Effects of high‐performance work systems on transformational leadership and team performance: Investigating the moderating roles of organizational orientations

• DOI: http://doi.org/10.1002/hrm.21886
• Date: 01 September 2018
• Author: Seongsu Kim,Joo Hun Han,M. Susan Taylor,Hui Liao
• Published date: 01 September 2018

ORIGINAL ARTICLE

Effects of high-performance work systems on

transformational leadership and team performance:

Investigating the moderating roles of organizational

orientations

Joo Hun Han

1

| Hui Liao

2

| M. Susan Taylor

2

| Seongsu Kim

3

1

School of Management and Labor Relations,

Rutgers University

2

Robert H. Smith School of Business,

University of Maryland

3

Graduate School of Business, Seoul National

University

Correspondence

Joo Hun Han, School of Management and

Labor Relations, Rutgers University,

94 Rockafeller Road, Suite 210, Piscataway,

NJ 08854

Email: jhan@smlr.rutgers.edu

Funding information

The Ministry of Education of the Republic of

Korea and the National Research Foundation

of Korea, Grant/Award number:

NRF-2015S1A5A2A03047915; National

Natural Science Foundation of China, Grant/

Award number: 71728005; National Science

Foundation of the United States, Grant/Award

number: 1632417; National Natural Science

Foundation of China, Grant/Award number:

71632002

This study integrates strategic human resource management (SHRM) and transformational lead-

ership (TFL) literatures to address gaps in each of the two literatures. Building on the concept

of strategically targeted HRM systems and the contingency perspective in SHRM, we propose

that an organization's high-performance work system (HPWS) affects team managers' TFL, and

that the emergence of TFL and the effectiveness of TFL on team performance are contingent

on organizational adaptation and efficiency orientations. Analyses of multilevel data from

179 teams in 44 organizations revealed a positive relationship between HPWS and TFL, which

was positively and negatively moderated by adaptation and efficiency orientations, respec-

tively. Further, TFL was positively related to team performance and negatively moderated by

efficiency orientation. Finally, the results supported a multilevel, moderated mediation effect

with the indirect effect of HPWS on team performance via TFL varying significantly as a func-

tion of adaptation and efficiency orientations. Implications for the SHRM and leadership litera-

tures and practice are discussed.

KEYWORDS

high-performance work systems, transformational leadership, organizational adaptation

orientation, organizational efficiency orientation, team performance

1|INTRODUCTION

A fundamental task of leaders is to influence followers toward the

achievement of a collective vision and purpose (Locke, 1999). In

recent years, transformational leadership (TFL) has emerged across

studies as particularly effective in fulfilling this responsibility through

the display of the following four behaviors: idealized influence,or

behaviors that cause followers to trust and admire their leader; inspi-

rational motivation, or the articulation of compelling visions and goals

of the organization; intellectual stimulation, or the encouragement of

followers to challenge assumptions and reframe problems; and indi-

vidualized consideration, or attention to each follower's needs (Bass &

Riggio, 2006). Transformational leaders can inspire individual fol-

lowers to go beyond their own self-interest and benefit collective

performance of the group to which they belong (Hoffman, Bynum,

Piccolo, & Sutton, 2011). As work is increasingly structured around

teams—defined as collectives embedded in an organizational context

where employees work interdependently toward common goals

(Mathieu, Maynard, Rapp, & Gilson, 2008)—substantial research has

investigated the roles of TFL in team context and generally found

positive effects of TFL on team performance (Wang, Oh, Courtright, &

Colbert, 2011).

Despite the many studies on TFL and its performance outcomes

in teams, however, relatively less research has to date examined the

antecedents of TFL behaviors (Avolio, Walumbwa, & Weber, 2009;

Nielsen & Cleal, 2011). Existing research in this regard has largely

focused on leaders' individual traits such as personality (Bono &

Judge, 2004), locus of control (Howell & Avolio, 1993), and positive

self-evaluation (Hu, Wang, Liden, & Sun, 2012); or attitudes such as

organizational commitment (Jin, Seo, & Shapiro, 2016) and person–

DOI: 10.1002/hrm.21886

Hum Resour Manage. 2018;57:1065–1082. wileyonlinelibrary.com/journal/hrm © 2017 Wiley Periodicals, Inc. 1065

job fit (Guay, 2013). Far less attention has been paid to how TFL is

shaped by organizational context (i.e., stimuli and phenomena that

surround employees, influencing their perceptions and behaviors;

Mowday & Sutton, 1993), despite the fact that a variety of contex-

tual influences likely affect the occurrence of TFL (Walter & Bruch,

2010). The few studies on context and TFL have tended to focus on

the influences of organizational structure. For example, TFL of unit

managers was more likely to emerge in less centralized, more formal-

ized, and smaller firms (Walter & Bruch, 2010) or in an organic struc-

ture (Pillai & Meindl, 1998).

We find that prior research has largely overlooked the roles of

the organization's HR practices as a contextual antecedent of TFL,

even though TFL is essentially a display of specific leader behaviors

(Bass & Riggio, 2006) and HR practices constitute a primary way to

elicit desired employee behaviors (Jackson, Schuler, & Jiang, 2014).

