and Taylor (2014), the goals of HRM includes;

➢ Help the organization achieve its goals by developing and implementing human
resource (HR) strategies that are on the same line with the business strategy (strategic
HRM);
➢ Contribute to the development of a high-performance culture;
➢ Create a positive employment relationship and a climate of mutual trust and honesty
between management and employees;
➢ Encourage the use of an ethical approach to people management

All organizations owe it to their stakeholders to perform admirably. They rely on the quality,
dedication, enthusiasm, expertise, and skill of the people who work in them at all levels to
accomplish this. The message of the resource-based perspective is that HRM adds value and
aids in the achievement of long-term competitive advantage through the strategic development
of the organization's rare, difficult-to-imitate, and difficult-to-substitute human resources
(Boxall & Purcell, 2011). 'The distinctive feature of HRM is its assumption that improved
performance is achieved through the people in the organization,' Guest (1997) argued.

In the modern era, HRM has largely become something that organizations do rather than an
aspiration or a philosophy and the term is generally in use as a way of describing the process
of managing people (Boon et al., 2019). Emphasis is now placed on the need for HR to be
strategic and businesslike and to add value, i.e. to generate extra value (benefit to the business)

9
by the expenditure of effort, time and money on HRM activities (Boxall & Purcell, 2011).
There have been plenty of new interests, concepts and developments, including human capital
management, engagement, talent management, competency-based HRM, e-HRM, high
performance work systems, and performance and reward management. But these have not been
introduced under the banner of the HRM concept as originally defined (Armstrong &Taylor,
2014). If appropriate HR policies and practices are implemented, it can be assumed that HRM
will have an impact on firm’s performance.

Many findings have focused on the performance effects associated with a set of human resource
practices named as high-performance work systems (James P. Guthrie, 2009). A very large area
of how these high-performance work system practices effect the employees’ behavioral
outcomes still remains to be uncovered. It has led to the evolution of emerging area of high-
performance work system. High-performance work system is a system which is based on the
HRM techniques, work structures, and processes that improve employee competence,
knowledge, dedication, participation, and flexibility.

2.4. High Performance Work System (HPWS)

In today’s modern and intense competitive business environment, the survival and success of
organization has become very difficult. The human capital of organization is very necessary to
shape the future success and long-term survival (Combs et al., 2001). To survive in the long
run, organizations need well trained, skilled and empowered employees to perform their tasks.
Employees have a range of superior skills, knowledge and abilities that can be used at work for
better outcomes (Maung, 2020). Maung (2020) added that organizations focus on the HPWS
to extract excellent performance of their employees. He further argued that employees have the
ability of continuous improvement to achieve higher levels performance and also, they are
capable of creating a competitive advantage which is difficult for others to imitate. The HRM
literature emphasizes on the importance of employees in enhancing firm performance or even
creating a competitive advantage. Researchers have argued that the implementation of ‘high-
involvement work practices’ (e.g., Delaney and Huselid, 1997) or ‘high-performance work
practices’ (e.g, Huselid 1995) are more likely to result in increased organizational performance
and outcomes.

Many researchers have explored that a high-performance work system is a collection of HRM
practices that promote employees’ skills, motivation, and involvement in order for a company

10
to gain a sustainable competitive advantage (Datta et al., 2005; Guthrie, 2001; Huselid, 1995),
and includes things like job security, extensive training, teams and decentralized decision
making, information sharing, and so on (Datta et al., 2005; Guthrie, 2001; Huselid, 1995;
Zacharatos et al., 2005). Maung (2020) argued that different scholar has agreed upon staffing,
training, decentralized decision making, self-managed teams, open communication, flexible
job assignments and compensation as practices of HPWS. However, Boselie & Dietz (2003)
has a different point of view on practices of HPWS. They also include employee development
and training, participation and empowerment, information sharing and compensation in
HPWS. Lawler (1992) and Tomer (2001) emphasize that high performance work system
(HPWS) is a managerial approach to achieve high performance through people. Sels et al.
(2006) added that HPWS is a combination of HR practices that plays a key role in increasing
firm’s performance through effective involvement of employees. These HR practices utilize
the knowledge, skills and abilities of employees for the benefits of organization. Huselid’s
(1995) finding shows that synergies among practices of HPWS will eventually increase a firm’s
performance.

A HPWS includes assessing what jobs a firm needs to happen, developing the jobs, finding and
recruiting the type of person necessary to do the job, giving feedback, and suitably rewarding
employees because then they are retained within organization. These practices lead to some
core benefits for both the employees and organization. For employees, on one hand, it leads to
more involvement in the job, experience more growth and satisfaction in doing job and be more
valuable as a contributor (Kehoe & Wright, 2013). On the contrary, it leads organizations to
higher level of productivity and delivers high quality. Also, it creates more flexibility and
increase customers’ satisfaction (Delery & Shaw, 2001). In addition to that, the highest level
of employee performance can be expected as outcome when these practices of HPWS are
aligned with the requirements of employees (Combs et al., 2001). HPWS can encourage
employees to share knowledge and inspire them to come up with new ideas (Chiang et al.,
2015). Therefore, HPWS is defined as, it a system that comprises interdependent HR practices,
and it leads to better performance through the synergies among these HR practices.

According to previous studies, companies that use HPWS are more likely to invest in their
workers, respect employee engagement in decision-making, and satisfy employees’ needs for
advancement and development (e.g., Giannikis and Nikandrou, 2013; Rose and Wright, 2005).
As a result, it can be argued that implementing HPWS is critical to encouraging employee
innovation. Though it may be impossible to calculate all of HPWS' "guiding principles," there

11
are a few important ingredients. Each of HPWS's qualities is significant in and of itself.
However, in order for a system to be effective, all of these elements must be combined (Osterby
& Coster, 1992). To guarantee that all of the elements work together and are tied to the
overarching strategic objectives, accurate planning is required. Domestic and foreign
interconnections should be compatible with HPWS.

To sum up, high-performance work practices (HPWPs) improve organizational performance

using two interactive and overlapping processes. First, they help increase the KSAs of
employees needed to perform job tasks, increase motivation, and opportunity to do so (Delery
& Shaw, 2001). Second, HPWPs improve the internal social structure of organizations, which
increase good communication and cooperation among employees (Evans & Davis, 2005). Both
these processes increase satisfaction at work and help employees work more productively and
make better decisions. This helps reduce employee turnover and improve organizational
performance against competitors (Combs et al. 2001).

In simple words, the essence of HPWS is to boost up productivity of the human resource and
their effectiveness, to help employees in identifying the firm’s goals and to work hard to
accomplish those goals (Maung, 2020). An essential discussion concerns how to motivate and
effectively prepare employees for the future. This can be done through some practices of
HPWS. Those practices of High-Performance Work Systems include recruitment and selection
(Martocchio, 1998), training (Hussain, 2011), ensuring employee security (Team, 2021),
teamwork, performance management (Harley, Sargent, & Allen, 2010), compensation
(Michael, Prince & Chacko, 2016), and participation of employees etc. All of these practices
of HPWS are associated with reduced employee turnover and increased productivity, cash
flow, financial performance, and market value (Wang et al, 2011). Batt (2002) found that ‘high
involvement’ practices such as compensation, teamwork, and training are linked with reduction
in employee turnover and increased sales growth.

Now, to have better insights on how these practices lead to better performance of employees
and their behavioral outcomes, they are discussed below in more details.

2.5. Recruitment and Selection

Recruitment and selection are the process of attracting a labor pool for a vacant position or
different vacant positions and then choosing a god fit from candidates and offering then job
(Martocchio, 1998). The main reason of recruitment is to create an opportunity for hiring the

12
best fit for organization, while the selection process is adopted to select skilled workers and fill
in various vacant positions in the organization (Brown et al., 2019).
To attract a skillful pool of employees, their satisfaction from recruitment and selection and at
job should be a priority for organizations (Harley, Sargent, & Allen, 2010). Among high-
performance work system practices, recruitment and selection is the most prominent one
because it portrays the first impression of your organization to the candidates. First of all, to
create a good relationship and trust between the employer and employees, organizations must
avoid nepotism and the selection of candidates should be based on merit. Avoiding nepotism
will help create a reliable environment of fair and just within organization. This not only create
trust between the employer and employees but also a sense of pride in employees because they
will think they are hired based on merit (Harley, Sargent, & Allen, 2010).
In recruiting human resource, organizations always go for right person for the right job. They
always hire those candidates who are fit for the job. Moreover, Wang et al (2011) added that
recruiting the right person who is open to learning new skills and knowledge, formal and
informal training, and to performance assessment and feedback is really important for
organizational well-being and performance. So, to sum up, firms can have better chances of
recruiting a candidate fit for the job when they avoid nepotism.

