High Performance Work System and Organizational

Performance: Exploring the Mediating Role of Stress

Fazal Hussain Awan*, Mohsin Bashir†, Muhammad Abrarffi,
Rizwan Shabbir§ and Shahnawaz Saqib**
Abstract
The aim of this study was to investigate the new dimension of High-
Performance Work Systems by exploring its impact on job
stress,perceived organizational performance and perceived employee
performance. Data was collected through Questionnaire from four
public sector organizations. The results show that there is positive
relationship between independent variables and mediating variable as
well as independents and dependent variables. It has been found that
High-Performance Work System Practices being used as HR Practices
create Stress. This study examines the correlation between high-
performance work system (HPWS) and individually perceived stress.
Contrary to the past studies which evaluate HPWS emphatically, this
investigation stresses the potential drawback of HPWS and proposed
that some HPWS are more emphatically connected with upgraded
anxiety than others. Data was collected on the basis of already
established questionnaire and reliability ofeachpartofinstrumentwas
calculatedwhichwasinacceptable range.Three Hundred questionnaires
were distributed among employees with the approval of Competent
Authority. 167 respondents was given response which is 59% and 133
respondents did not send back the questionnaire, the response rate was
56%. The d ata was investigated through software SPSS(20.0). Results
indicate that there is a positive association between HPWS and
individual perceived stress among employees.
Keywords: High-performance work practices; Job Rotation, Selection,
training, performance appraisal, compensation, job involvement, internal
career opportunity, employment security, job Stress

Introduction
High Performance Work systems are basically a collection of human
resource practices covering the three broad areas, high employee

*
Fazal Hussain Awan, MS Scholar, Division of Management, Lyallpur Business
School, GC University, Faisalabad, Pakistan
†
Mohsin Bashir, Assistant Professor, Division of Management, Lyallpur
Business School, GC University, Faisalabad, Pakistan
ffi
Muhammad Abrar , Director, Lyallpur Business School, GC University,
Faisalabad, Pakistan Email: [email protected]
§
Rizwan Shabbir , Assistant Professor, Division of Marketing, Lyallpur
Business School, GC University, Faisalabad, Pakistan
**
Shahnawaz Saqib , Ph.D Scholar, Division of Management, Lyallpur Business
School, GC University, Faisalabad, Pakistan
 Education and Information Management (EIM 2017)

involvement practices, second one is a human resource (HR) practices,

and at the end the 3rd one is reward and commitment practices (Sung &
Ashton, 2005). Actually high performance work practices intended to
enhance the individual level outcomes such as organizational
commitment, knowledge, skills, and abilities and, consequence, these
practices increase the organizational performance (Jiang, Lepak, Hu, &
Baer, 2012). Literature on strategic HR management provides a
relationship between HPWS and individual and organizational level
outcomes such as performance (Appelbaum, Kalleberg, Bailey,& Berg,
2000; Chaudhuri, 2009;Huselid, 1995).
In the opinion of Kroon, van de Voorde, and van Veldhoven, (2009) and
Godard, (2004) HPWS has negative consequences also; one out of such
consequences is its relationship with perceived stress. Stress can be
defined as “a particular relationship between the person and the
environment that is appraised by the person as taxing or exceeding his or
her resources and endangering his or her well-being” (Lazarus
&Folkman, 1984). Stress at individual level is an important factor for
organizations in the applicability of HPWS
In spite of stress promoting potential of high performance work systems
(HPWS), empirical assessments of association between HPWS and stress
requires to be explored extensively. Partially, we still lack a sufficient
understanding how HPWS are linked with perceived stress (Godard,
2004; Jensen et al., 2013). Stress related research is growing during the
last recent years. Studies emphasize that individuals under stress have a
lower level of health (Leino, 1989; Repetti, 1993; Tennant, 2001),
encompass lower satisfaction level (Bennett, Lowe, Matthews, Dourali,
& Tattersall, 2001; Pugliesi, 1999), and thus show a lower level of
performance as compared to their coworkers than other workers (Kazmi,
Amjad, & Khan, 2008).As pointed out by Topic, Baum,&Kabst, R.
(2016) stress could be a mediating variable in the relationship between
HPWS and firm performance.
As per 4th European Working Conditions Survey conducted by
European Foundation (2007), 22% of European workers/employees
experience stress at workplace which causes a cost of approximately 20
billion EUR for EU15 countries alone (Levi & Levi, 2000). World
Health Organization (WHO) has called stress as greatest health risk of
21stcentury.
In literature positive impact of high performance work practices have
been found on labor productivity (Datta et al. 2005), on the
organizational effectiveness and performance (Liu et al. 2006),
associated with lower level of turnover intention within workers (Arthur
1994) and profit per employee (Guest et al. 2003). HPWS bring the

