How important is a high-performance work system to improve branch-level performance?

Abstract

Purpose This study aims to propose and empirically examine the simultaneous complementary mediating role of bank branch collective human capital and justice climate between implemented high-performance work system (HPWS) and bank branch performance in the banking sector. Design/methodology/approach Data were collected at three different intervals of time between March 2022 to July 2022 from a final sample of 323 branch managers and 1,369 employees of commercial banks operating in Pakistan. Partial least square structural equation modeling was used to test the theoretical model proposed by this study. Findings Study results revealed that collective human capital and justice climate simultaneously mediate the relationship between implemented HPWS and branch performance. Research limitations/implications The study contributes to the strategic HRM theory by proposing the complementary mediating roles of human capital and organizational justice to reap the benefits of implementing HPWS for improving branch-level performance. The managers should focus on developing and exploiting the knowledge, skills and experiences (human capital) of branch employees and improve their collective perceptions of justice to reap the benefits of HPWS for enhancing branch-level performance. Originality/value Drawing upon the resource-based view of the firm and organizational justice theory, this novel study examines the simultaneous and complementary mediating effects of collective human capital and justice climate between implemented HPWS and branch performance relationships at the branch-level analysis.