2.6. Performance Management

Performance of an employee is an essential building block of an organization. In the literature
of performance management (PM), several scholars agree that an effective performance
management system for employees is very useful for achieving organizational effectiveness in
the modern management literature and practice (Awan et al. 2020). Performance management
is defined as “identifying, measuring and developing the performance of employees and
aligning them to the strategic goals of organization” (Brown et al., 2019). PM includes a
number of HR initiatives including KPIs and objectives, performance reviews, feedback etc.
Moreover, performance management sometimes also focuses on the performance of
organization, a department, an employee, or the processes in place to manage particular tasks
(Maake, Harmse, Schultz, 2020). It ensures that whether or not all the different undergoing
activities efficiently and effectively within a proper time manner meets the organizational
goals.
Performance management or PM also drives organizational outcomes by motivating employees
towards rewards for achieving organizational tasks in duly time manner. Employees are

13
rewarded with bonuses and favorable reviews for their good performances and contribution to
organization. In return, this boosts employees’ morale, productivity and performance (Harley,
Sargent, & Allen, 2010). In addition to that, Awan et al. (2020) argued that research has found
that employees who receive regular feedback on their strengths are on average 8.9% more
productive and profitable. Performance management and development of work not only
provide employees the opportunity to learn and grow but also help enhance their intrinsic
motivation which eventually leads to greater productivity level, better organizational culture,
and most importantly, positive behavior of employees (Boxall & Purcell, 2011).
2.7. Empowerment
Wang et al. (2011) defines empowerment that it is perceptions of the degree to which
employees are empowered by their leaders. He further argued that, in empowerment, the major
emphasis is on the extent to which employees are given autonomy in their work. This includes
participation in decision-making and informing employees of organizational goals. According
to many scholars, job satisfaction is considered as one of the earliest anticipated outcomes of
empowerment. By sharing managers’ decision-making power with employees not only
enhance their performance but also increases their job satisfaction (Spreitzer, Kizilos and
Nason, 1997). Empowerment suggests that decision-making processes are expected to happen
at many levels of the organization. However, a key principle of employee empowerment is
providing employees the chance for making important decisions and helping ensure those
decisions are correct and aligned with the organization (Wang et al. 2011). Robert et al. (2000)
also suggested that employees readily accept empowerment and it results positively in desirable
work-related outcomes in organization.

2.8. Training
Survival of organizations in this modern era depends upon the degree to which their employees
possess knowledge, skills and abilities. Organizations need to promote the skills and
knowledge of their human resource to survive longer and achieve success in the market.
Training is one of the critical human resource functions which upgrades the knowledge and
abilities of employees and boosts the job execution of human resource because training has
direct effect on job satisfaction as well as employees’ performance. (Hussain, 2011). The
concept of training has been defined broadly by different scholars. Although, it is basically
encouraging and motivating employees to improve their outcomes or performance by learning
initiatives (Roscow and Zager, 1988), but it also includes the notion of pay for knowledge

14
which motivates the employees and rewards them for increasing their competencies that can
be used in the workplace (Martocchio, 1998).

Mondy & Martocchio (2016) argue that basically, training and development is the consistent
efforts of organizations to increase the knowledge, skills and abilities of their human resource
and most importantly, the performance of organization. To have an edge over competitors,
training is considered as one of the factors to put emphasis on by organizations because it
upgrades the required skills of employees to tackle with specific situation or problems and
perform the tasks effectively (Maung, 2020). Training could be regarded as a very important
practice to an orderly and predictable working environment, because when employees are
provided with a suitable training, they are more likely to know about their key responsibilities
i.e., what to do and how to do it (Wang et al. 2011). However, the impact of training on
workplace predictability would depend on its content. For example, training which enhances
employees’ knowledge of production processes and an understanding of where their jobs fitted
into workplace-wide operations will have a stronger impact instead of training which
emphasized narrow technical skills (Harley, Sargent, & Allen, 2010).

2.9. Teamwork
Job satisfaction and motivation at work is closely related to effective team implementation.
Teamwork enhances motivational properties at work and increase job satisfaction (Griffin,
Patterson and West 2001). Parker and wall (1998) argued that teamwork generally involves
groups of people who are interdependent and work cooperatively to achieve their groups’
outcomes or desired goals. Therefore, teamwork is selfless and mostly, team members focus
on the end goal. Group or team members despite any conflict, cooperate with each other and
also provide constructive feedback on work. Cohen & Levesque (1991) added that a group acts
more like a single agent with one belief, goals and intentions of its own that are above everyone.

However, cultural factors (i.e., communication and customs etc.) can influence the
effectiveness of teamwork (Wang et al. 2011). If they are managed well, as a result of this
practice of high-performance work systems, employees will feel more supported, their
productivity level will be increased, their behavior will be changed and they might tend to help
create a good organizational culture which ultimately will lead to better organization
performance.

15
2.10. Compensation
Compensation refers to the reward that an employee of an organization receives in return for
their services provided and is frequently the cornerstone of a high yielding performance at
workplace (Michael, Prince & Chacko, 2016). A compensation package doesn’t always infer
money related compensation. Adaptable advantages, clinical consideration, balance between
serious and fun activities, and worker rewards are additionally included (Michael, Prince &
Chacko, 2016). The most important resource of an organization is its human asset and thus
they should be overseen effectively to guarantee great efficiency. Employees today work for
cash, yet additionally put equivalent worth on different parts of pay. Pay assumes a huge part
in impacting position fulfillment. It animates employees to work more enthusiastically, along
these lines expanding efficiency and improving position execution (Michael, Prince & Chacko,
2016). According to Sudiardhita et al. (2018) employee compensation has two components:
first one is direct payments which includes wages, salaries, incentives, commissions and
bonuses, and the second one is indirect payments which covers financial benefits, such as:
insurance and paid vacation by employers.

From studies undertaken, it has been found that a decent compensation bundle ensures lowering
the company’s turnover rate (Michael, Prince & Chacko, 2016). Employees will be more
inclined to stay in their roles, perhaps saving money on attrition costs. Compensation is the key
motivator for employees to continuously push themselves to achieve greater heights. In
addition to that, it gives them an incentive to keep working hard and pushing on to the next
goal (Michael, Prince & Chacko, 2016). Workers are the resources of any association.
Organizational usefulness relies upon employees’ exhibition. Employees are motivated to
come to work when they are well compensated. Their morale is still high, and their job
satisfaction is increasing. Employee morale is high when they are motivated to come to work
every day and perform to the best of their abilities.

The above discussed practices of high-performance work system play a significant role in
boosting employees’ performance, increasing their level of motivation and help them
contribute in organizational goals. Not only that but also practices of HPWS affect the
behaviors of employees (Michael, Prince & Chacko, 2016). On one hand, some employees feel
satisfied with these practices, but on the other hand, some employees might burnout, causes
dis-engagement and sometimes, conflicts among colleagues or managers and employees. These
behavioral outcomes are further clarified below.

16
2.11. Importance of High-Performance Work System
As mentioned earlier, HPWS plays a vital role in the development of employees and their
behavior. When this system is adopted in any organization, their employees tend to be more
creative and come up with innovative thinking. Employees’ creativity refers to employees’
ability to come up with new and beneficial ideas. It is thought to have a significant impact on
organizational innovation (Amabile et al., 1996; Jiang et al., 2012) and business performance
(Gong et al., 2013). Given the significance of employee creativity, a number of studies have
looked at its causes, including empowering leadership (Harris et al., 2014), team-member
interchange (Liao et al., 2010), work unhappiness (Zhou and George, 2001), and employee
learning orientation (Gong et al., 2009). Extensive training may expand the information and
abilities required for creativity (Amabile, 1983) and assist employees in making connections
between their current and new knowledge, resulting in innovative ideas and solutions (Chang
et al., 2014). Employees’ attitudes and behavior is anticipated to be influenced by management
systems since they are members of their own organizations and are exposed to a variety of
management methods (Chiang et al., 2015). As a result, it’s critical to look at how management
systems, such as HRM systems, affect employee creativity. HPWS has been discovered to
stimulate innovative ideas as systems of work practices that make a significant contribution to
improved organizational performance (Boxall and Macky, 2009).

There has been an increased recognition that more attention and focus need to be paid to HPWS
because it helps employees to be more stable throughout their careers. Employment stability is
one of the benefits of HPWS because it encourages workers to have a long-term view of their
careers (Pfeffer, 1998), take initiative, and participate in innovative behavior. The ability to
engage in decision-making supports information acquisition, sharing, and combining, which
enhances learning behavior (Edmondson, 1999) and hence enables creative behavior (Hirst et
al., 2009). Employees can benefit from sharing information since it allows them to absorb fresh
ideas and expertise from others, allowing them to develop more innovative ideas (Chiang et
al., 2015). Another significant aspect of HPWS is high-quality work. A properly-designed work
may give employees more self-determination and feedback, as well as a greater sense of
importance. Moreover, a HPWS also helps increase employee competencies, commitment and
productivity (Boxall and Macky, 2009). It encourages employees to improve their knowledge,
skills and abilities required for the job and also reduce the turnover of potential employees.
One of the effective functions of HPWS is motivation. An effective HPWS motivates

17
employees to work hard, increase their productivity, and complete the tasks in timely manner.
A motivated employee is a good asset to organization because he is always productive and
creative (Pfeffer, 1998).

In the association between HPWS and employee creativity, perceived organizational support
plays a moderating function. Employees’ perceptions of how much their company values their
contribution and cares about their well-being are referred to as perceived organizational support
(Bowen and Ostroff, 2004; Eisenberger et al., 1986). It symbolizes the interaction between
employees and organizations (Eisenberger et al., 1986). Employees’ perceptions of
organizational support are influenced by their company’s willingness to recognize and reward
employees’ efforts on the job, as well as fulfill their demand for praise and acceptance
(Eisenberger et al., 1986). Workers feel supported by their companies and consider themselves
part of a social-exchange relationship when HRM methods emphasize investment in
employees, participatory decision making, and the availability of growth possibilities (Allen et
al., 2003; Paauwe et al., 2013). As a result, people who work in a successful HPWS are more
likely to see their employers as supportive and are better equipped to demonstrate creativity
and innovation.

