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High-performance work systems
and job performance: the mediating
role of social identity, social
climate and empowerment in
Chinese banks
Timothy Bartram
HPWS in
Chinese banks
Received 13 August 2019
Revised 23 December 2019
9 March 2020
Accepted 29 March 2020
School of Management, RMIT University, Melbourne, Australia
Brian Cooper and Fang Lee Cooke
Department of Management, Monash University, Melbourne, Australia, and
Jue Wang
Southwestern University of Finance and Economics, Chengdu, China
Abstract
Purpose – Despite the utility of social identity and social climate theories in explaining individual and group
behaviour within organizations, little research has been conducted on how these approaches interconnect to
explain the way high-performance work systems (HPWSs) may increase job performance. This study extends
one’s understanding of the human resource management (HRM)–performance relationship by examining the
interconnections between these disparate social approaches within the Chinese banking context.
Design/methodology/approach – Drawing on a sample of 561 employees working across 62 bank branches
in China, the authors test four hypotheses: (1) HPWS is positively related to social climate; (2) social climate
mediates the relationship between HPWS and social identification; (3) psychological empowerment mediates
the relationship between social identification and job performance; and (4) social climate, social identification
and psychological empowerment sequentially mediate the relationship between HPWS and job performance.
Data were collected over two waves and job (in-role) performance was rated by managers.
Findings – The authors confirm the four hypotheses. Social climate, social identification and psychological
empowerment sequentially mediate the relationship between HPWS and job performance.
Research limitations/implications – This study contains some limitations. First, the authors’ research
sites were focussed on one main region in state-owned banks in China. Second, this study examined only one
industry with a relatively homogeneous workforce (i.e. relatively young and highly educated employees).
Practical implications – HPWS may translate into individual performance through a supportive social
climate in which staff identify themselves with their work team. This suggests that organizations should pay
close attention to understanding how their HPWS system can foster a strong social climate to enhance
employee identification at the work group level. Second, as the nature of work is becoming increasingly more
complex and interdependent, enabling not just individuals but also work groups to function effectively, it is
critical for departments and work groups to promote a collective understanding of HRM messages with shared
values and goals.
Originality/value – This research contributes towards a more comprehensive understanding of the HRM–
performance chain as a complex social process underpinned by social identity theory. The authors demonstrate
that social identification and social climate both play an important role in explaining how HPWS positively
affects psychological empowerment and subsequent job performance.
Keywords China, Empowerment, HPWS, Social climate, Social identity theory
Paper type Research paper
Introduction
Despite the sustaining research interest in high-performance work systems (HPWSs) (Chiang
et al., 2015; Kehoe and Wright, 2013), there is still much to be learned about how HPWS uses
social mechanisms to impact individual and organizational performance (see Kaufman, 2015;
Personnel Review
© Emerald Publishing Limited
0048-3486
DOI 10.1108/PR-08-2019-0425
PR
Paauwe et al., 2013). For most people, work is a social experience and employee perceptions of
human resource management (HRM) practices may be influenced by their experiences with,
as well as views of, their co-workers (De Sisto et al., 2019; Kehoe and Wright, 2013), broader
organizational values (Coutu, 2002) and climates (Prieto and Santana, 2012). Management
scholars and practitioners have a strong interest in the effective management of an
increasingly service-dominated workforce to maximize organizational performance (Cooke
et al., 2019; Fu et al., 2019). HPWS is important because it promotes people as a source of
competitive advantage by developing human capital through a “bundle” of HRM practices
that are designed to enhance employees’ knowledge, skills, commitment and performance
(Miao et al., 2020; Xian et al., 2019; Wattoo et al., 2020). Researchers theorize that certain HRM
practices (e.g. extensive training, information sharing, employee self-managed teams, quality
work) are performance enhancing (Bartram et al., 2014; Takeuchi et al., 2009). Several scholars
have proposed that HPWS impacts individual as well as organizational outcomes through
social mechanisms including social climate (Collins and Smith, 2006; Evans and Davis, 2005;
Wright and Haggerty, 2005) and more recently, social identification (e.g. Bartram et al., 2014;
Cornelissen et al., 2007).
Despite the growing research on HPWS as a social phenomenon, Takeuchi et al. (2009)
argue that the social processes through which HRM affects employees’ attitudes and
behaviours and performance remain inadequately understood. More specifically, there is
little research examining how HPWS contributes to individual performance via its effect on
social climate and on the social identification of workers (Badigannavar and Kelly, 2005;
Bartram et al., 2007; Ellemers et al., 2004; Haslam, 2014). This is an important research gap
because HPWS promotes the development of relationships, cooperation and synergy between
work group members as a means of competitive advantage (Wright and Nishii, 2004). With
the growing emphasis of organizations competing via complex service provision (to innovate
and create) that require close collaboration, high levels of trust and communication,
unpacking how HPWS can be used to build synergistic relationships among team or work
group members to increase employee performance is important for both management
scholars and practitioners.