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harmony among workers and organize the work settings in such a way
that it ensures benefits to the both employer and employees by enhancing
the labor efficiency (Cappelli and Neumark 2001). Youndt et al. (1996)
investigated the impact of HRM on organizational performance and
found that HRM has a positive impact on performance in firms. Research
conducted by Black and Lynch (2001) supports the argument that HRM
practices have a significant impact on firm performance.
In the opinion of Boxall and Macky, (2014) there is no single universally
accepted definition high performance work system due to significant
differences in theoretical concepts, empirical and practical approaches. In
literature high performance work system has been studied as high
involvement practices, high commitment practices and best human
resource practices. High performance work practices have been found in
labor productivity Datta et al. 2005), on the organizational effectiveness
and performance (Liu et al. 2006), associated with lower level of
turnover intention within workers (Arthur 1994) and profit per employee
(Guest et al. 2003). HPWS bring the harmony among workers and
organize the work settings in such a way that it ensures benefits to the
both employer and employees by enhancing the labor efficiency
(Cappelli and Neumark 2001). Youndt et al. (1996) investigated the
impact of HRM on organizational performance and found that HRM has
a positive impact on performance in firms. Research conducted by Black
and Lynch (2001) supports the argument that HRM practices have a
significant impact on firm performance. Wood (1999) used universal and
contingency approach to investigate the relationship of HRM practices
and organizational performance and identified that HR practices enhance
the firm‟s performance. Huselid (1995) argued that HR practices are said
to be High Performance Work systems if such practices boost up
organizational performance.
Job Rotation:
Job rotations may be defined as lateral transfers of employees between
different jobs or sometimes different departments in a firm. After
rotation, workers do not occupy jobs forever however do not normally
come back to previous positions. Researchers have advocated that
frequent job rotations reduce boredom and fatigue (Walker, Guest,
1952). Job assignments are considered a key source of professional
learning (Howard and Bray, 1988). Morrison and Hock 1986 argues that
chronological job transfers are significant for professional development.
Giffi et al (1990) states that lean practices are positively linked with high
performance. WenHsien Ho (2009) proposes that Job rotation helps
workers to obtain numerous skills and capabilities and broaden the
vision.

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Job rotation is often considered the source to boost the skills of

employees and to decrease monotony in daily routine work. It can also
be used as a means to alternate between high and low energetic loads of
different jobs (Jonsonn, 1988).Job rotation is sometimes used to get a
person in organization which best fits to a specific job. It also increases
efficiency of an employee and enhances job satisfaction among
employees. The research work of Ortega (2001) showed that job rotation
helped organizations to learn about the productivities of their employees
and the profitability of different activities or jobs. Eguchi (2005) stated
that employees refrain from performing influence activities due to job
rotation. Employees involve in influence activities for their personal
benefit.
According to Eriksson and Ortega (2006), job rotation is adopted for
employee and employer learning, employer and motivation of
employees. Job rotation gives a great exposure of a greater variety of
experiences to employees and thus makes employees more
knowledgeable and versatile. Hence, job rotation helps workers to
acquire the vast competence of business, develop their abilities and to
prepare them for top management positions.
Employer learning theory describes that employers have to take
promotion decisions by observing their performance. Job rotation helps
employers to know their workers by evaluating their performance. Job
rotation helps employers to know about the strengths of their employees
and so it helps to improve promotion decisions. Lastly, the employee
motivation theory argues that job rotation increases motivation of
workers and decreases boredom. It also plays role to enrich an
employee‟s career. Skill variety can be defined as the extent to which an
employment obliges various competencies of employees. The level to
which individuals think personally liable for their tasks or toil is called
autonomy. Feedback is the level to which employment supplies
information about the degree of task completion.
Selection:
Selective staffing, job security, training, empowerment, rewards,
teamwork and career opportunities that are significant for flight
attendants are treated as the indicators of HPWPs. Kozaket al. (2003)
discuss that effective training programs, empowerment practices and
financial and nonfinancial rewards motivate flight attendants to manage
passengers‟ requests and problems effectively. This is evident among
successful airline firms.
Training:
According to Karatepe and Vatankhah (2014), presence of number of
HPWPs such as training and re-training programs aimed at better use of