2.12. HPWS and employees’ behavioral outcomes

In today’s world, organizations are dealing with changes brought on by increased competition,
consolidations and acquisitions, shifting company sectors, and changing worker
socioeconomics. Every company strives to get the desired outcomes and achieve the targets set
by top management. Company targets include growth, profit and employee welfare,
productivity and so on (Sudiardhita et al. 2018). Among all, the role of human resources in a
company is very important and it is critical for organizations to establish their competitive and
benefits plans, empower their human workforce, train them according to needs of job and so
on in order to attract and retain appropriate talent, increase return on human resources, and
increase employees’ job fulfillment. Most of times, the appraisal systems of supervisors and
subordinates are not the same as those at lower levels. Regarding the issue of HR management
in a company that should focus closely on performance, there are several factors that need
attention and which can support the performance of an employee and bring positive or negative
behavioral changes (Sudiardhita et al. 2018). As mentioned earlier, those factors are team work,
merit-based recruitment and selection, performance management, compensation, work

18
motivation, job satisfaction and so forth. Some of the behavioral outcomes of these practices
are briefly discussed below.

Sense of pride - As mentioned above, a merit-based recruitment and selection not only helps in
building a good relationship of trust between employer/manager and employees or subordinates
but also gives a feeling of pride to employees. Employees’ behavior is highly affected by the
recruitment and selection process of the organization. Organizations are more likely to hire and
retain satisfied employees when they recruit and select candidates effectively. And,
productivity and financial performance of a firm is also influenced by the effectiveness of
organizational selection system (Harley, Sargent, & Allen, 2010).

Employee retention and confidence at work - To retain talented and key employees and then
keep their motivation level high, job security plays a key role. When the employees feel secure
in their job, they can focus more effectively on work and produce better-quality results (Kehoe
& Wright, 2013). Job security is assurance an employee has that they will be able to continue
working in this firm for the foreseeable future. It means employees are confident that their
employment status with a company will not change, regardless of any outside forces that might
impact the business (Team, 2021). Employment security is important for both parties. This can
help employers attract and retain talent, keep a productive workforce and encourage loyalty
among employees etc. (Team, 2021). By practicing HPWS, firms can ensure employee security
by training the employees to be more productive and be a valuable asset to the company. They
will be reliable and will work exceptionally in duly time manner.
Reduced absenteeism - The job involvement and behavior of employees can also be noticed
from their absenteeism. Organizations figure out how much their employees are interested in
their job by looking at how much absentees they make. HR practices such as bonuses on good
attendance at work may directly affect the rate of absenteeism of worker but extremely high
level of absentees will affect the benefits employees receive (Kehoe & Wright, 2013). On the
one hand, not only employees can contribute well to organizational goals when they are present
at work every day but also on the other hand, they are more likely to provide benefits to their
organizations specifically through their activities and tasks at their job (Kehoe & Wright,
2013). So, HPWS has a positive impact on absenteeism of employees and it motivates them to
come to work daily and get rewards.
Job satisfaction and motivation - Several studies have explored the effects of compensation
and incentives on employees’ behavioral outcomes and they agree that compensation is a

19
powerful transmitter of authoritative intentions, and organizations reward employees for
consistent commitments to hierarchical goals. People are generally inclined to do better when
they see that they will receive enough compensation or returns from their efforts (Boxall and
Macky, 2009). Job satisfaction is an important aspect in inspiring individuals to achieve
company goals and objectives in this environment. Job satisfaction is basically the extent to
which employees feel positive or negative about their work. The level of job satisfaction (high
or low) of workers indicates the level of their efforts to achieve organizational goals. As
mentioned earlier, job satisfaction is considered as one of the earliest anticipated outcomes of
empowerment (Spreitzer, Kizilos and Nason, 1997), but compensation is also a major factor in
determining employee work satisfaction (Michael, Prince & Chacko,2016). Michael, Prince
& Chacko (2016) further added that this is basically due to two factors. On one hand, money
is a vital tool for meeting employees’ requirements and on the other hand, employees think of
pay as a reflection of management’s interest in them. On the contrary, in the absence of a strong
compensation and incentive plan, the performance and efficiency of human resource in
organization can suffer greatly. In essence, employees will feel underappreciated and their job
satisfaction level will get low. This may also cause dissatisfaction among coworkers and lower
company morale. Moreover, when the reward vs effort ratio is low, employees are driven to go
elsewhere for work. And, Employees’ turnover costs the organization a lot of money
(retraining, relocating and time wasted). So, it can be dealt with by a good amount of
compensation or incentives and workers will be more motivated to come to work and be
productive.
Furthermore, empowerment, job satisfaction, teamwork and compensation also have a huge
impact on the work motivation level of employees. Precisely, teamwork is one of the major
factors which plays a key role in motivating employees and job satisfaction (Griffin, Patterson
and West 2001). In teamwork, employees with no experience work together with seniors which
ultimately leads to more learning and motivation in newly hired employees. Regarding the
definition of motivation, Sudiardhita et al. (2018) said that motivation is the urge of employees
to achieve goals with perseverance. So, the above-mentioned practices of HPWS leads to
higher level of motivation and workers simply put more efforts and are more productive when
their motivation level is high. Moreover, they also tend to learn new skills to improve their
selves with time.
Knowledge, skills and abilities - Training is considered as a core practice that contributes to
gains in competitive advantage (Schuler and MacMillan, 1986), and also productivity and

20
organizational performance which by some researchers are considered dominant argument to
justify training (Scott and Meyyer, 1991). Training and development of employees is also
considered as a critical part of HPWS. Many employees view training as a right of membership
and benefit of employment (Scott and Meyyer, 1991). It is said that training is a need for
employees because it boosts up productivity, skills and knowledge of employees. Taylor (2005)
added that employees take training as an investment in them. They consider it a reward for
employees’ good performance and loyalty towards organization and also an indicator of
promotion within the firm. Hence, it leads to both positive work behavior of employees and
also organizational outcomes.
Innovative work behavior - Training, teamwork and motivation are also some factors
influencing the innovative work behavior of employees. By providing training to employees,
effective team implementation (Griffin, Patterson and West 2001), and increasing their
motivation level through a range of compensation and incentive plans not only boosts up
performance but also helps improve employees’ innovative work behavior (Battistelli et al,
2019). Furthermore, Battistelli et al. (2019) added that employees, especially newly hired are
more likely to have work-based learning in teams, come up with new and productive ideas, and
perform well which eventually helps in better organizations outcomes.

All the behavioral outcomes of employees are summed up in tabulated form below.

S/No. Writer Article/ Research HPWS and

paper Behavioral
Outcomes

1 Harley, Sargent, Employee Helps build a

& Allen, 2010 responses to ‘high relationship of
performance work trust among
system’s practices employees and
managers and
also gives a
sense of pride in
employees.

21
2 Kehoe & The impact of high- Helps reduce
Wright, 2013 performance employees’
human resource turnover,
practices on encourages
employees’ loyalty and
attitudes and make them
behaviors confident at
work by
ensuring job
security.

3 Kehoe & The impact of high- Motivate

Wright, 2013 performance employees to
human resource come to work
practices on daily and reduce
employees’ absenteeism
attitudes and
behaviors

4 A Dimensional Increase job

Spreitzer, Analysis of the satisfaction at
Kizilos and Relationship work,
Nason, 1997 between motivation level
Psychological of employees,
Empowerment and and
Effectiveness, productivity.
Satisfaction, and
strain.
Boxall and
Macky, 2009
Research and
theory on high‐
performance work
systems:
progressing the

22
 Michael, Prince high‐involvement
& Chacko,2016 stream.

Impact of
compensation
package on
employee retention

5 Schuler and Gaining Boosts up

MacMillan, Competitive productivity,
1986 Advantage through increase skills
Human Resource and knowledge
Management of employees.
Practices

The Rise of
Scott and
Training Programs
Meyyer, 1991
in Firms and
Agencies: An
Institutional
Perspective

6 Griffin, Job Satisfaction Helps newly

Patterson and and Teamwork: hired employees
West 2001 The Role of with no
Supervisor Support experience to
learn more and
come up with
Information
sharing and innovative ideas
innovative work
Battistelli et al,
behavior: The role
2019
of work‐based
learning,
challenging tasks,

23
and organizational
commitment.

24
 CHAPTER N0. 3
METHODOLOGY

The several models and empirical techniques used in this study effort are covered in-depth in
this chapter. An in-depth discussion is given on the methods used to collect the data, the
variables employed, the statistical analysis, and other topics. The problems of various
methodological approaches, including data collecting and analysis, research design, and others,
have all been thoroughly discussed.

This section's main goal is to describe the processes used in the research and why they
were used. With a focus on Pakistan's banking sector, this researcher describes the technique
used to look at how SHRM affects an organization's performance. Doing this eradicates any
issues that could have developed due to a lack of precise information about SHRM in the
service business and any prior prejudice. In certain situations, the report will also briefly
explain the researcher's methodology for arriving at important findings.

3.1. Population, sample and data collection

This study is unique because it investigates the sector-level implications of SHRM from
a strategic stance rather than from a functional one (Huselid, 1995). To conduct this study,
surveys were sent by mail to Pakistani bank executives at various levels of management. Every
bank listed on the KSE is examined as part of this probe. Three separate components were
combined into one to create a self-reporting questionnaire. We could learn more about people's
ages, genders, jobs, levels of education, and earnings by incorporating a section on
demographics. Each questionnaire was accompanied by a cover letter outlining the procedures
and the study's goals and emphasizing how crucial it was for responders to be truthful and offer
full, correct responses. The supplied questionnaire was filled out with pencil and paper. It was
crucial to categorize the devices to prevent responders from being overwhelmed by various
options. Questions on current HR practices and the variables affecting RBV are asked in the
first section of the questionnaire. The second section discusses the results of human resources
(HR), and the third piece is about how employees perceive the business.