Our paper is underpinned by social identity theory which proposes that people wish to
belong to groups (e.g. a bank branch) to enhance their self-esteem. Social identification is “a
process whereby people develop a sense of themselves as a distinct group” (Badigannavar
and Kelly, 2005, p. 527). Moreover, an important argument of our paper is that the
development of a strong social climate is achieved through HPWS. Prieto and Santana (2012,
p. 193) define social climate as the “mobilization of assets controlled through a ‘network of
relationships’ among organizational members”. Such a social climate is underpinned by trust,
cooperation and shared codes and language (Collins and Smith, 2006). This study proposes
that creating a social climate of trust and cooperation (at the work-group level) will facilitate
greater social identification among workers in which they enhance their effort on behalf of the
work group through psychological empowerment and subsequent job (in-role) performance.
According to Conger and Kanungo (1988), empowerment is a process of enhancing feelings of
self-efficacy amongst organizational participants. Moreover, Spreitzer defined psychological
empowerment as comprised of four cognitions: meaning; competence; autonomy; and impact.
Social identification within the work group through the development of common individual
and group reactions (e.g. common internalization of intended performance goals) is likely to
drive higher levels of psychological empowerment and subsequent job performance (Bartram
et al., 2014; Wright and Nishii, 2004).
To examine these linkages, we test four hypotheses: (1) HPWS is positively related to
social climate; (2) social climate mediates the relationship between HPWS and social
identification; (3) psychological empowerment mediates the relationship between social
identification and job performance; and (4) social climate, social identification and
psychological empowerment sequentially mediate the relationship between HPWS and job
performance.
We selected the Chinese banking industry for the context of our study because it
represents an important sector not just in China but also for the global economy in which
work performance expectations are high due to intensive competition, and the work requires
significant employee interaction and collaboration (Wang et al., 2014; Zhao et al., 2012). The
hypotheses are tested using 561 employee–manager matched observations from 62 branches
from 16 banks in southwest China. Our study is situated at the work group level (i.e. at the
bank branch level) because social identification is more likely to emerge in smaller groups
where the greatest level of interaction occurs (Farmer et al., 2015; Haslam, 2014; Liu
et al., 2014).
Our paper contributes to the HRM literature in three ways. First, we extend extant
research of HPWS and social identification through the inclusion of another social process
– social climate. In doing so, this study seeks to extend and improve upon the
methodological rigour of Bartram et al. (2014) by using a multi-level and multi-source
(consisting of both employee measures and supervisor-rated performance) research
design. Our main contribution to the HRM literature is unpacking the role of the three
mediators (i.e. social climate, social identification and psychological empowerment) on the
relationship between HPWS and job performance. Second, we examine the influence of
HPWS on the relationship between group-level social phenomenon (social climate)
and individual-level social phenomenon (social identification and psychological
empowerment) to explain job performance. By using social identity theory, specifically
the social categorization process to examine social climate and social identification across
two different organizational levels, we gather new and important insights into how these
two different social processes explain the impact of HPWS on job performance. Moreover,
the paper contributes to HRM theory by shedding light on the social processes through
which HRM may affect the attitudes and behaviours of workers (psychological
empowerment) and their subsequent job performance. This is valuable because it gives
both academics and management practitioners a more complete understanding of how
HPWS uses multi-level social processes to facilitate greater social cohesion among work
groups and increase their subsequent performance. Third, our study contributes to the
HRM field by investigating the use of HPWS in the context of the Chinese banking
industry, a vital financial sector with global implications (e.g. Zhao et al., 2012; Cooke et al.,
2019) which remains under-researched. These research gaps are important to fill given the
growing interdependent and complex nature of service work that requires significant
social interaction and synergy between workers to provide high-quality services.
Literature review and hypotheses development
HPWS and social climate
Research has shown that the operation of the HRM–performance chain is interconnected
through complex relationships across individual, group and organizational levels (Collins
and Smith, 2006; Ma et al., 2017; Zhang et al., 2018). Researchers theorize that certain HRM
practices (e.g. extensive training, information sharing, employee self-managed teams and
quality work) are performance enhancing (Wattoo et al., 2020). These practices affect
employee attitudes and behaviours and consequently impact individual as well as
organizational performance (Bartram et al., 2014; Xian et al., 2019). We propose that HPWS
practices can foster a positive social climate within an organization. Social climate can be
defined as “the collective set of norms, values, beliefs that express employees’ views of how
they interact with one another while carrying out tasks for their firm” (Collins and Smith,
2006, p. 547). Existing literature demonstrates that HRM practices have a positive effect on
HPWS in
Chinese banks
PR
social climate through facilitating knowledge exchange and combination (Prieto and
Santana, 2012) and the development of intellectual capital (Nahapiet and Ghoshal, 1998).
HPWS may support the development of a strong positive social climate through creating
interdependence and norms of reciprocity between workers and their work groups
(Cropanzano and Mitchell, 2005), which may generate high-quality relationships (Collins
and Smith, 2006). Collins and Smith’s (2006) study of 136 high-tech American firms revealed
that commitment-oriented HRM practices are positively associated with organizational
climate.
More specifically, we argue that HPWS practices including training and development,
semi-autonomous work teams, quality work and information sharing will increase the social
climate in a workplace. Extant research has shown that training and development have a
positive effect on workplace relationships and employee well-being (Kooij et al., 2013).