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empowerment, rewarding and recognizing high performing flight

attendants and providing them with the promotional opportunities in the
organization as functions of HPWPs leads to increased perception of
organizational support. This is in line with previous studies which found
that these practices increase job related skills and employees‟
commitment (Macky and Boxall 2007). At the same time, the increase in
job variety is positively associated with balance between the work and
family domains (Berg et al. 2003).
Job Involvement:
A process of authorizing workers to take part in making decisions is
termed as employee involvement. Lawler (1996) stated some conditions
which prove the existence of employee involvement in an organization.
First is that employees of a firm should have authority to perform and
make decisions. They should also be provided with the required
information and awareness to utilize their authority effectively. They
should also be rewarded for doing so. If an organization is fulfilling these
conditions then it means that there exists employee involvement in the
organization.
Organizations are focusing on capitalizing human resources to become
more competitive. One technique for maximizing human resources is
employee involvement. Tsui et al (1997) stated that employee
involvement characterizes an investment in workers. Employee
involvement became popular since 1980‟s.It popularized with the raised
fame of human resource management. The idea of employee
involvement is used in terms of authorizing workers.
Employees use their potential creativeness. It helps organizations to
achieve greater organizational efficiency because it motivates employees.
Kerr and Slocum (1987) argue that if employees are provided with such
environment where investment in employees is norm then employees
will have less intention to turnover. Employees are less likely to turnover
and more pivotal to high involvement organization because these
organizations are more focused to workers by design. Instruction and
powers for making decisions are transferred down to the organization
hierarchy so employees in whole organizations and at all ranks accept
more liability for its working and success. High involvement
organizations utilize such HR practices that train and sustain a self-
managing employees (Lawler,1992).
According to Fenton-O‟Creevy (2001), Employee involvement involves
a wide range of practices. Employee involvement can be defined as a
practice by which employees show their influence over the work.
Employee involvement and participation may be direct, indirect or
informal. Workers are individually engaged in a conventional practice in

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direct employee involvement and participation. Team discussions,

upward dilemma solving and recommendation schemes are example of
direct employee involvement and participation. According to Kessler et
al (2004), these forms of employee involvement and participation are
most extensively practiced in Europe. Hall, Hutchinson, Purcell, Terry
and Parker (2011) argued that in indirect employee involvement and
participation only trade union officials or one worker represent their
coworkers on an official committee which may be cooperative discussion
or wellbeing and protection on European Works Councils, company
boards or as component of partnership agreements.
Employee involvement practices are designed to infuse the awareness
and understanding of such workers who are not a part of management
into upper level decision making practices of organization (Benson,
Young and Lawler, 2006). Participation of employees in decision making
in organizations increases the diversity of views judged. Favorable
outcomes are resulted from participation of employees. Previous research
supports this argument (Harrison & Klein, 2007). Responsibility can be
defined as autonomy to manage an employee‟s own work. In lean
production, tasks are delegated to workers that are why they are
considered more accountable. Just assigning responsibility to workers
will not signify that employees will consider themselves accountable
(Cummings & Anton, 1990).
Job characteristic theory employs a structural approach to rising felt
responsibility. It states that independence is an objective employment
plan feature that promotes amplified sensations of liability for task
performance.
Internal Career Opportunity:
Empowerment, reward and promotion are among HPWPs which are
commonly used by such organizations. According to Karatepe and
Vatankhah (2015), career opportunity is the most important indicator of
HPWPs among flight attendants. This maybe the result of the fact that
flight attending job develops its' own specific skills and experiences
which are rarely transferable to other occupations (Liang and Hsieh,
2005), therefore, flight attendants tend to remain in their current
organization and are highly concerned about the possible promotion
opportunities within the organization.
Employment Security:
Jick (1985) states that merging of organizations, downsizing and
restructuring causes stress, anxiety and insecurity in employees about the
nature and continued existence of job. The danger of employment loss is
evaluated for near future. Job security increases job satisfaction of
private sector worker. It also reduces employee‟s intention to turnover.