3.2. Population
Managers from commercial banks listed on the Korean Stock Exchange were
participants in the study (KOSEQ). Pakistan has 36 commercial banks in total, some of which
are state-owned, some of which are private, some of which are international, and some of which

25
are regional. The Karachi Stock Exchange is presently made up of 25 commercial banks (KSE).
In the United States, there are 9,087 different varieties of commercial banks. The following
businesses and organizations have 8,296 branches in the United States. There are no bank
branches in remote regions where the government has taken over banking operations. Most of
the company's branches may be found in populated locations. The total quantity of money
deposited at each branch determines the number of managers assigned to that location. This
led the research to interview city managers in the four provinces. Three different banking
districts were assigned to these supervisors.

3.3. Sample
Researchers have no choice but to use sampling since they cannot get data from the
whole population. The primary goal of sampling is to choose a sample representing the
population. The sample must first properly represent a relatively tiny fraction of the population
in order for it to accurately reflect the whole population. After that, research using samples will
be able to look into the entire population. A variety of techniques can be used to obtain data
samples. It is more inclusive to refer to both probability sampling and non-probability sampling
as "samples" together. The likelihood of being picked for the sample when utilizing the
probability sampling method is inversely correlated with the population size. There is no
assurance that each member of the population will have an equal chance of being picked for
inclusion in the sample using this sampling technique. A typical type of non-probability
sampling is the practice of "convenience sampling." We go out to individuals of the general
public who aren't difficult to contact to gather information in this manner and ask them for their
opinions. Using a simple sample strategy, data from senior and middle-level managers are
acquired for the current study. Despite this, much effort was made to make sure the sample is
representative of Pakistani bank managers.

Due to the banks, Pakistan's territory has been divided into three distinct portions
(south, central, and north). Each of the three main market segments on the KSE has 25 banks
listed. Because gathering information on every high-level and middle-level executive in the
area is almost impossible, we concentrated on the most populous cities in each province.
However, due to their increased prevalence in metropolitan areas, they are simpler to see there.
To collect data, 1,000 questionnaires were distributed through the mail, email, fax, or in-person
visits to various locations on the river's south, middle, and north sides. Once every two weeks,
a polite reminder email was sent to the main contact. Following that, the principal contact
phoned the poll participants who had provided their phone numbers and other contact details.

26
3.4. The survey's criteria and questions
The raw data were put into the statistical program as soon as the surveys were returned.
Out of the 1,744 replies, only 40 were selected for the analysis. There were 1,704 total replies
to the survey. More than 56% of the people that were surveyed responded. According to
Frohlich (2002), the number of respondents to a survey may be used as a measurement
instrument to assess the calibre and applicability of a research study. People are more inclined
to participate in the study's completion and submission if they strongly believe in its
applicability and importance.

3.5. Instruments
Several unique gadgets were used to gather data for this investigation.

▪ Techniques for creating more productive work habits

▪ Human resources activities' results
▪ Results of the business, whether they are viewed as being real or not, financial or not
Always pay special attention to your data and variables (Huselid, 1995).

Variable Instrument Author No.

of
Item
s
1- Huselid, 1995

High performance work practices 94

system

1-Dyer and Reeves, 1995

Organizational 1-Delaney and Huselid, 10
subjective or Non- 1996 2-Kuldeep Singh,
financial performance 2004
Control / Demographic Variables Self items / Huselid 1995 04

Table 1: Group of instruments.

3.6. Dependable Variables

3.6.1. Areas in which the organization fails
The organization's performance was represented by the following three "stand-ins": 1.
An organization's performance is a matter of subjective judgment. 2. The stability of a
company's financial condition. 3) Its operating elements (revenue per employee)

27
3.6.2. Organizational subjective performance

The assessed an organization's performance compared to its competitors in the same

industry. Hence the measurements they employed were comparative. This data type is widely
utilized as a benchmark even if it has flaws like measurement bias and others. The degree of
success attributed to an organization correlates moderately to significantly with the objective
indicators of the company's performance (Powell, 1992). It has been shown that qualitative
assessments of an organization's performance do not necessarily agree with quantitative
assessments of that achievement (Dollinger and Golden, 1992; Powell, 1992). We used a 10-
point scale with a range of 17.1 to 17.10 to measure the subjective performance of an
organization. People were asked to contrast their bank's performance during the previous three
years with their rivals' banks in some categories, such as the capacity to fulfil financial
obligations, the degree of customer satisfaction, and other areas.

It is easy to tell how the firm performs from the outside perspective. The launch of new
goods, profitability, market share, and the degree of customer happiness are just a few ways a
company's success may be assessed. Each of these factors contributes to a company's overall
success, including its capacity to retain staff, increase sales, increase market share, generate
profits, foster excellent working relationships between managers and the staff they supervise,
and provide high-quality goods and services. Delaney and Huselid's study from 1996 found
that an organization's personal effectiveness was an astounding 0.85.

3.6.3. History of the organization's financial performance

Two distinct dummy variables were used to examine the impact of money. 1-Tests
based on texts that use texts as their main source of knowledge, representing a text-centred
worldview. Secondly, market-based policies also take into consideration customer input.

3.6.4. This section provides a broad overview of data analysis.

This dissertation's overview section digs into the methods and strategies that might be
applied while undertaking data analysis. Descriptive statistics, such as the mean, the median,
and the mode, were used to determine how normal the data were once they had been obtained
and arranged. After the data had been obtained, this procedure started. After normalcy had been
established, multicollinearity was examined using the information on the various elements of
fluctuating inflation. To gauge the overall level of dependability of the devices, Cronbach alpha

28
values were used. The second round of factor analysis was conducted to establish the
hypotheses' validity and revalidate the instruments' internal consistency and reliability.

The system of high-performance work practices directly impacted the variables being
examined for dependency, and it was demonstrated using multiple regression analysis. A
company's human resources department (HR) results are crucial to the business's success as a
whole. Between 1981 and 1984, Judd and Kenny investigated the relationship between working
practices and dependent variables using a four-step technique (1986). In order to determine
how the resource-based approach affected the link between the high-performance work
practices system and the HR outcomes, a hierarchical regression analysis was ultimately
conducted.

3.7. Data Analysis

Regression analysis begins with the supposition of normality. If this premise is broken
and not followed, incorrect inferences are reached. In my opinion, statistical analysis frequently
ignores this aspect. To ascertain the kurtosis and skewness of the data, it is not required to
venture outside of Table. The kurtosis value must be at least in the range of -2 to +2 before
performing any tests that presume normalcy. The data does notn properly fit the normal
distribution criteria if it is outside of this range. The limitations of minus two and two are
simply guidelines. The ideal limitation level is a topic of debate among statisticians, with views
varying (SPSS Handbook, 2010). 2010 SPSS Handbook. When the amount of skewness
exceeds twice the standard error, detecting a break in symmetry is feasible. This is a guiding
principle. According to Table 3.2, every kurtosis value is noticeably smaller than -2. The
negative values range from 0.018 to 0.739. The skewness value is less than or equal to if and
only if is less than or equal to.

29
 Std.
N Min Max Mean Skewness Kurtosis
Deviation
Std Std Std Std Std Std Std. Std Std. Error
Error
ES 1704 1.00 7.00 4.5626 1.25690 -.119 .059 -.612 .119
SIR 1704 1.00 7.00 4.4120 1.22413 -.257 .059 -.338 .119
HW 1704 1.00 7.00 4.3011 1.18526 -.146 .059 -.482 .119
MHRP 1704 1.00 7.00 4.2862 1.29734 -.484 .059 -.190 .119
Attitude 1702 1.83 7.00 4.7891 .84538 -.150 .059 -.220 .119
Behavior 1703 1.00 7.00 3.7289 1.43587 .034 .059 -.855 .119
PERFOR 1702 1.30 7.00 4.7061 1.02099 -.235 .059 -.417 .119

Table 2 : Uniform distribution of the standard error of the data

3.8. Summary of the Chapter

This chapter included data collection, demographic analysis, and evaluation of all
independent and dependent variables. The multicollinearity and normalcy of the data were
examined, as well as the methods for evaluating the data as a whole. The data were determined
to be distributed appropriately, and there were no problems with multicollinearity. The next
chapter will include a report on the conclusions drawn from the data analysis.

30
 CHAPTER NO. 04
RESULTS AND ANALYSIS
Investigating the relationships between high-performance work practices systems, HR
outcomes, organizational performance, and productivity is the main goal of this section. To
boost corporate performance and productivity, the researcher wants to look at how HR results
and a resource-based perspective act as mediators and moderators. The purpose of this is to
improve corporate performance and productivity. In the first half of this section, Cronbach's
alpha and factor analysis are used to explain the respondents, how they are, and what the results
say about the validity and reliability of the instruments utilized. The third portion of the
conceptual paradigm explores how the variables engage in reciprocal interaction. In contrast,
the second section concentrates on the direct links that exist between the variables.
Respondent Personalities
Biographical details on the sample respondents are given to guarantee that it is
representative of the entire population. The format for presenting the respondents' demographic
data is set forth in a table. The following details on the respondents' pasts were taken into
account:
A total of 3000 questionnaires were issued, with 1000 going to each of the three regions
(north, centre, and South), as stated in Chapter 3. (north, center and South). The researcher
gathered 642 replies to their study since they had access to most northern banks. Due to the
South's distance and potentially controversial political atmosphere, only 486 replies were
received.