Moreover, semi-autonomous work teams, quality work design and information sharing may
facilitate enhanced management and employee interaction, communication and cooperation
and trust (Cheung et al., 2017; Gagne, 2009; Prieto and Santana, 2012).
Taken together, we propose:
H1. HPWS is positively related to social climate.
HPWS, social climate and social identification
Recent studies have turned their attention to the role of social identification in the HRM–
performance chain within organizations (e.g. Andersen and Andersen, 2019; Bartram et al.,
2014; Haslam, 2014). Social identity theory is a useful framework to understand how HPWS
uses social processes to develop social identification and positive in-group behaviours (e.g.
psychological empowerment) within work groups, which may lead to the increase of
individual performance (Ashforth and Mael, 1989; Haslam, 2014; Kark et al., 2003). Studies
have shown that HPWS practices (e.g. quality of work, participative leadership and semiautonomous teams) are associated with social cohesion, which is an important outcome of
social identification (Campion et al., 1996; Forrester and Tashchian, 2006).
Social identity theory proposes that people want to belong to social groups to increase
their self-esteem. Moreover, “identification matters because it is a process by which people
come to define themselves, communicate that definition to others, and use that definition to
navigate their. . . work” (Ashforth et al., 2008, p. 334). This perception of belonging underpins
an individual’s social identity (Tajfel and Turner, 1986). Social identification plays an
important function in forming collective attitudes and associated behaviours (Lam et al.,
2016). Social identification produces positive in-group attitudes and behaviours (Hogg and
Terry, 2000; Lam et al., 2016). Social identity theory examines how social categorization
produces prototype-based depersonalization of self (change in self-conception and the basis
of perception of others) and others, thereby generating social identification (Abrams and
Hogg, 2004; Hogg and Terry, 2000).
Hogg and Terry’s (2000) seminal work on the social categorization process within social
identity theory suggests that social categorization is the cognitive basis of group behaviour.
The authors argue that social categorization enhances the perceived similarity of an
individual with the relevant in-group prototype. As individuals become embodiments of the
relevant prototype, a process of depersonalization occurs. Hogg and Terry (2000) argue that
social categorization is a process through which an individual cognitively assimilates the self
to the in-group prototype and therefore depersonalization occurs within their self-conception.
This process produces “normative behavior, stereotyping, ethnocentrism, positive in-group
attitudes and cohesion, cooperation and altruism, emotional contagion and empathy,
collective behavior, shared norms, and mutual influence” (Hogg and Terry, 2000, p. 123).
Depersonalization is defined as “a change in self-conceptualization and the basis of
perception of others” (Hogg and Terry, 2000, p. 123). Prototypes are defined as “fuzzy sets
that capture the context-dependent features of group membership, often in the form of
representations of exemplary members or ideal types” and “embody all attributes that
characterize groups and distinguish them from other groups, including beliefs, attitudes,
feelings, and behaviors” (Hogg and Terry, 2000, p. 123). Cohesion and solidarity are
underpinned by perceived group prototypicality. When a group is salient, in-group members
are preferred if they embody the in-group prototype.
There is limited research that directly examines the effect of social climate in an
organization on workers’ social identification, although recent research has found that
organizational support shapes employees’ organizational identification (Lam et al., 2016).
Given that social climate is premised upon social relationships of individuals within a work
group (Prieto and Santana, 2012) and is underpinned by trust, cooperation and shared codes
and language that exist among individuals within a team (Collins and Smith, 2006; Nahapiet
and Ghoshal, 1998), we argue that social climate may be important in the formation of social
identification of individuals in the work unit. Our reasoning is as follows.
Ashforth and Mael (1989) argue that internalization through traditional factors that
underpin group formation (e.g. shared mission and goals, frequent interpersonal interaction
and strong organizational climate) may create a salient, internally consistent and desirable
situation, which may subsequently promote individual identification with work groups in
organizations. Using the social categorization process (Hogg and Terry, 2000), we argue that
HPWS may strengthen (through extensive training, information sharing, employee selfmanaged teams, quality work) social climate (e.g. trust, cooperation and common forms of
language) which may facilitate social identification through the cognitive assimilation of
individuals through depersonalization to the in-group prototype. HPWS through social
climate may facilitate this process through creating a strong prototype by highlighting the
attractive features of group membership (e.g. extensive training, information sharing, quality
work, trust and cooperation among work unit members) and the success of exemplary
prototypical members. As individuals become attracted to such a group, they become
embodiments of the relevant prototype (they take on the norms, values, attitudes and
behaviours of the group) and a process of depersonalization occurs. Using HPWS, managers
may promote desirable attributes of the organization and work unit. HPWS practices that
strengthen the social climate within work units (e.g. bank branches) may produce favourable
in-group attitudes, cohesion, shared norms, altruism and empathy towards the group and its
members – that is, increasing the prototypicality of the group, depersonalization and
promotion of social identification. As individuals are motivated by either/or in combination of
self-enhancement and uncertainty reduction, belonging to a group with high prototypicality
(as facilitated by HPWS and strong social climate) is made more attractive as the group
provides moral support and validation of an individual’s self-concept (Alderfer, 1987). Such a
positive group context may promote social identification as group membership may raise
individual self-esteem as people develop stronger and more fulfilling relationships with group
members and internalize the goals of the workgroup and organization (Shamir, 1990). Given
that in Hypothesis 1, we have established that HPWS may predict social climate, we propose
the following hypothesis:
H2. Social climate mediates the relationship between HPWS and social identification.