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It is observed more during contractions when employment opportunities

are less than during expansions when employment opportunities are
relatively more. Employees may identify equal intensity of employment
security during expansionary growth stages and in the start of contra
dictionary growth stages because openings of job decrease before
increase of job losses. Greenhaigh and Rosenblatt (1984) define
employment insecurity as inability to continue a wished stability of an
employment in threatened job circumstances. Clark (2001) proves that
employment security is most significant and negative forecaster of
turnover behavior. He proves it by using the British Household Panel
Study.
Employment security motivates workers to take up a long-standing
perspective (Pfeffer1998) and it also enables them to take initial steps.
Findings of Arnold and Feldman (1982) showed that job security affects
turnover behavior. It also proves that worker‟s intentions to turnover
strongly relate to actual turnover behavior. Ashfordetal (1989) model
also focuses on employee‟s intent to turnover and proves that
employment security considerably decreases turnover intentions. Işık U.
Zeytinoglu argues that job security and insecurity refers to worker‟s
assessment of their current job conditions and worker‟s perception of
current employment from both positive and negative perspectives.
Employment security may refer to the objective aspects of continuous
agreement like full time duty hours and also compensated and unpaid
overtime.
Employment security may also refer to the subjective aspect of perceived
employment security. Perceived employment security is positively
related to intent to continue the job. Objective dimension of employment
security may refer to job forms of continuous agreement, full time duty
hours and also compensated and unpaid overtime. The other aspect of
employment security, the subjective dimension, directs to perceived
employment insecurity conception. It contains the perception of
employee that he is secure from firing and he feels workplace would
remain a safe place as long as they wish to continue working here,
worker feel confident about security of his current job, feel that he will
not be likely fired and will likely continue employment in the job at least
three months from now and do not feel worried about his future in
workplace and he feel security of his job.

Job Stress:
In the opinion of Kroon, van de Voorde, and van Veldhoven, (2009) and
Godard, (2004) HPWS has negative consequences also; one out of such
consequences is its relationship with perceived stress. Stress can be

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defined as “a particular relationship between the person and the

environment that is appraised by the person as taxing or exceeding his or
her resources and endangering his or her well-being” (Lazarus
&Folkman, 1984). Stress at the individual level is an important factor for
organizations in the applicability of HPWS.
Performance (Employee and organizational)
The High Performance Work System (HPWS) has evolved as a
revolutionary paradigm of performance excellence. The basic rationale
behind the success of the high performance work system is „the way
people are managed and treated at work place has an impact on their
performance level i.e. on their productivity and efficiency‟ (Punia and
Garg, 2013). Wood (1999) used universal and contingency approach to
investigate the relationship of HRM practices and organizational
performance and identified that HR practices enhance the firm‟s
performance. Huselid (1995) argued that HR practices are said to be
High Performance Work systems if such practices boost up
organizational performance.
Actually high-performance work practices intended to enhance the
individual level outcomes such as organizational commitment,
knowledge, skills, and abilities and, consequence these practices increase
the organizational performance (Jiang, Lepak, Hu, & Baer, 2012). The
literature on strategic HR management provides a relationship between
HPWS and individual and organizational level outcomes such as
performance (Appelbaum, Kalleberg, Bailey,& Berg, 2000; Chaudhuri,
2009; Huselid, 1995). In the opinion of Boxall and Macky, (2014) there
is no single universally accepted definition high performance work
system due to significant differences in theoretical concepts, empirical
and practical approaches. In literature high performance work system has
been studied as high involvement practices, high commitment practices
and best human resource practices.
The earlier research on outcomes of HPWS has focused on managerial
perspective and organizational related outcomes like organizational
performance. But it has been found that HPWS affect employee related
outcomes more than organizational related outcomes. Further, some
studies have revealed that HPWS results in positive employee attitudes
like job satisfaction organizational commitment and organizational
citizenship behaviour (Dizgah et al., 2011), but there are studies that
revealed negative outcomes such as burnout(Kroon et al., 2009), anxiety
emotional exhaustion and intention to leave. Wood and Menezeand
Jensen et al. (2012) revealed that the negative outcomes like anxiety and
overload get reduced by adequately empowering employee‟s job control.
HR practices give competitive edge to firms over their competitors