Area
Frequency Percent
North 642 37.7
Center 576 33.8
South 486 28.5
Total 1704 100.0

Table 3: Sample by region

Males made up the bulk of individuals who participated in the activity. Male
respondents provided the vast majority of replies (704 total). 1,704 100.0 meters are to the
north, 642 37.7 meters are in the center, 576 33.8 meters are to the South, and 48.5 meters are
between them. Total: 642 37.7 m to the South, 48.5 m in the middle, and 576 33.8 m to the
north. The sample comprised 34.3 percent women and 67.7 percent males overall. Table 4.2

31
provides a true representation of the facts. Examples of gender, age, service time, education
level, and compensation may be found in Table 4.2 and include the following:
Gender Frequency Percent
Male 1119 65.7
Female 585 34.3
Age (years)
25-30 390 22.9
30.1-35 788 46.2
35.1-40 338 19.8
40.1> 188 11.0
Education
14 years (BA / BSc) 181 10.6
16 years (BBA / MA) 221 13.0
17 years (MBA) 1068 62.7
19 years (MS / MPhil / 234 13.7
PhD)
Pay (thousands Rs)
<40 525 30.8
40.1-50 552 32.4
50.1-80 377 22.1
80.1-200 250 14.7

Table 4: It shows how the respondents were divided into four groups based on their ages.

Adults between 30 and 35 make up most of those who replied. This is the same as
46.2% of the entire sample. The sample had more than 40% of people above 40, equal to the
required minimum number of replies. 22.9 percent of the sample consists of individuals who
consume foods prepared recently and recently consumed. People in this category are between
the ages of 25 and 30. 188 individuals, or 19.8% of the sample population, are between the
ages of 35 and 40. The situation as it is is accurately depicted in the table. They were questioned
how long they had worked for the bank where they are presently working. Four different kinds
of occupations accessible today, as shown in Table. 162 respondents to the survey, or 9.5
percent of the total, admitted that they had only recently started working at the bank. 369
workers in the sample, or 21.7% of the total, had been employed by the bank for more than
seven years. Nearly 35% of all replies, or the majority, were from those who had held their
posts for three to seven years or less. The nearest year to the current year was used to round the
values for each month.
The respondents were asked to disclose the whole years they had spent in school.
According to the institution's hiring criteria, potential workers must have completed at least 14
years of education before starting work at the bank. Table 4's data demonstrates how the

32
respondents' school years compare regarding their education degree. Sixty-two percent of
individuals who took the poll and gave comments are master's degree holders (62,7 percent).
In this sample, 13.7 percent of persons with doctorates, master's degrees, and master of
philosophy degrees, compared to 13 percent with BBA and MA degrees. 10% of individuals
questioned had finished more than 14 years of education at the time the question was made.
According on how much money each respondent brought in, as stated in Table 4.2, they
were divided into one of four categories. Most respondents said that their monthly income was
in the range of 40,000 and 50,000 rupees. 14.7 per cent of the survey's sample population said
their monthly income exceeded 80,000,000 rupees. The ratio represents 32.4 per cent of the
entire sample. The phrase "reliability coefficient" has a pleasant sound to it. The researcher
employed research techniques that were created and tested using information acquired from
sources outside Pakistan. Therefore, the researcher used Cronbach's alpha to gauge how
reliable the equipment was. Cronbach's alpha statistic is not by itself a statistical test. Numerous
techniques may be used to assess a single one-dimensional latent construct, including the ones
listed below:
Anything or an unknown unidentified Any number between 0 and 1 might represent
the value. Values that are closer to 1 than other numbers are often those that are less prone to
change. This implies that all parts and objects are the same sizes. Table 4.3 provides the alpha
values for the research's most crucial variables. The main elements taken into account are
shown in Table conducting a study to determine a statistical model's reliability.
The study found that an Alpha score of 0.9 or above indicates an extraordinary level of
competence. A score of 8 or 9 indicates that your performance was exceptional. As long as the
value is between 0.70 and 0.80 and not higher than 0.90, it doesn't matter where the number
falls. The odds of the outcomes being off by 0.6 to 0.7 are present. Although it becomes worse
as the number increases, it is already really terrible at 0.6 and gets worse from there. The alpha
value changes as a result of the item count of the scale. When you are in the alpha state,
consistency is at a high level, but as soon as you leave that state, consistency dramatically
declines.
It must do a factor analysis to determine the item loadings for the various scale
dimensions (George and Mallery, 2018). Check to see if the scale has only one size option
available as the number of dimensions rises, Cronbach's alpha values for the data decrease in
this situation. Because several of the alpha values shown in Tables are beyond the acceptable
range, factor analysis was performed. It was shown that component analysis is the most popular
method for determining if an idea is true or untrue. Factor analysis was utilized to confirm the
33
internal consistency and structure of the instruments employed. The component analysis is a
two-step process that consists of exploratory factor analysis and confirmatory factor analysis
(O'Learry-Kelly and Vorkuka, 1998; Kerlinger and Lee, 2020). O'Leary-Kelly and Vorkuka
created this approach between 1998 and 2000, respectively. When measurements have been
made on numerous variables but the magnitudes and kinds of the underlying factors are still
unknown, Kerlinger and Lee (2020) claim that experimenting with exploratory factor analysis
may be used to find the underlying structure of data or concepts. When this is the case,
exploratory factor analysis can be utilized experimentally. To find collections of distinctive
variables to be categorized as factors, you might look at how the scale's sections interact with
one another. It is easier to deal with things like these composite entities rather than many
different objects.
The researchers employed a technique known as a major factor analysis since there
were so many distinct variables to consider. The main axis approach is used in primary factor
analysis to isolate differences between linear combinations of variables. It does so in-depth and
covers a wide range of topics, including both common and unique ones. Eigenvalues larger
than one were used after the elements were eliminated from the equation. This figure provides
an example of how the numerous factors and elements are interconnected. The researcher might
choose from various possibilities regarding changing the participants.
Sensitivity to and consideration of the different architectural aspects the straight
noblemen rotation method was used in this experiment to extract several components. It is
envisaged that this rotating mechanism would enable communication between the HPWP and
other components. Non-orthogonal solutions commonly show up in previous research.
System Elements Responsible for High-Performance Workplace Procedures
The Eigenvalue of the component structure analysis of the high-performance work
practices scale is more than 1, as shown in Tables (a) and (f). Table 4.4 does not show any
coefficients with values less than or equal to 0.30 because these coefficients have been hidden
(a).
Twelve additional practices were included. However, they had no impact on Table 4.4. Cross-
loading led to increased workload, which led to the corporation ending internal promotions.
Empowerment and participation were kept separate since it was chosen to treat them as two
separate programs. 46 of the 48 items were successfully loaded throughout the loading process.
Absenteeism and job design both saw a one-decrease.
After the considerations were considered, the Cronbach alpha for each item in Table 4.5. All
of the item's alpha values fall inside its legal range. Cross-loading prevented any internal
34
promotions from occurring. Absenteeism, as well as job design, decreased by 1%. It also
exposes the commitment, motivation, general job satisfaction, and future intentions to resign
among employees. The alpha values for attitudes and actions as determined by factor analysis
are shown in Table 4.5.

NEW Variables Cronbach's No of

Alpha Items
Employment security .715 4
Selectivity in recruitment .704 4
High wages .720 4
Incentive pay based on performance .795 3
appraisal
Job satisfaction .768 3
Turn over intentions .771 4
Absenteeism .749 2
Attitude .756 12
Behavior .768 6
Performance .792 10

Table 5: After the criteria were added, Alpha Cronbach's

4.1. Descriptive Statistics

The data is summarized using summary statistics, including standard deviations and
mean values. The study's use of Likert scale questions demands an explanation of how to
interpret the findings. The standard deviation serves as a gauge for how much an object deviates
from the mean. Most observations are close to the mean when the standard deviation is low. In
cases where the standard deviation is high, responses are erratic. We can establish the range of
replies offered by our respondents by comparing the lowest and highest responses. There is
less likely that the values of the input variables in Table 4.6 will overlap because of their tight
connections. It has been demonstrated that most high-performance work practices have weak
relationships with the financial performance indicators ROE, ROA, TQ, and MBVEP.

The specifics of how high-performance work approaches affect output and quality
directly are covered in Section 4.4. Multiple regression analysis investigated the relationship
between independent or predictor factors and a dependent or criterion variable (Pearson, 1908).
These connections were found using linear regression and ordinary least squares:

▪ Employees' behaviour is a reflection of their emotions and ideas (13 HPWPS)

▪ Worker Conduct Is Consistent with Job Purpose (13 HPWPS)

35
 ▪ Return on Investment is what it stands for (13 HPWPS)
▪ Return on Assets (ROA) is a performance indicator (13 HPWPS)
▪ The term "Market-to-Book Economic Profit Value" is abbreviated as "MBVEP" (13
HPWPS)
▪ Tobin Q can be of two different types: (13 HPWPS)
▪ The output of the function is its result (13 HPWPS)
▪ The function of an organization is equal to its perceived performance (13 HPWPS)
The following regression equations may be used to show employee attitude (attitude),
employee behaviour, return on assets (ROA), return on equity (ROE), market to book value of
economic profit (MBVEP), Tobin Q (TQ), employee productivity, and subjective
organizational performance: Those that came in thirteenth More points are awarded for having
an optimistic outlook.

