High-performance work systems and organizational performance: testing the mediation role of employee outcomes using evidence from PR China

Abstract

This research investigates the relationship between high-performance work systems (HPWS) and organizational performance, and the mediating effect of employee outcomes. The paper is based on a sample of 168 firms of six ownership types and in various business sectors operating in China. The results of data analysis support the hypotheses. Organizational performance is positively predicted by HPWS and employee outcomes, and employee outcomes positively mediate the relationship between HPWS and organizational performance. This paper supports the theory that HPWS positively impacts organizational performance and explains the mechanisms through which HPWS enhances organizational performance. It also responds to the long-standing call for stressing the importance of employee-related factors in the HRM–performance linkage.