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because of their uniqueness, causal uncertainty and difficult to imitate

(Barney, 1991).
Review of Literature
The organization should direct its human resources in optimal manner. It
should pay attention to the staffing, training and development,
continuation and inspiration to amplify the effectiveness or productivity
of its current work force. Job rotation is a good means for training the
human resources (De Cenzo and Robbins, 1996). Job rotation is
beneficial for organizations in many ways. It decreases dullness and as a
result increases morale and motivation of employees for work. Job
rotation supports the principle of getting knowledge through practical
experience. By working in more than one department and learning by
doing results in acquisition of information and expertise related to
various practical fields of the organization. It increases competency of
employees.
Job rotation makes workers handier and employers learn more about
their subordinates strengths and weaknesses through job rotation. The
employee learning theory of job rotation states that rotated employees
accumulate more human capital in comparison to employees who are not
rotated. The process of enabling workers to take part in management
decision making is called employee involvement. Employee
participation, decision making and consultation are different forms of
employee involvement. In employee involvement, every worker is
involved and encouraged in facilitating the organization to achieve its
objectives. Employees are not considered just a cog in machine but input
of every worker is appreciated by the organization. Workers and
management identify that every worker takes part in operations of
business. Lawler describes four attributes of involvement. First is the
authority to take and implement decisions. Second is the knowledge
about results and objectives of business. Third is the bonuses coupled to
performance. Fourth is the related information of the job gained from
training and development. All these features are crucial to attain high
involvement. Evered and Selman (1989) states that participatory climate
apparently allows employees meaningfulness. Employees are more
pivotal to their organization if it is focusing on employee involvement
practices.
“Social exchange theory is a communal, psychological and sociological
viewpoint that clarifies social alteration and constancy as a procedure of
settled exchanges among parties. Social exchange theory hypothesizes
that relationships of humans are shaped by applying a subjective cost
benefit analysis and the evaluation of analysis. A sociologist George
Homans introduced the social exchange theory in 1958”. Models of

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social exchange propose that benefits and costs make decisions that
either the two parties will build relationships with each other or not.
Costs have harmful worth to an individual in a relationship. Wastage of
time, money and effort may be costs. Rewards or benefits have positive
worth in a relationship. Sense of approval, support and friendship are
different forms of rewards. The social-exchange point of view describes
that people analyze the general value of a specific relationship by
deducting its overheads from the benefits provided by it. While dealing
with the social exchange theory as a whole, social exchange results in
satisfaction and reliance of relationships.
Job characteristics theory states that when workers think more liable for
their work, they feel higher intrinsic motivation for work and ultimately
the more concern with the quality of their work. Organizations in many
industrialized countries have employed in extensive firing and
economizing as well as in a more elastic use of labour (shorter tenure,
temporary and part time work and subcontracting) in order to decrease
costs, adjust to modest times and to become more profitable. All this has
aroused the feeling of job insecurity in employees which has negative
organizational outcomes. Now days, organization are trying to provide
job security to their employees.
The industrial scenario has undergone a radical change over past few
decades due to globalization, changing customer requirements and
growing technology. Organizations can decrease costs, make positive
changes in products and processes through innovation, upgrade quality,
production and speed of products to the market. This will improve the
performance of organizations and ultimately helps to compete in market.
To overcome employee turnover is a big challenge which organizations
are facing nowadays. Organizations can achieve competitive advantage
over competitors through their human resources. Employment security
can be defined as threat of loss of job perceived by employee in the near
future. Job security is an employee‟s hope about stability in a job place.
Loss of attractive job characteristics such as shortage of opportunities of
promotion, present working circumstances, and long term job
opportunities play an important role in arising the feeling of job security
or insecurity in employees. When job security is provided to employees
then they feel that they are valuable for the organization and it motivates
them to work hard for the organization and the ultimate result is increase
in organization performance. It also has negative effect on employee
turnover.
Employment security generates an environment of trust among workers
and strengthens their loyalty to the company. Job security involves a
definite level of reciprocity: firstly, a company should signify a