The following formula is used to determine the return on Investment:

• ROA is + + + (13 HPWPS)

• MBVEP is comparable to (13 HPWPS) - - - -

• TQ is (13 HPWPS) More is better in this case.

In Model , the return on equity was contrasted with 13 high-performance work practices
(ROE). Out of the twelve high-performance work practices, only EMPWR (empowerment
high-performance work practice) stood out. According to R2 =.043, the model explains 4.3%
of the variation. Model employs 13 high-performance work practices to calculate the return on
assets (ROA). Empowerment, knowledge sharing, employer security, and employee ownership
(EMPWR) were the five high-performance work practices that stood out (SMT). The other
eight, though, did not. The model explains 0.33 per cent of the total variance, according to its
R2 value of.033.

To get the market back to its book value of profit, Model 5 adopted thirteen high-
performance work practices (MBVEP). The most effective work practices have been shown to
include employee ownership, employment security, and information sharing (IS). Additionally,
success was determined to be training and skill development (TSD). The eight remaining
techniques hardly merited a mention. An R2 of.036 indicates that the model explains 3.6 per
cent of the total variance. Another Model stopped Tobin Q's advancement using 13 high-
performance techniques (TQ). Policies including employment security, employee ownership,

36
and performance-based incentive remuneration are prioritized in high-performance work
settings (IPBPA). The significance of the other nine was negligible. The R2 value is—021,
indicating that the model explains 02.1% of the variance.

Model used 13 high-performance work approaches to reduce productivity

(Productivity). Three of the most successful high-performance work strategies are employment
security, self-managed teams, and human resource procedures (MHRP) monitoring. The
remaining nine practices left us with no lasting impressions. The model's R2 value of.034
indicates that it explains 3.4% of the total variance.

Mean Std. D 1 2 3 4 5
1 ES 4.56 1.26 1
0
2 SIR 4.41 1.22 .09 1
3**
3 HW 4.30 1.18 .12 .26 1
5 6** 3**
4 IPBPA 4.53 1.28 .0 .31 .17 1
5 60 0** 3**
*

5 EO 4.05 1.45 .16 .06 .15 .04 1

6 3** 7** 4** 2
6 IS 4.47 1.18 .10 .33 .24 .42 .067**
8 2** 3** 8** 4**
7 PARTI 4.56 1.21 .14 .24 .33 .24 .195**
6 4** 5** 4** 7**
8 EMPWR 4.49 1.28 .16 .27 .21 .24 .098**
5 6** 8** 9** 0**
9 SMT 4.70 1.21 .21 .30 .27 .27 .097**
5 7** 1** 5** 3**
10 TSD 4.43 1.19 .12 .26 .33 .27 .212**
1 6** 2** 0** 8**
11 RSDB 5.44 .853 .13 .10 .08 .15 -.020
0** 9** 1** 0**
12 JD 4.70 1.30 .06 .21 .25 .26 .073**
8 3** 3** 2** 8**
13 MHRP 4.29 1.29 .11 .23 .27 .18 .231**
7 6** 5** 8** 0**

RBV and HPWPS may impact HR outcomes, such as attitudes and behaviours, and a
fourth set of hypotheses investigates this connection. The study's goal was to show that, in
situations when time is scarce, exceptional, and infrequent, high-performance work practices
may be a source of competitive advantage through a positive attitude and conduct, enhancing

37
organizational performance. And. Only a company with such a great internal asset can
dominate the market (Barney, 1991). We looked at the historical development of the topic of
this paragraph. In addition to the 13 practices, the questionnaire included three additional
questions concerning the RBV for senior and intermediate bank managers. In issue one,
opinions about the timeliness of the established method were solicited from senior and middle-
level bank officials. Second, the uniqueness of the novel technique was rated by researchers of
all ages. Middle management senior bankers This essay looked at the employment of this
strategy by a rival. The third question inquired how senior and middle-level bank managers felt
about the novel strategy.

Graphics were made to demonstrate how RBV affects the link between high-
performance work practices, attitude, and behaviour, and Table provides several significant
interaction terms. Photos two through seventeen. The relationship between RBV and attitude
and recruitment selectivity was first identified (SIR). The information that the Excel macro
used to produce Figure 4 is found in Table 4.13. As indicated in Table 4.13, there is a significant
relationship between SIR, the moderator, RBV, and the research variable, attitude. This term
strengthened the relationship in question (SIR x RBV). According to the findings, SIR and
RBV have a favourable correlation (=.029) with attitude. RBV, therefore, modifies SIR and
attitude.

Unstandardized Regression β
Coefficients:
Independent variable: SIR -0.08*
Moderator: RBV -0.154***
Interaction: SIR x RBV 0.029***

Intercept / Constant: .246

Means / SDs of variables:

Mean of independent variable: SIR 4.4120
SD of independent variable: SIR 1.22413
Mean of moderator: RBV 4.226
SD of moderator: RBV 1.343

Table 6: The normalized RBV regression coefficients between SIR and Attitude.

There are two further explanations in Figure 4. The small slope of the continuous line
and the low RBV in this group suggest that SIR and attitude are not connected. This second
line has a higher slope than the high RBV line. There is a favourable relationship between

38
attitude and SIR. Unlike those who did not think the peculiarity, urgent nature, and scarcity of
the methods they employed affected their opinions of their recruitment efforts. A macro in
Excel was used to construct Figure 5 using data from Table 4.14. Figure 5 demonstrates how
the interaction between IS and RBV affects attitude. As shown in Table 4.14, there is a strong
association between IS and the dependent variable, attitudes, and the moderator. This term
strengthened the relationship in question (IS x RBV). In this study, a negative correlation (r =
-0.041***) was found between the attitudes of the participants and the way that IS and RBV
interacted. It seems that when IS and RBV are low, people are more likely to be pessimistic. A
low RBV boosts hopes when IS is strong, whereas a large RBV decreases hopes. Never
previously has this occurred.

Table 7:The unstandardized regression coefficients for the RBV between IS and Attitude

Unstandardized Regression β
Coefficients:
Independent variable: IS 0.276*
**
Moderator: RBV 0.155*
**
Interaction: IS x RBV -
0.041*
**

Intercept / Constant: .246

Means / SDs of variables:

Mean of independent variable: IS 4.4722
SD of independent variable: IS 1.1880
3
Mean of moderator: RBV 4.392
SD of moderator: RBV 1.293

39
 Figure 1: It shows how RBV modifies how IS and attitude affect RBV.

Two lines in Figure 5 help to explain things. The steady line's low RBV and mild slope
indicate that IS and attitude are interwoven in this particular subgroup. Those who thought their
information-sharing practices were limited in time and scope, unique in character, and
unmatched when compared to the moderate slope of the high RBV dotted line had a substantial
impact on respondents' opinions. More significantly, individuals who did not think these
activities were special and time-limited had a positive and significant impact.

40
 Figure 2: It illustrates how SMT and RBV

It has a favorable effect on team members' attitudes. A script in Excel was used to
generate Figure 6 using data from Table 4.15. In Table 4.15, the moderator RBV and the
dependent variable, attitude, had a significant relationship with SMT. This term strengthened
the relationship in question (SMT x RBV). The study's findings show that attitude negatively
correlates with how SMT and RBV interact (= -0.031***). When both RBV and SMT are low,
people are more likely to be pessimistic. When RBV is low, and SMT is high, people are more
optimistic than when RBV is high. Never previously has this occurred.

Check out the two lines in Figure 6 that help to explain things. SMT and attitude in this
group have a strong association, as seen in Figure 6. The respondents' perception that self-
managed team processes were time-limited, distinct, and unmatched had minimal influence on
their opinions compared to the high RBV line, which has a low slope and shows that there is
no association between SMT and attitude. People's ideas on life started to change as soon as
they understood that these activities were not limited in time, rare, or ideal. An Excel script
was created in Figure 7 using information from Table 4.16. Figure 7 shows how reduced status
disparities and barriers (RSDB) and RBV influence people's attitudes in general. As can be
seen in Table 4.16, there is a strong association between attitude and RSDB, but not with the
moderator. As a result of this statement, this connection was greatly strengthened (RSDB x
RBV). This study discovered that the interaction between RSDB and RBV had a detrimental
effect on attitude (=-0.032*). The word "interaction" has the opposite effect of what may be
expected.

41
4.2. Descriptive statistics
Std.
Mean Deviati 1 2 3 4 5 6
on
1 ROE .041978 .3254221 1
2 ROA .006588 .0207683 .832** 1
3 MBVEP 1.359 .6732319 -.083** .163** 1
4 TQ 254.233 153.7773 .162** .270** .437** 1
5 Product 8.2377 .36359 .225** .486** .188** .118** 1

Table 8: It has more specific details. Not a part of the HPWPS

According to regression analysis, HPWPS significantly influences an organization's

subjective and financial performance and its staff's productivity, attitude, and behaviour. The
H1(a) and H1 hypotheses will be tested using this technique (f). It was crucial to show how the
various components are interdependent repeatedly. Dr Jeremy Dawson created an Excel script
to show the basics of slope analysis (Dawson, 2011). The program generates a graph using the
independent and moderator variable coefficients, the interaction term, and the constant as input.
The graph is shown below. Table 4.31 displays all of the data. Two lines, one above and one
below the mean, standard deviation, may be seen in this graph. Table summarises how RBV
affects HPWPS's relationship with employees' attitudes and actions. By employing hierarchical
regression analysis, moderating variables were identified, and hypotheses were assessed.

