High performance work system, HRD climate and organisational performance: an empirical study

Abstract

Purpose – This paper aims to study the relationship between high-performance work system (HPWS) and organizational performance and to examine the role of human resource development (HRD) Climate in mediating the relationship between HPWS and the organizational performance in the context of the power sector of India. Design/methodology/approach – The empirical research paper has been conceptualized on the basis of extensive literature survey and examined through a case-based approach. Data and information collected to examine strength of the proposed hypothesis in the context of a power-based company in India. Findings – Agreeing with most of the research, HPWS is found to be positively related with organizational performance. The result does not agree with the HPWS research conducted in Asian countries. Taking clues from “Black Box” approach, the role of HRD Climate as a mediating factor has been studied. The result proved that HPWS influences organizational performance through a supportive development environment (HRD climate) based on openness, confrontation, trust, authenticity, proaction, autonomy, collaboration and experimentation (OCTAPAC). Research limitations/implications – Designing and implementing HPWS requires the organization to nurture and develop a suitable HRD climate through development of organizational culture based on OCTAPAC. Practical implications – Implications for HRD–HPWS practices such as group-based pay, decentralized participative decisions, self-managed work teams, social and family events, and appraisal based on team goals along with OCTAPAC culture can significantly contribute to the transfer climate by influencing both peer and supervisor. It can significantly contribute to training motivation by influencing both career and job attitudes, and organizational commitment of trainees. Originality/value – The research is unique in its attempt to understand the role HRD climate as intermediating variables to enhance the effectiveness of HPWS. This may add a lot of value in encouraging organizations to establish HRD Climate.