Extensive research in SHRM has clearly showed that a high-

performance work system (HPWS)—a coherent set of HR practices

(e.g., staffing, training, incentive pay, performance appraisal, job

design, and information sharing) designed to improve workforce com-

petence and motivation—is an especially effective means of affecting

employee behaviors (Jiang, Lepak, Hu, & Baer, 2012). In particular,

when organizations have specific strategic objectives such as creativ-

ity (Martinaityte, Sacramento, & Aryee, 2016) and service quality

(Jiang, Chuang, & Chiao, 2015), they orient HPWS toward such

objectives to elicit specific employee behaviors to support the objec-

tives (Jackson et al., 2014). Based on this concept of strategically tar-

geted HPWS, we suggest that team managers' TFL can be a target of

HPWS given the strong evidence for its performance effects (Wang

et al., 2011). The first purpose of this study is thus to identify organi-

zations' HPWS as a novel contextual factor affecting team

manager TFL.

Further, the strategic human resource management (SHRM) liter-

ature suggests that the utility of HPWS in fostering needed employee

behaviors is contingent on the nature of other contextual factors that

surround HPWS, though a limited amount of research has revealed

such contextual moderators for the effects of HPWS (Jackson et al.,

2014). Building on this contingency perspective, we identify other

contextual variables that will influence HPWS in fostering team man-

agers' TFL. Given that TFL is essentially change oriented, where team

managers create new visions and goals for their team members and

develop and stimulate them toward the new visions and goals

(Hoffman et al., 2011), the extent to which organizations are pursuing

change rather than stability is particularly pertinent to HPWS' effi-

cacy to cultivate TFL. To this end, we refer to the strategy literature

and posit two basic, overarching strategic organizational goals

(i.e., adaptation and efficiency orientations) as contextual moderators

for the effects of HPWS on team managers' TFL (Pawar & Eastman,

1997). Organizational performance relies on both adapting to a

changing environment and maximizing efficiency with available

resources. As these two factors inherently tend to create conflict

between change and stability, achieving a balance between them has

been considered a central issue in strategic management (Eisenhardt,

Furr, & Bingham, 2010).

As is the case with HPWS, it seems unlikely that TFL can or

should be the leadership style of choice in all types of organizational

settings (Porter & McLaughlin, 2006; Wang et al., 2011). However, to

date, organizational scholars have paid relatively little attention to the

contextual boundary conditions for TFL (Avolio et al. , 2009). Only a

few studies have examined whether the effects of TFL differ

depending on organizational climate (Jung, Chow, & Wu, 2003) or

organizational structure (Dust, Resick, & Mawritz, 2014). We sug-

gest that an organization 's strategic orientat ion can dictate the rela-

tive importance of change versus stability in the organization, thus

influencing the extent t o which TFL is valued and neede d. Hence,

the second purpose of this study is to reveal organizational adapta-

tion and efficiency ori entations as contextual moderators for the

effect of HPWS on team manager s' TFL and that of TFL on team

performance.

Taken together, we integrate the SHRM and TFL literatures to

examine a moderated mediation model in which the HPWS serves as

a main driver of team managers' TFL, which then transmits the cross-

level influence of the HPWS onto team performance, an outcome

that has received little attention in prior HPWS studies (Jiang, Takeu-

chi, & Lepak, 2013). Two organizational goals (i.e., adaptation and

efficiency orientations) are theorized to strengthen and weaken the

cross-level linkage of HPWS–TFL–team performance, respectively

(see Figure 1). The current study makes central contributions to both

SHRM and TFL literatures. Specifically, we extend the SHRM litera-

ture by (1) developing the concept of HPWS targeted at team man-

agers' TFL and identifying organizational orientations as contextual

moderators for the effects of HPWS, and (2) extending the outcome

of HPWS to team performance through the mediation of a more

proximal behavioral outcome—that is, team managers' TFL. We also

advance the TFL literature by identifying (1) the HPWS as a novel

contextual antecedent to TFL and (2) organizational orientations as

contextual moderators for the effects of TFL.

2|THEORY AND HYPOTHESES

2.1 |Strategically targeted HPWS

SHRM scholars have suggested that HPWS can lead to higher perfor-

mance at varying levels by inducing desired employee behaviors

(Jackson, 2013). HPWS elicits and sustains such needed role behav-

iors by acquiring and/or developing employees' competencies, moti-

vating them to use the competencies, and providing them with

opportunities to perform (Boxall & Purcell, 2008; Gerhart, 2007). The

TFL Team

performance

Adaptation orientation

Efficiency orientation

TFL-enhancing

HPWS

Organizational-level

Team-level H1 +

H2 +

H3 - H4 +

H5 -

H6 and H7: Moderated mediation

+

FIGURE 1 Proposed model of this study. TFL and HPWS refer to

transformational leadership and high-performance work system,

respectively.

1066 HAN ET AL.