This circumstance is a result of RBV. The first portion of Table 4.31 presents the results
of the hierarchical regression analysis for the connection between HPWPS, RBV, attitude, and
conduct. Model 1 considered the Summited Index of 13 High-Performance Work Practices and
employee attitudes (HPWPS). With Model 2, hierarchical regression is carried out. The
updated R2 will be higher if you utilize the company's resource base perspective (RBV) to
regress HPWPS against an apex index of the idea of time boundness, scarcity, and imitability.
In Model 3, it is crucial to consider the HPWPS and RBV interaction term. Option 4(a) is
deemed acceptable as a consequence. This study shows that the resource-based strategy in
H4(a) affects HPWPS and HR outcomes like attitude. Similarly, the second part of the table
provides elements related to employee conduct.

There were thirteen high-performance practices in the Model 1 HPWPS index. The
objective of HPWPS in Model 2 was to reverse the RBV principles of being limited in time,
rare, and easy to copy. In Model 3's regression, the HPWPS x RBV interaction term was

42
applied. Each phase saw a rise in the R2 value and the importance of the interaction term. Thus,
the claim made in subparagraph 4(b) is untrue. The resource-based approach alters the
relationship between HPWPS and HR outcomes or behaviour.

The HPWPS and RBV significantly affect employee attitudes, as seen in Figure 14.
Table 4.32 shows that HPWPS has a significant impact on the moderator RBV and the
dependent variable, attitude. This term strengthened the relationship in question (HPWPS x
RBV). According to study results, HPWPS and RBV (= 0.0609**) have a detrimental effect
on attitude.

Figure 3: It shows how RBV can alter HPWPS and attitude.

Figure uses two lines to depict the idea. HPWPS and attitude are substantially
connected in this category, as seen by the positive slope and low RBV. Despite having a less
positive slope than the line with a high RBV, there is an association between HPWPS and
attitude. Because the participants thought the behaviours they had learned in high-performance
work practices systems were ephemeral, singular, and unmatched, this view was minimally
altered. Their conduct was significantly affected by those who did not think the high-
performance work practices system was temporary, special, or easy to duplicate. On the other
hand, RBV somewhat reduces the link between attitude and HPWPS.

Utilizing information from a clear relationship between the behavioural effects of the
RBV and HPWPS systems. Behaviour, the dependent variable, and the moderator RBV had a
close relationship with the HPWPS. Finally, the researchers discovered a relationship between
behaviour and the RBV and RSDB combination (= 0.148*). This term strengthened the
relationship in question (RSDB x RBV).

43
 Unstandardized Regression β
Coefficients:
Independent variable: HPWPS -1.257***
Moderator: RBV 0.150**
Interaction: HPWPS x RBV 0.148*

Intercept / Constant: 5.785***

SD of moderator: RBV .71657

Table 9: Regression coefficients for the HPWPS modulation

While one line is straight, the other has a downward slope. This shows that there is no
connection between the behaviour of this particular subgroup and HPWPS. The dashed line
shows the minimal association between behaviour and HPWPS using a high RBV. Most people
surveyed said that the high-performance work practices system's activities had a negative and
minimal influence on their behaviour. Because they were ignorant of the rarity and
distinctiveness of these adopted HPWPS, some persons responded poorly and mildly. When
people believed in RBV, they became kinder in general.

4.3. Summary of the Chapter

The researcher in this chapter used several data analysis techniques to find statistical
relationships. The next chapter presents the findings, restrictions, and recommendations from
the preceding chapter.

44
 CHAPTER NO. 05
CONCLUSION

5.1. Final Analysis, Suggestions, and Limitations

The last chapter presents the study's most important findings and contrasts them with
previous research. The ramifications of the results, the contributions of the research, and its
shortcomings have all been discussed. The main goal of this inquiry has been accomplished.
According to data, middle and upper-level managers must first put human resource
management practices in Pakistan's banking sector. This study aimed to ascertain whether RBV
may provide Pakistan's fiercely competitive banking sector with an advantage and how high-
performance work habits affect productivity. This experiment was designed to show how
developing high-performance work habits may increase staff morale and productivity. If these
techniques are updated and put into practice in line with the organization's resource-based
philosophy, organizational performance and motivation may greatly increase.

The State Bank of Pakistan states that only these banks have a chance against the fierce
competition in the industry. At some point, these institutions will create high-performance
work systems that are unique. These institutions will use their intangible assets to gain a
competitive edge. It is necessary to design a system based on the usual behaviours in these
institutions. Investigations are being done into factors such as job stability, high pay,
performance-based incentives, information exchange, skill development, job design, and the
assessment of human resource management systems. Banks must prioritize the
abovementioned procedures and ensure that their employees follow them if they want to keep
their competitive edge. Due to their difficulty in imitation, these high-performance work
practices and technology give a company a competitive edge.

The banking industry consistently views measuring HR processes—which include 13

high-performance work practices—as the most important factor. Research shows that this
strategy significantly affects both the effectiveness with which a company completes its task
and the attitudes and behaviours of its employees. To run a firm, you must monitor how your
HR policies are followed (SHRM survey, 2006). Managers may use this approach to evaluate
the efficiency of their human resources division and how it contributes to the business's overall
health. It also makes it simpler for managers to respond correctly and defend their decisions
from a financial standpoint. Consequently, data and statistics must be used to support HRM

45
practices (DTT-EIT survey, 2007). Further study is needed in this area of HR accounting and
auditing.

According to our study, some high-performance work practices harm employee

productivity, financial success, and employee attitudes and behaviours about the firm's
performance. According to the report, businesses may be able to boost productivity by adopting
seven easy-to-implement high-performance work habits. Better management of scarce
resources These high-performance work methods help employers because they help them hire
the people they need to stay competitive (Barney, 1991).

Additionally, several studies have shown that self-managed teams and employment
security are the best ways to achieve high performance. These tactics not only boost
productivity and employee morale but also significantly affect how they see the overall
performance of their business. Using HPW strategies, people may be made into valuable assets
for a business. The best practices we chose have a considerable influence on the performance
of businesses, in line with the SHRM idea (Delery and Dotty, 1996). By implementing these
high-performance work methods, managers may assist their workers in acquiring special skills
and qualities that are hard for others to duplicate (Lado and Wilson, 1994).

5.2. Limitations, and future potential

High-performance practices have a significant impact on organizational success.
However, this study has certain shortcomings. Employee attitudes and behaviours are intricate
and need more research. Future scholars will have to do this while examining the causes of
these traits. Additional RBV characteristics have been identified in the literature, including
non-substitutability, strategic variables, and strategic assets. These might be useful in the
future.

Even though the results of this study are congruent with its theoretical framework, a
longitudinal design is required to analyze the relationships between the variables in more depth
(Bollen, 1989). Instead of using longitudinal data, which would have allowed it to demonstrate
cause and effect, this study relied on cross-sectional data. Our investigation was unable to
establish a causal connection as a consequence. In order to establish causation in future studies,
this must be considered. Fourth, some self-report assessments in several categories are used in
the study. Due to method bias, the reported connections may look greater than they are
(Podsakoff and Organ, 1986). The questionnaire's inclusion of both positive and negative

46
language helped to some extent to decrease this inflation. However, future research will need
information from other sources to effectively address this problem.

Thirdly, there was a low response rate, which may have impacted the findings and how
they were interpreted because respondents were reluctant to provide information about their
jobs or organizations. In the future, researchers will need to recruit more people to participate
in their surveys. Organizations throughout the globe do not pay much attention to or care about
this kind of poll, in contrast to Pakistan. Sixth, only senior and middle management Pakistani
bank executives were considered. The study's scope and sample size may have been expanded
if people from all levels of the banking industry had been included. Future researchers will
have to cope with this problem.

47
 REFERENCES

Shuhong Wang, Xiang Yi, John Lawler & Mingrui Zhang (2011) Efficacy of high-performance
work practices in Chinese companies, The International Journal of Human Resource
Management, 22:11, 2419-2441, DOI: 10.1080/09585192.2011.584406.

Spreitzer, G.M., Kizilos, M.A., and Nason, S.W. (1997), ‘A Dimensional Analysis of the
Relationship between Psychological Empowerment and Effectiveness, Satisfaction, and
Strain,’ Journal of Management, 23, 679–704.

Batt, R. (2002), ‘Managing Customer Services: Human Resource Practices, Quit Rates and
Sales Growth,’ Academy of Management Journal, 45, 587–597.

Roscow, J.M., and Zager, R. (1988), Training: The Competitive Edge, San Francisco, CA:
Jossey-Bass.

Martocchio, J. (1998), Strategic Compensation – A Human Resource Management Approach,

Prentice Hall-Gale.

Schuler, R.S., and MacMillan, I.C. (1986), ‘Gaining Competitive Advantage through Human
Resource Management Practices,’ Human Resource Management, 3, 241–255.

Scott, W.R., and Meyer, J.W. (1991), ‘The Rise of Training Programs in Firms and Agencies:
An Institutional Perspective,’ Research in Organizational Behavior, 13, 297–326.

Griffin, M.A., Patterson, M.G., and West, M.A. (2001), ‘Job Satisfaction and Teamwork: The
Role of Supervisor Support,’ Journal of Organizational Behavior, 22, 537–550.

Harley, B., Sargent, L., & Allen, B. (2010). Employee responses to ‘high performance work
system’practices: an empirical test of the disciplined worker thesis. Work, Employment and
Society, 24(4), 740-760.

Awan, S. H., Habib, N., Shoaib Akhtar, C., & Naveed, S. (2020). Effectiveness of performance
management system for employee performance through engagement. SAGE Open, 10(4),
2158244020969383.