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comprehensible announcement that jobs are safe then workers assuming

that it is fact feel trust and use extensive endeavor for the benefit of the
company. Greenhalgh (1985) describes that job security has positive
association with organizational commitment. Arnold and Feldman (1982)
states that job security has negative association with intention to leave
the job. Job security beliefs are often the product of extensive prior
events and influences like mergers, layoffs and reorganizations etc. Job
insecurity in organizations causes stress in employees and they want to
get rid of this stress. Sometimes employees exhibit quit behavior to avoid
this stress. In this ways an employee eludes the anxiety induced by
employment insecurity by evacuating the circumstances. Based on the
research work of Jacobson (1991), it can be argued that workers may
start to think about leaving an organization as job insecurity rises.
De Cuyper and De White (2005) describes that job insecurity can be
expressed as an aggressor which is often linked with powerlessness. In
today‟s competitive scenario, an incredible stress is placed on
organizations to increase performance of organizations and improve their
competency in the constantly varying world of work
(Ndlovu&Parumasur, 2005). The characteristics of altering world of
work are lifetime education, risk captivating, swiftness and revolution,
complexity and measuring productivity (Wentzel&Geldenhuis,
2005).Psychological Empowerment is a vital concept to think when
handling alterations at work and upgrading performance. Psychological
empowerment enhances employees‟ intellect of personal management
and encourages them to employ in work, which in turn consequences in
positive administrative and organizational outcome (Quinn &Spreitzer,
1997). Pervasive concern to psychological empowerment appeared at a
point when disordered alteration and worldwide competition need worker
initiative and novelty. If a company wants to get competitive edge over
its competitors then it should have the skill to innovate, produce and
employ the entrepreneurial potentials of its workers. These potentials
will be grasped only if supervisor consider themselves psychologically
empowered. Conger and Kanungo (1988) clearly identified a precursor
role for different practices of organization in their description of
psychological Empowerment as “a practice of increasing sense of self-
efficacy amongst members of organization through the recognition of
situations that promote powerlessness and by their elimination by both
formal techniques and informal organizational practices furnishing
efficacy information”.
Meaning is actually the value that a person gives to his work task.
Competence also termed as self-efficacy is the level to which a person
thinks that they possess the capability to successfully play their

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character. Impact can be stated as the degree to which a person

recognizes that they have influence in their instant work atmosphere.
Autonomy is actually the skill for self-direction.Inthis vision,
Empowerment engages more than handing over of power but itentails
perception of workers about their competence, autonomy, meaning,and
impact. Workers who are encouraged to become empowered
psychologically are more self-assured in their skills and capabilities.
They can also manage their work in a better way. They consider that the
requirements of their job are compatible with their morals and
viewpoints and they also think that they influence organizational
outcomes.
Laschinger, Finegan, Shamian and Wilk ( 2004 ) describes psychological
empowerment as an instrument to persuade employees to consider for
themselves regarding the necessities of their employment, build up
meaning for given tasks and boost their proficiency levels. Spreitzer
(1995) states that Psychological Empowerment is present when workers
identify that they have some charge over their job lives. Psychological
empowerment cannot be defined as a rigid personality trait. The
cognitions of psychological empowerment are figured by the
employment environment. He describes psychological empowerment as
an inspirational construct marked in four cognitions which are meaning
(importance), competence (proficiency), self-determination (Autonomy)
and impact (Influence). Collectively these four cognitions depict an
active orientation relatively than a passive direction to a job role. Active
orientation means a direction in which a worker desires and considers
able to figure his job role or circumstance. These four cognitions
combine additively to generate a whole construct of psychological
empowerment. Moreover, the deficiencies of any particular cognition
will deflate, although not wholly remove, the general level of felt
psychological empowerment. Hence the four cognitions indicate „an
almost complete or adequate set of dimensions‟ for recognizing
psychological empowerment (Thomas and Velthouse, 1990).