HPWS, social identification and psychological empowerment
In this section, we examine the theoretical and empirical reasoning for an alternative
mechanism whereby social identification mediates the relationship between HPWS and
psychological empowerment. Psychological empowerment enables workers to enhance their
self-efficacy, develop meaning for their work tasks and enhance their competency
HPWS in
Chinese banks
PR
(Conger and Kanungo, 1988; Laschinger et al., 2004). Bartram et al. (2014) established that
social identification mediated the relationship between HPWS and psychological
empowerment using a sample of 201 Australian nurses.
We examine further how each HPWS practice can promote the social identification of
employees. Extensive training at the team level, for instance, can increase communication
flows and subsequent coordination of activities among team members. This may promote the
development of shared understanding of tasks among team members (Postmes, 2003). Selfmanaged teams and decentralized decision-making can promote familiarity among team
members and support greater social cohesion (Pfeffer, 1998; Hogg and Terry, 2000). Factors
such as group prestige and distinctiveness are also seen to influence group identification
(Gundlach et al., 2006). High-quality work sends a signal to workers that they are valuable and
are valued by the work group/organization (Pfeffer, 1998) which strengthens the
prototypicality of the work group (e.g. bank branch). Through depersonalization, this may
create a stronger feeling of belonging and loyalty of workers to their work group. Information
sharing about business performance at the organizational and work group level is critical to
HPWS in that it signals to employees that they are trusted and an important part of business
success (Pfeffer, 1998).
Social psychology literature suggests that social identification may be positively
associated with psychological empowerment given that identification with the group has
important “perceptual, motivational, and behavioral consequences” (Kark et al., 2003, p. 248).
Kark et al.’s (2003) study revealed that social identification mediated the relationship between
transformation leadership and followers’ psychological empowerment.
We now examine the theoretical rationale for how social identification may affect each
component of psychological empowerment. First, strong social identification may enhance
the intrinsic value and meaning of an individual’s efforts with regard to the achievement of
collective goals (Shamir et al., 1993). As people seek meaning in their lives, the process of
identifying with groups helps reduce uncertainty in external and internal organizational
environments and create deeper meanings and feelings of connection with the in-group (Hogg
and Terry, 2000). Hogg and Terry (2000) argue that the self-categorization process promotes
an individual’s cognitive assimilation with the in-group prototype encouraging
depersonalization which produces positive in-group attitudes and cohesion, altruism and
emotional contagion. In this situation, individuals are more likely to exert extra effort on
behalf of their work group, especially in work groups that use HPWS.
Second, Wood and Bandura (1989) suggest that an individual’s self-efficacy will be
affected by mastery experiences, modelling or learning from others and social persuasion
such as realistic encouragement. We argue that those individuals who identify strongly
with their work unit and prototypical group members will have greater access to learn
from others, enjoy their encouragement and therefore develop greater success from
learning episodes. This can be explained by group members’ positive in-group attitudes
and empathy especially towards members who display prototypical attitudes and
behaviours (Hogg and Terry, 2000). Moreover, social identification within a group may
provide individual members with psychological safety and feelings of self-efficacy which
is central to the self-categorization process (Ashforth et al., 2008; Hogg, 1993). Third, in
relation to impact, we suggest that given the positive outcomes of social identification (e.g.
in-group cohesion, cooperation and altruism), group members will celebrate the impact of
individuals’ efforts associated with the achievement of collective goals. This further
reinforces the high prototypicality of the group, its distinctiveness and the importance of
self-enhancement of individual members (Hogg and Terry, 2000). Fourth, the influence of
social identification on autonomy is complex and not fully understood. We suggest that at
the heart of HPWS is the promotion of autonomy, self-reliance and skill enhancement of the
individual so that they can contribute their best to the work group (Bartram et al., 2014).
Organizations that use HPWS should create prototypical values that enable and
strengthen an individual’s sense of autonomy to attract them to the group and increase
their self-efficacy. Alternatively, social identification may increase the propensity for
conformity to group norms and may even stifle autonomy. Extant research has
demonstrated that psychologically empowered employees feel committed to their jobs
and are more productive overall (Bos-Nehles et al., 2013; Laschinger et al., 2004; Mishra and
Spreitzer, 1998). We therefore propose:
H3. Psychological empowerment mediates the relationship between HPWS and social
identification.
