Cross‐level effects of high‐performance work systems (HPWS) and employee well‐being: the mediating effect of organisational justice

• Date: 01 April 2016
• DOI: http://doi.org/10.1111/1748-8583.12095
• Published date: 01 April 2016
• Author: Margaret Heffernan,Tony Dundon

Cross-level effects of high-performance work

systems (HPWS) and employee well-being: the

mediating effect of organisational justice

Margaret Heffer nan, Dublin City University Business School, Dublin City University

Tony Dundon, Alliance Manchester Business School, The University of Manchester

Human Resource Management Journal, Vol 26,no 2, 2016, pages 211–231

In this cross-level study, we examine the mediating influence of employee perceptions of the fairness

of human resource practices associated with the high-performance work systems model. Data were

collected from 187 employees in three companies in Ireland. Using cross-level analyses, employee

perceptions of distributive, procedural and interactional justice were found to mediate the

relationship between high-performance work systems and job satisfaction, affective commitment

and work pressure. The findings also point to a ‘management by stress’HPWS relationship,

suggesting diminished employee well-being, less satisfaction and lower commitment. The research

adds to our understanding of the mechanisms through which human resource practices influence

employee outcomes and contributes to debates that move beyond the polemic high versus low

employee well-being debates of HRM. The discussion reviews the theoretical and practical

implications of these results.

Contact: Margaret Heffernan, Dublin City University Business School, Dublin City University,

Glasnevin, Dublin 9, Ireland. Email: margaret.heffernan@dcu.ie

Keywords: high-performance work systems; employee well-being; organisational justice; job

satisfaction;affective commitment; workintensification

INTRODUCTION

Over the last 20years, a burgeoning body of literature has emerged on the ways in

which human resource (HR) practices impact positively on organisational

performance, or a firm’s‘bottom line’(Huselid, 1995). It is often assumed,

somewhat questionably, that bundles of HR practices will be automatically performance-

enhancing for both organisations and employees (Boxall and Macky, 2014). According to

Guest (2011), the rush to demonstrate that HRM improves performance has been at the cost

of conceptual understanding and theoretical explanation. The primary criticism levelled at

high-performance work systems (HPWS) concerns its lack of theoretical development and

the need for a better articulation of the ‘black box’phenomenon –in other words, how and

why a particular set of HR practices may improve (or not) work outcomes and how it

connects with related perceptions of employee fairness and justice (Boxall, 2013; Cullinane

et al., 2014).

While it is known that improved organisational performance is linked to employees’

positive attitudes and behaviours, research that integrates employee data is surprisingly

limited (Boselie et al., 2005). One review notes that few studies have properly tested the

associationbetween HRM and employee outcomes (Boonet al., 2011). Guest (2011) argues that

while researchers acknowledge that a focus on multiple stakeholders, including employees, is

necessary to advance understanding, more research is needed to examine HR practices and

HUMAN RESOURCEMANAGEMENT JOURNAL, VOL26, NO 2, 2016 211

©2016 John Wiley& Sons Ltd.

Pleasecite this article in pressas: Heffernan,M. and Dundon, T. (2016)‘Cross-level effectsof high-performancework systems (HPWS) andemployee

well-being:the mediatingeffect of organisationaljustice’.HumanResource ManagementJournal 26: 2, 211–231

doi: 10.1111/1748-8583.12095

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underlying work processes. An employee perspective is particularly important given that HR

practices are not necessarily implemented as intended (Nishii et al., 2008).

This article contributes to existing debates and knowledge in a number of ways. First, by

researching the neglected role of employees as the primary recipients of HPWS practices, we

contribute to debates by exploring employee well-being from two perspectives –signalling

theory and the ability-motivation-opportunity framework –to examine how HR practices

affect employee well-being. Second, our study contributes to understanding how and why

HR practices may impact employee outcomes by integrating organisational justice as a

potentialmediator to explain the ‘black box’. Using cross-level analysis,we integrate the macro

and micro-levelswithin HRM to better understand the complex,multilevel pathways through

which HRM can influence employee outcomes. Specifically, we illustrate how perceptions of

fairness regarding HR practice implementation influence how employees react to intended

HR practices.

In the following sections, we first review relevant literature and studies and present

our formal hypotheses. We then present a description of our sample and research

method, and finally, we report our findings and consider the implications and limitations

of our study.

THE RESEARCH FRAMEWORK

High-performance work systems and employee outcomes

There is no universally agreed definition of the term HPWS because of broad differences

regarding the theoretical, empiricaland practical approaches used, such as high involvement,

high commitmentmanagement, or best practice HRM (Boxall and Macky, 2009, 2014).Despite

this, however, HPWS can broadly be understood as including a range of innovative HR

practices and work design processes that, when used in certain combinations or bundles,

are mutually reinforcing and produce synergistic benefits. These practices tend to gravitate

around five core areas:(a) sophisticated selection and training, (b) behaviour-based appraisal,

(c) contingent pay, (d) job security and (e) employee involvement (Cook, 2001). In

conceptualising HPWS, we draw on the process view of HR practices proposed by Ostroff

and Bowen (2000). This suggests that HR systems comprise a number of different levels,

including HR policies, practices and processes, which can be linked to outcomes at both

employee and organisational levels (Boxall et al., 2011; Monks et al., 2013; Cafferkey and

Dundon, 2015).

Research on the links between HR practices and firm-level performance is often

managerially biased, with insufficient attention devoted to those at the ‘receiving end’of

HR policy (Boxall and Macky, 2014). A further ‘problem’is its unitarist assumptions, which

presuppose that positive outcomes for organisations will be equally applicable to workers

(Thompson, 2011). Importantly, employees represent more than abstract ‘objects’against

which researchers prod and measure certain responses to a given set of assumptions. They

are active agents and ‘subjects’who can and do shape the world around them (Grant and

Shields, 2002; Dundon and Ryan, 2010). It is, therefore, necessary to explore beyond firm-

level reported data to tease out the role of employees in shaping HRM. Evidence suggests,

for example, that higher firm performance may be due to work intensification (Ramsay

et al., 2000) rather than greater discretion or higher job satisfaction (Wood and de Menezes,

2011). Research on the potential effect of HPWS on employee well-being has been rare

(Harley et al., 2007; Boxall and Macky, 2014). We conceptualise employee well-being from

the two dimensions of Van De Voorde et al. (2012), namely, happiness and health-related

High-involvementHR, organisationaljustice and well-being

212 HUMANRESOURCE MANAGEMENT JOURNAL,VOL 26, NO 2, 2016

©2016 John Wiley& Sons Ltd.