Chisholm and Vansina (1993) describe that participation is a key element

of empowerment. Wilkinson (1988) argues that power includes the
concept of power sharing with subordinates. In short, the hub notion of
empowerment engrosses upgraded individual inspiration at job through
the entrustment of power to the most inferior rank in an institute where a
proficient decision can be taken (Thomas &Velthouse, 1990). Thomas
and Velthouse (1990) states that psychological empowerment performs
an essential role in attitude and performance of workers.It is supposed
that if the kind of task workers perform intrinsically owns certain

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inherently motivating features, remarkably expertise diversity, task

identity, task importance, independence, and response, workers inclined
to experience three significant psychological conditions: meaningfulness,
responsibility, and awareness of results (Hackman and Oldham 1976).
According to Matt Vidal, enlarged employee involvement in industries is
basics of lean production. Enhancing the duties and proficiencies of
front-line employees has been marked under empowerment.
Psychological Empowerment can also be defined as an insight that
employees can help decide their own job roles, complete meaningful job,
and impact key decisions. Empowerment has been analyzed from diverse
viewpoints, including perceptions of workers, leadership conduct and
management agendas.
A set of practices that emphasize on employment flexibility and
workforce communication and paying attention on evading conventional
obstacles that hinder novelty and constant development can be termed as
human resource management (Shah and Ward, 2003). The goal of this
new system is to motivate workers to boost their proficiency and
knowledge and to assist to develop the manufacturing system. For this
purpose, employees are trained in different tasks or skills. If an employee
is absent from duty then cross trained worker can fill his position
temporarily and he can perform his duties. Cross trained workers can
also be transferred to other teams where their need arise to balance the
line or stabilize the flow of work. These practices constitute a subsystem
denoted as “respect for humanity” (Womack, Jones, and Roos 1990).
Slack et al (2007) describes lean philosophy in manufacturing and
management level both. On the manufacturing level lean philosophy
means performing the simple tasks in a good manner and steadily
improving them and trying hard to eliminate ravage at each stage of
value chain. When we apply this philosophy to managerial level then it
means a set of procedures and skills termed as lean production bundles
that both execute and hold the lean approach. Employees are an asset of
an organization. They are vital for firm success. Investment in human
capital increases firm performance and productivity. If a firm is
extensively using high involvement work practices then it means that
firm is investing in its human capital (Macduffie, 1995). Cummings &
Anton (1990) argued that if a person looks back over his past behavior or
foresee his future behavior then he can develop feelings of responsibility.
Cummings and Anton (1990) portraythese two viewpoints as
„retrospective‟ versus „prospective‟ reflectivity. Culbert (1974)
enlightens the dissimilarity between „after-the- fact accountability‟ and
„before-the-fact realization‟.
Graham (1986) states that before-the-fact realization can be stated as

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supposed liability and after-the-fact accountability can be illustrated as

„consigned responsibility.‟ The focal point of research work on after the
fact responsibility is attribution process. It explains that employees hold
responsible for their acts to themselves, others or their institute (e.g.,
Milgrim, 1974). When employees presume accountability, they are
feeling themselves responsible for the liability assigned to them (Culbert,
1974). When employees presuppose liability, they think themselves
liable for both existing and upcoming acts.
Therefore, supposed responsibility is considered planned and it does not
only involve cooperation on the current job but also include proactive
involvement of an employee in future achievement (Seiling, 2001). Job
characteristic model ( Hackman and Oldham,1975) denote that if an
organization want to make jobs intrinsically motivating then it would
have to give autonomy to their employees in jobs because it is the main
factor for making jobs intrinsically motivating.Overall, the concept gives
stress on the perception of individual about the security in the
employment rather than real job security which can be practiced through
a formal service agreement. Normally service agreement states the
stability in service with no closing stage. Valuable employees are most
valuable assets of an organization so retention of such employees is very
crucial for employers and organizations (Chasserio and Legault2009).
Companies who want to adopt lean practices, they should modify their
traditional models of mass production into innovative forms and
practices for organizing their job systems regularly termed as HPWS
(Shih, Chiang, and Hsu 2006).
HPWS include a lot of practices such as job rotation, involvement and
incentives, team work, training etc. Review of previous literature reveals
that human resource systems have positive effects on organizational
performance. Social exchange theory has been applied to support this
argument in the previous literature. Piening, Baluch, and Salge (2013)
stated that organizations apply a wide range of human resource practices.
Implementation of these practices arouses feelings in individual that they
are supported by the organization and also their organization has trust on
them. In return, these employees become committed to their
organization. They also accept complications which manifests that they
are contented with their employment. Workers contented with their jobs
often exhibit positive emotions and also work hard diligently. They are
usually termed as the customers. It results in improvements in
performance of firm. De Janasz et al., (2002) describes that there is high
global competition and technological innovation and change in the
external environment in which organizations are operating. Such setting
has provoked a need for such employees who have the abilities of taking