HPWS, social climate, social identification, psychological empowerment and job
performance
Given the aforementioned three hypotheses, we propose a serial mediation hypothesis such
that social climate, social identification and psychological empowerment will sequentially
mediate the relationship between HPWS and job performance. Social identity theory,
through the social categorization process, can inform the proposed sequential mediation
hypothesis. As noted earlier, we argue that HPWS may help build a social climate at the
branch level which may enhance, through establishing trust, cooperation and common
forms of language, a propensity for employees to socially identify with their work group
through a process of self-categorization in which depersonalization occurs given high
prototypicality and desirability of group membership (Hogg and Terry, 2000). As
depersonalization occurs, individuals will model themselves on “exemplary members or
ideal types” and attempt to “embody. . .. the beliefs, attitudes, feelings, and behaviors” of
the in-group (Hogg and Terry, 2000, p. 123). This process is facilitated by HPWS and social
climate that make the group prototype simple, clear and consensual for individuals to
embody (Hogg and Terry, 2000). Moreover, HPWS and social climate may promote
perceived similarity of an individual to the in-group (e.g. bank branch) through creating a
desirable prototype in which he/she depersonalizes the self as a means of increasing their
self-esteem (e.g. I can get promoted) and/or uncertainty reduction (e.g. I know how to behave
to be accepted and supported). Hogg and Terry argue that group cohesion is a reflection of
depersonalized, prototype-based inter-individual attitudes. Social categorization, promoted
by HPWS and a strong social climate, may encourage an individual to embody the
prototypical values, attitudes and behaviours of the in-group which may create a situation
of favourable treatment (e.g. support, empathy and practical help for prototypical
members). This process may promote positive social cohesion and positive in-group
member attitudes (e.g. psychological empowerment) and ultimately high levels of in-role
performance through a willingness to exert effort on behalf of the group (Hogg, 1993). The
“sense of oneness” that develops between an individual and group strengthens the team
members’ willingness to contribute personal resources to the organization (Cregan et al.,
2009). This process may facilitate an increase in “ability” through training, development
and learning as team members share knowledge, skills and socialize (Wood and Bandura,
1989). Moreover, a workgroup that promotes trust and cooperation will have individual
members that have a higher social identification and subsequently exhibit strong group
loyalty because they have a positive impression of their group membership (Van Vugt and
Hart, 2004). These individuals will be highly motivated as they transcend their self-interest
for group purposes. Work teams with strong group identification create opportunities for
members to learn, grow and demonstrate their loyalty through performance (Shamir et al.,
1993; Sterling and Boxall, 2013).
A substantial amount of research over the last two decades has demonstrated that
psychological empowerment predicts employee job performance (Bartram et al., 2014;
HPWS in
Chinese banks
PR
Fong and Snape, 2015; Spreitzer, 1996). Seibert et al. (2011, p. 985) suggest that “theorists have
argued that psychologically empowered employees anticipate problems . . .. exert influence
over goals and operational procedures so that they can produce high-quality work outcomes
and demonstrate persistence and resourcefulness in the face of obstacles to work goal
accomplishment”. Taken together (and as summarized in Figure 1) with the reasoning of the
aforementioned hypotheses, we propose:
H4. Social climate, social identification and psychological empowerment sequentially
mediate the relationship between HPWS and job performance.
Method
Sample and procedure
We gathered questionnaire data from employees and their immediate managers in 62
branches from 16 banks in southwest China during 2014 and 2015. A full description of the
sample can be found in anonymous (2019). In the first phase of data collection, the 62 branch
managers were given hard-copy questionnaires and asked to distribute them to up to 15
subordinate employees they were responsible for randomly. In the second phase, six months
later, questionnaires were distributed to the same managers to obtain ratings of each
employee’s job performance. All participants were assured of confidentiality and the two sets
of questionnaires were coded so they could be matched.
We received 561 matched employee–manager responses (an average of approximately
nine employees per branch), yielding a response rate of 95%. We obtained this relatively high
response rate largely due to the fact that one of the authors went to each of the bank branches
with a research assistant to carefully explain the purpose of the study and its benefits to each
organization, and this was further complemented by reminders being sent to the managers
responsible for collecting the questionnaires. In addition, the university for which this author
works specializes in the finance and economic education and has a strong institutional
connection with the finance sector. Some of the employees and managers were educated by
this university and therefore have the affinity with the university and research that would be
beneficial to their people management and bank performance.
In terms of the sample profile, the overwhelming majority (85%) of the employees were
aged under 30 years and just over half (53%) were female. The average hours worked per
normal week was 45 (SD 5 7), and they had worked on average five years (SD 5 6) with their
bank. The vast majority of respondents (81%) had a bachelor’s degree or diploma.
Measures
For all focal measures, participants rated the items using a five-point scale (1 5 “strongly
disagree” to 5 5 “strongly agree”).
We measured HPWS using five dimensions from the scale developed by Zacharatos et al.
(2005): training and development/learning (five items); job quality (five items); information
HPWS
Social climate
Branch
Figure 1.
Proposed
conceptual model
Employee
Social
idenficaon
Psychological
empowerment
Job
performance
sharing (six items); use of teams (five items); and relationship with immediate manager (five
items). We created an additive index of HPWS by summing the 26 items (α 5 0.88).
