Internally Oriented High-performance Work Systems and Organizational Performance: Empirical Evidence from Banking Sector in Pakistan

Abstract

This study analyses the influence of high-performance work systems on organizational performance. As, previous studies have mostly focused on individual HR practices in determining the influence of HR practices on performance so research is needed to analyze the combined effect of HRM practices as system to understand the importance of HR on performance. Based on AMO framework, this study investigated the effect of HR system on organizational performance using employees’ perspectives in highly interdependent work settings. In this study, primary data was obtained from 218 bank branches in collaboration with Institute of bankers Pakistan and bank management in the form of managers’ and employees’ perceptions about HPWS and its effect on performance. Results suggest that HPWS was significantly linked to deposits, advances and unit level profitability. Results pointed out new insights to HPWSperformance literature from employees perspectives.