Brown, T. C., O’Kane, P., Mazumdar, B., & McCracken, M. (2019). Performance
management: A scoping review of the literature and an agenda for future research. Human
Resource Development Review, 18(1), 47-82.

48
Maake, G., Harmse, C. P., & Schultz, C. M. (2021). Performance management as a mediator
for work engagement and employment relationships in the public sector in South Africa. SA
Journal of Human Resource Management, 19, 12.

Maung, K. M (2020). THE EFFECTS OF High-Performance WORK SYSTEMS ON

EMPLOYEE JOB SATISFACTION AND PERFORAMANCE (CASE OF BANKING
INDUSTRY IN MYANMAR). South East Asia Journal of Contemporary Business, Economics
and Law, Vol. 21.

Boselie, P. and Dietz, G. (2003). Commonalities and contradictions in research on human

resource management and performance. Paper presented at the Academy of Management
Meetings in Seattle, August, 2003.

Sels, L., De Winne, S., Maes, J., Delmotte, J., Faems, D., & Forrier, A. (2006). Unravelling the
HRM performance link: Valuecreating and cost-increasing effects of small business HRM.
Journal of Management Studies, 43, 319–42.

Hussain, R. M. (2011). An empirical study of the relationship between motivation to transfer

and transfer of training. Far East Journal of Psychology and Business, 5, 47-56.

Mondy, R. W., & Martocchio, J. J. (2016). Human Resource Management, 14th ed., Pearson
Education Ltd., Harlow, England. Mwita, J. I. (2000). Performance management model: A
system-based approach to system quality. The International Journal of Public Sector
Management, 13, 19-37.

Combs, J., Liu, Y., Hall, A., & Ketchen, D. (2006). How much do high‐performance work
practices matter? A meta‐analysis of their effects on organizational performance. Personnel
psychology, 59(3), 501-528.

Delery JE, Shaw JD. (2001). The strategic management of people in work organizations:
Review, synthesis, and extension. In Ferris GR (Ed.), Research in personnel and human
resources management (Vol. 20, pp. 165–197). Stamford, CT: JAI Press.

Evans WR, Davis WD. (2005). High-performance work systems and organizational
performance: The mediating role of internal social structure. Journal of Management, 31, 758–
775.

49
Sudiardhita, K. I., Mukhtar, S., Hartono, B., Sariwulan, T., & Nikensari, S. I. (2018). The effect
of compensation, motivation of employee and work satisfaction to employee performance Pt.
Bank Xyz (Persero) Tbk. Academy of Strategic Management Journal, 17(4), 1-14.

MICHAEL, B., PRINCE, A. F., & CHACKO, A. (2016). IMPACT OF COMPENSATION

PACKAGE ON EMPLOYEE RETENTION. CLEAR International Journal of Research in
Commerce & Management, 7(10).

Huselid, M. A., & Becker, B. E. (1995, August). The strategic impact of high-performance
work systems. In Academy of management annual meeting, Vancouver.

Becker, B. E., Huselid, M. A., Becker, B. E., & Huselid, M. A. (1998). High performance work
systems and firm performance: A synthesis of research and managerial implications.
In Research in personnel and human resource management.

Huselid, M. A., & Becker, B. E. (1997, August). THE IMPACT HIGH PERFORMANCE
WORK SYSTEMS, IMPLEMENTATION EFFECTIVENESS, AND ALIGNMENT WITH
STRATEGY ON SHAREHOLDER WEALTH. In Academy of Management
Proceedings (Vol. 1997, No. 1, pp. 144-148). Briarcliff Manor, NY 10510: Academy of
Management.

Kehoe, R. R., & Wright, P. M. (2013). The impact of high-performance human resource
practices on employees’ attitudes and behaviors. Journal of management, 39(2), 366-391.

Cohen, P. R., & Levesque, H. J. (1991). Teamwork. Nous, 25(4), 487-512.

Battistelli, A., Odoardi, C., Vandenberghe, C., Di Napoli, G., & Piccione, L. (2019).
Information sharing and innovative work behavior: The role of work‐based learning,
challenging tasks, and organizational commitment. Human Resource Development
Quarterly, 30(3), 361-381.

Boxall, P., & Purcell, J. (2011). Strategy and human resource management. Macmillan
International Higher Education.

Boxall, P., & Macky, K. (2009). Research and theory on high‐performance work systems:
progressing the high‐involvement stream. Human resource management journal, 19(1), 3-23.

Wood, S. (1999). Human resource management and performance. International journal of

management reviews, 1(4), 367-413.

50
Boon, C., Den Hartog, D. N., & Lepak, D. P. (2019). A systematic review of human resource
management systems and their measurement. Journal of management, 45(6), 2498-2537.

Amabile, T. M., Conti, R., Coon, H., Lazenby, J., & Herron, M. (1996). Assessing the work
environment for creativity. Academy of management journal, 39(5), 1154-1184.

Jiang, K., Lepak, D. P., Hu, J., & Baer, J. C. (2012). How does human resource management
influence organizational outcomes? A meta-analytic investigation of mediating
mechanisms. Academy of management Journal, 55(6), 1264-1294.

Yu, L., Wang, J., Clinton, N., Xin, Q., Zhong, L., Chen, Y., & Gong, P. (2013). FROM-GC:
30 m global cropland extent derived through multisource data integration. International
Journal of Digital Earth, 6(6), 521-533.

Harris, T. B., Li, N., Boswell, W. R., Zhang, X. A., & Xie, Z. (2014). Getting what's new
from newcomers: Empowering leadership, creativity, and adjustment in the socialization
context. Personnel Psychology, 67(3), 567-604.

Liao, H., Liu, D., & Loi, R. (2010). Looking at both sides of the social exchange coin: A
social cognitive perspective on the joint effects of relationship quality and differentiation on
creativity. Academy of Management Journal, 53(5), 1090-1109.

Zhou, J., & George, J. M. (2001). When job dissatisfaction leads to creativity: Encouraging
the expression of voice. Academy of Management journal, 44(4), 682-696.

Gong, Y., Huang, J. C., & Farh, J. L. (2009). Employee learning orientation, transformational
leadership, and employee creativity: The mediating role of employee creative self-
efficacy. Academy of management Journal, 52(4), 765-778.

Amabile, T. M. (1983). The social psychology of creativity: A componential

conceptualization. Journal of personality and social psychology, 45(2), 357.

Chang, S., Jia, L., Takeuchi, R., & Cai, Y. (2014). Do high-commitment work systems affect
creativity? A multilevel combinational approach to employee creativity. Journal of Applied
Psychology, 99(4), 665.

Han, T. S., Chiang, H. H., McConville, D., & Chiang, C. L. (2015). A longitudinal
investigation of person–organization fit, person–job fit, and contextual performance: The
mediating role of psychological ownership. Human Performance, 28(5), 425-439.

51
Pfeffer, J. (1998). Seven practices of successful organizations. Org Dev & Trng, 6E
(Iae), 460.

Edmondson, A. (1999). Psychological safety and learning behavior in work

teams. Administrative science quarterly, 44(2), 350-383.

Hirst, G., Van Knippenberg, D., & Zhou, J. (2009). A cross-level perspective on employee
creativity: Goal orientation, team learning behavior, and individual creativity. Academy of
management journal, 52(2), 280-293.

Bowen, D. E., & Ostroff, C. (2004). Understanding HRM–firm performance linkages: The
role of the “strength” of the HRM system. Academy of management review, 29(2), 203-221.

Eisenberger, R., Huntington, R., Hutchison, S., & Sowa, D. (1986). Perceived organizational
support. Journal of Applied psychology, 71(3), 500.

Paauwe, J., Wright, P., & Guest, D. (2013). HRM and performance: what do we know and
where should we go? In HRM and performance: Achievements and challenges (pp. 1-13).
Wiley.

Allen, D. G., Shore, L. M., & Griffeth, R. W. (2003). The role of perceived organizational
support and supportive human resource practices in the turnover process. Journal of
management, 29(1), 99-118.

Boxall, P. (2012). High‐performance work systems: what, why, how and for whom? Asia
Pacific Journal of Human Resources, 50(2), 169-186.

Womack J, D Jones and D Roos (1990) The machine that changed the world: The triumph of
lean production. Rawson Macmillan, New York.

Ulrich, D. (1997). HR of the future: Conclusions and observations.

Zhu, C., Liu, A., & Chen, G. (2018). High performance work systems and corporate
performance: the influence of entrepreneurial orientation and organizational learning.
Frontiers of Business Research in China, 12(1), 1-22.
Werner, S. (2011). High performance work systems in the global context: A commentary
essay. Journal of Business Research, 64(8), 919-921.

Human Resource Management, Emily P. (2019) Barnes W. F (2001)

Evans, W. R., & Davis, W. D. (2005). High-performance work systems and organizational

52
 performance: The mediating role of internal social structure. Journal of
management, 31(5), 758-775.
Andersén, J., & Andersén, A. (2019). Is high-performance work systems (HPWS)
appreciated?
by everyone? The role of management position and gender on the relationship
between HPWS and affective commitment. Employee Relations: The International
Journal.
Zhang, M., Zhu, C. J., Dowling, P. J., & Bartram, T. (2013). Exploring the effects of high-
performance work systems (HPWS) on the work-related well-being of Chinese
hospital employees. The International Journal of Human Resource
Management, 24(16), 3196-3212.
Reference from. Hazzan &Alkaim et al 2012, Jiang et al 2013 and Chang et al 2014

53