Employees rated the social climate of the bank branch using Prieto and Santana’s (2012)
ten-item scale. A sample item is “Employees in this organisation have relationships based on
trust and reciprocation”. We averaged the ten items to form a composite measure, with higher
scores indicating a more positive social climate (α 5 0.94).
Social identification was measured using three items from the scale developed by Hinkle
et al. (1989). A sample item is “I am glad I belong to my branch”. We averaged the three items
to form a composite measure, with higher scores indicating greater work-unit
identification (α 5 0.73).
We assessed psychological empowerment using the 12-item scale developed by Spreitzer.
This previously well-validated measure consists of four three-item sub-scales tapping the
psychological empowerment dimensions of meaning, competence, self-determination and
impact. In line with Spreitzer, we averaged the four sub-scales to form an overall
psychological empowerment score (α 5 0.89).
The branch manager rated the job performance of each employee in their unit using
Williams and Anderson’s seven-item scale. A sample item is “this person meets the formal
performance requirements of their job”. We averaged the seven items to form a composite
measure of job (in-role) performance (α 5 0.86).
Control variables
In line with prior work (Bartram et al., 2014, anonymous, 2019), we included age of the
employee (measured on a six-point scale from 1 ≤ 25 years to 6 5 65 years and over), their
gender (1 5 male, 0 5 female), education level (coded 1 5 secondary school or less to 3 5 post
graduate or higher) and hours worked per week as control variables. We did not include job
tenure as a control variable as it was highly correlated with age (r 5 0.84) and would lead to
concerns over multicollinearity. At the branch level, we included the size of the branch as a
possible confounder of the relationship between HPWS and social climate (e.g. smaller
branches may have more favourable social climates).
Method of analysis
Multi-level modelling was used to analyse the data as the study had variables at both the
individual (employee) and work group (branch) levels. Using robust maximum likelihood
estimation in Mplus 7.4, we tested the hypothesized indirect effects using the approach
recommended by Pituch and Stapleton for group-level and participant-level mediators. To
test the mediation hypotheses, we utilized the Monte Carlo method for testing indirect effects
calculated using the asymptotic covariance matrix of estimates and the recommended 20,000
random simulated draws to construct the sampling distribution for each indirect effect (cf.
Preacher and Selig, 2012). A Monte Carlo simulation is a useful and statistically powerful
procedure that can be used where non-parametric bootstrapping is not easily conducted, such
as with multi-level data. It can also be easily applied where there were three or more mediators
in sequence, such as that for testing our serial mediation hypothesis (Hypothesis 4) in the
present study (Tofighi and MacKinnon, 2015).
Results
Construct validity
To test convergent and discriminant validity, a confirmatory factor analysis (CFA) was
conducted for the five study constructs (HPWS, social climate, social identification,
psychological empowerment and job performance). We used scale items as indicators, except
HPWS in
Chinese banks
PR
for HPWS and psychological empowerment where we used the sub-scales as indicators. This
five-factor model (using robust maximum likelihood estimation with a correction for nonindependence of observations) yielded a relatively good fit χ 2 (df 5 615) 5 1,502;
RMSEA 5 0.05, TLI 5 0.90; CFI 5 0.90. A four-factor model combining social identification
and psychological empowerment yielded a poorer fit χ 2 (df 5 618) 5 1,714; RMSEA 5 0.06,
TLI 5 0.87; CFI 5 0.87, as did a four-factor model combining social climate and HPWS, χ 2
(df 5 618) 5 2,806; RMSEA 5 0.07, TLI 5 0.82; CFI 5 0.83. A one-factor measurement model
(where all indicators loaded on to a common factor) resulted in a very poor fit, χ 2
(df 5 619) 5 3,175, RMSEA 5 0.09, TLI 5 0.77, CFI 5 0.78. These results provide evidence for
construct validity of the measures used in our study.
Aggregation tests
We conceptualized HPWS and social climate as work group (branch) level constructs. The
mean within-group agreement (rwg) for the HPWS measure was 0.98 and 0.97 for the social
climate measure, indicating excellent within-group consensus. The ICC1 (intraclass
correlation) values for HPWS and social climate were acceptable (0.22 and 0.20,
respectively) and the corresponding ICC2 values (which measure the reliability of the
aggregated group means) were also acceptable (0.72 and 0.71). These results demonstrate it is
appropriate to aggregate and examine HPWS and social climate as work group-level
constructs.
Multi-level modelling
Table 1 reports the means, standard deviations and correlations of our study variables.
Table 2 presents the full results of our multi-level regression analyses, whereas Figure 1
presents a summary of the results of our hypothesized mediation model.
Hypothesis 1 predicted that HPWS is positively related to social climate. To minimize the
risk of common method variance in testing this group-level hypothesis, we followed Ostroff
et al.’s split sample approach and randomly selected 50% of employees within each branch to
construct the HPWS scores and the remaining 50% to construct the social climate scores. In
support of Hypothesis 1, we found a positive relationship between HPWS and social climate
(β 5 32, p < 0.01).
Hypothesis 2 predicted that social climate mediates the relationship between HPWS and
social identification. A Monte Carlo confidence interval for the indirect effect of HPWS on
social identification via social climate was 0.09 (95% CI: 0.02–0.16). Given that the 95%
confidence interval excludes zero, Hypothesis 2 was supported.
Hypothesis 3 predicted that psychological empowerment mediates the relationship
between social identification and job performance. A Monte Carlo confidence interval for the
indirect effect of social identification on job performance via psychological empowerment
was 0.05 (95% CI: 0.01–0.10) and excludes zero. Hence, Hypothesis 3 was supported.
Hypothesis 4 predicted that social climate, social identification and psychological
empowerment sequentially mediate the relationship between HPWS and job performance. As
shown in Figure 2, this is a complex four-path serial mediation model where three mediators
(social climate, social identification and psychological empowerment intervene in a series
between HPWS and job performance (Tofighi and MacKinnon, 2015). A Monte Carlo
confidence interval for the indirect effect of HPWS on job performance via the three mediators
in sequence was 0.01 (95% CI 5 0.005–0.2), thereby supporting Hypothesis 4. As shown in
Figure 2, in addition to its indirect effect via social identification, social climate had a direct
positive effect on psychological empowerment (β 5 11, p < 0.05).
Finally, Table 2 shows that HPWS, holding constant all variables in the model, had a
positive relationship with job performance (β 5 14, p < 0.05), suggesting there may be other
87.84
3.66
2.69
M
7.10
0.37
0.97
SD
0.38*
0.04
1
0.10
2
3
4
5
6
7
8
9
Employee
4
Job performance
4.00
0.54
0.18**
0.02
0.06
5
Social identification
3.65
0.61
0.38**
0.36**
0.06
0.17**
6
Empowerment
3.47
0.57
0.32**
0.35**
0.09*
0.14**
0.55**
7
Gender
0.47
0.50
0.05
0.01
0.08
0.05
0.02
0.06
8
Age
2.00
0.67
0.10*
0.16**
0.01
0.09*
0.06
0.03
0.11**
9
Education
2.15
0.40
0.02
0.01
0.08
0.02
0.02
0.05
0.03
0.06
10
Hours worked
45.43
7.33
0.05
18**
0.02
0.02
0.16**
0.20**
0.13**
0.06
0.15**
Note(s): Gender coded 1 5 male, 0 5 female. Age coded 1 ≤ 25 years to 6 5 65 years and over. Level of education coded 1 5 high school to 3 5 masters or higher. Branch
size coded 1 ≤ 25 employees to 5 ≥ 50 employees. Branch-level variables (branch size, HPWS and social climate) are assigned down to correlate with employee-level
variables. N 5 561 employees nested within 62 branches and 16 banks
*p < 0.05 **p < 0.01
*Correlation is significant at the 0.05 level (two-tailed)
**Correlation is significant at the 0.01 level (two-tailed)
Branch
1
HPWS
2
Social climate
3
Branch size
Variable
HPWS in
Chinese banks
Table 1.
Means, standard
deviations and
correlations among the
study variables
PR
Model 1 Social
climate (level-2)
Model 2 Social
identification
–
–
–
–
–
0.01 (0.04)
0.06 (0.04)
0.03(0.04)
0.08 (0.04)*
–
–
Level-1
Gender
Age
Education
Hours worked
Social ID
Empowerment
Table 2.
Results of multi-level
regression analyses
Model 4 Job
performance
0.06 (0.03)
0.09 (0.04)*
0.05 (0.03)
0.08 (0.06)
0.47 (0.06)**
0.03 (0.04)
0.01 (0.05)
0.05 (0.04)
0.08 (0.04)
0.12 (0.05)*
0.11 (0.04)*
Level-2
Branch size
0.04 (0.14)
0.01 (0.03)
0.01 (0.02)
0.01 (0.03)
HPWS
0.32(0.11)**
0.26 (0.03)**
0.14 (0.05)**
0.14 (0.07)*
Social climate
–
0.27 (0.06)**
0.11 (0.05)*
0.08 (0.09)
0.10
0.21
0.37
0.06
R2
Note(s): Standardized regression coefficients reported with robust standard errors in parentheses. R2 based
on total variance explained. N 5 561 employees within 62 branches and 16 banks
*p < 0.05
**p < 0.01
HPWS
Branch
Employee
Figure 2.
Results of
hypothesized
mediation model
Model 3
Empowerment
0.32**
Social climate
0.26**
0.47**
Social
idenficaon
0.11*
Psychological
empowerment
Job
performance
Note(s): Standardized regression coefficients reported. N = 561 employees nested within
62 branches and 16 banks. Control variables were included in the modelestimationbut not
shown for ease of presentation. *p < .05** p < .01
mechanisms through which HPWS impacts job performance other than the social processes
studied here. With regard to the robustness of our findings, statistical inferences for our four
hypotheses were not impacted by the inclusion of random or fixed effects at the bank level in
the estimated models, suggesting that the branch level is the appropriate level of analysis to
test the hypotheses.
Discussion
This study contributes to HPWS research by examining how HPWS utilizes social processes
to increase job performance. It demonstrates that social climate and social identification both
play an important role in explaining how HPWS positively affects psychological
empowerment and subsequent job performance. We found full support for all our
hypotheses: HPWS was positively related to social climate; social climate mediated the
relationship between HPWS and social identification; and psychological empowerment
mediated the relationship between social identification and job performance. Moreover, our
exploratory hypothesis, which stated that social climate, social identification and
psychological empowerment sequentially mediated the relationship between HPWS and
job performance, was also supported. Our findings suggest that at the heart of the HRM–
performance chain is the critical role of social identification through social categorization in
professional work groups such as Chinese bank branches. We examine further the theoretical
implications of our findings for HRM scholars and present practical implications for HR
managers, discuss limitations and avenues for future research.
Theoretical contributions
We contribute to the advancement of both HRM and social identity theory. First, we
contribute to social identity theory through its application to HRM by shedding greater light
on how social identification processes, through serial mediation, inform our understanding of
the HRM–performance chain. Our study fills a research gap by examining how HPWS may
contribute to a strong social climate which may enable social identification, impact
psychological empowerment and ultimately the job performance of employees. We
demonstrate the efficacy of social identity theory in explaining the serial mediation
process, in particular, how social climate at the work group level may enable social
identification to take place. We argue that social categorization may facilitate the serial
mediation process as HPWS may create a strong prototype by highlighting the attractive
features of group membership (e.g. extensive training, information sharing, quality work,
trust and cooperation among work-unit members).
Second, using social identity theory, we have been able to shed new light on how HPWS
may contribute to enhancing employee performance through multi-level social processes. We
contribute to further understanding of how group-level (e.g. bank branch) HPWS and social
climate may affect employee attitudes towards their branch and subsequent in-role
performance. Social climate through HPWS may enhance both the attractiveness of group
membership and prototypicality of the group that encourages further depersonalization of
individual members, increasing their social identification with the group and their sense of
belonging which has positive performance implications.
Practical implications
Our study has important management implications. First, HPWS may translate into
individual performance though a supportive social climate in which staff identify themselves
with their work team. This suggests that organizations should pay close attention to
understanding how their HPWS system can foster a strong social climate to enhance
employee identification. In particular, the effective implementation of HPWS by line
managers will play a major role in supporting a strong social climate and social identification
in work groups through social categorization processes (Boxall and Purcell, 2011). This may
require further management and leadership development of line managers to ensure they
have a strong understanding of HPWS functions, their implementation and evaluation, as
well as their role in supporting a strong social climate and the processes through which
people belong to groups. Effective management development is particularly important in
China because of the shortage of well-qualified managers, and firms tend to recruit rather
than train them in-house (e.g. Cooke et al., 2014).
Second, as the nature of work is becoming increasingly more complex and interdependent,
enabling not just individuals but also work groups to function effectively, it is critical for
departments and work groups to promote a collective understanding of HRM messages with
shared values and goals (Bowen and Ostroff, 2004). Our findings demonstrate that HPWS
may promote a strong social climate and subsequent social identification with performance
implications largely through social categorization in which individuals’ depersonalization to
group prototypes is critical. Managers need to invest in developing strong work group
prototypes that facilitate greater cohesion, emotional contagion and empathy among work
HPWS in
Chinese banks
PR
group members (Hogg and Terry, 2000). This may be achieved through the implementation of
HPWS that invests in training, development and learning, provides high-quality jobs and
promotes information sharing and productive relationships with the immediate managers
(Boxall et al., 2011; Ulrich, 2016).
Limitations and future research direction
This study contains some limitations. First, our research sites were focussed on one main
region in a large country, although state-owned banks in China operate in a relatively similar
environment and regulatory constraints. Second, our study examined only one industry with
a relatively homogeneous workforce (i.e. relatively young and highly educated employees
who are mostly on fixed-term employment contract and performance-related pay). This
constrains the generalizability of our research findings to other national settings, industrial
sectors or ownership forms. It is unclear if the same outcomes would be achieved at
workplaces where the workforce profile is more diverse and performance pressure may be
less. Future research should test these hypotheses in different industrial sectors and locations
and in other societal contexts, especially in developing countries where banks remain mostly
state-owned/controlled and are going through reform processes to improve efficiency and
become more market-oriented. Third, although previous work suggests that HR systems are
an antecedent of employee’s subjective attitudes and behaviours (Kehoe and Wright, 2013),
we acknowledge it is possible that social identification and psychological empowerment are
impacted by reverse causation. It is worth noting that a major strength of our study was the
six-month time lag between measurement of job performance (supervisor-rated) and the
antecedent (employee-rated) variables. This design significantly strengthens our confidence
that the study independent variables are an antecedent of job performance.
Conclusion
This study examines the effect of HPWS through social processes on job performance in a
Chinese banking setting. We found that social mechanisms, underpinned by social identity
theory, are useful to explain how HPWS may affect job performance. Our findings suggest
that HPWS influences job performance through complex mechanisms related to social
climate, social identification and psychological empowerment. Our findings extend the
knowledge of the HRM–performance chain as a social process.
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Corresponding author
Timothy Bartram can be contacted at: timothy.bartram@rmit.edu.au
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