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initiative, embracing the risk, encouraging the innovation and coping

with lofty ambiguity (Spreitzer, 1995).
No consensus has been reached concerning the definition of
psychological empowerment despite the fact that it has been at the center
of academic literature. The word of empowerment may be comparatively
new but the conception of awarding job related decision making power
to workers is not new in the management literature. Wide spread concern
in psychological empowerment developed due to global competition.
Global competition and change created the need of such employees
which could take initiative and could bring innovation. Only the
psychologically empowered employees can take initiative and can bring
innovation (Drucker, 1988). Decision making power is granted to
employees as a means of increasing performance.
Few keywords resembling to the terminology psychological
empowerment have existed in literature. Following are described these
key words. Burke (1986) did work on authority delegation. Hackman and
Oldham (1980) studied motivation and job enrichment. Gist and Mitchell
(1992) contributed their work for self-efficacy while Pierce et al (1991)
for employee ownership. Autonomy and participative management was
studied by Block (1987) and self-determination was studied by Deciet al.
(1989). Mills (1983) contributed to self-management. Manz (1986)
studied self-control and self-influence while Lawler and Mohrman
(1989) studied high involvement. Manz and Sims (1991) contributed his
work for self-leadership.
There has not been extensive research work on worker empowerment, its
background and conclusions despite the fact that the journalists
periodically describe the achievement and failure of empowerment
programs. Thorlakson and Murray (1996) investigated the influence of
empowerment endeavors. Most of the empowerment studies have
discussed two approaches. First is the relational or structural approach. It
defines empowerment as delegation of authority to all ranks of workers
down the organization hierarchy within the organization. According to
structural approach, empowerment combines management practices that
grant employees supremacy, charge to give directions and influence
(Conger and Kanungo 1988).
Second is the psychological empowerment approach. It focuses on
experiences of employees. This approach states that empowerment only
exists if employees of an organization have the perception of being
empowered. Tymon (1988) classified academic literature on
psychological empowerment into three broad categories e.g. the
structural approach, the motivational approach, and the leadership
approach. Mintzberg (1983) stated that power is the capability to

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influence organizational outcomes. Delegating the decision making

power far along the organizational ladder and awarding employees the
capability to considerably affect outcomes of organizations will result in
empowering employees. Kanter (1977) stated that decentralization leads
to empowerment. In decentralization, there is more employee
participation due to flattening of hierarchy. London (1993) has the
viewpoint that if a worker has the power to perform his work after that
there exists empowerment in the organization.
Conger and Kanungo (1988) described empowerment in such words “it
is a procedure of developing sensations of self-efficacy amongst different
members of organization through identifying the states that increase
subjection and by the elimination of such conditions by formal
organizational techniques as well as informal practices of furnishing
efficacy knowledge. Thomas and velthouse considered power as vigor
and to empower as to energize and so played their role to make this
approach more broad.
These authors linked empowerment with alterations in cognitive
variables which discover inspiration in employees. The model of
Spreitzer (1995) was founded on Thomas and Velthouse approach. This
model describes empowerment as raised intrinsic motivation evidenced
in four dimensions which are meaning, competence, self-determination
and impact. Meaning is actually the worth of work objective or purpose
for an employee. Self-efficacy may be termed as competence. Autonomy
or independence in launching and continuance of job behaviors is called
self-determination. Influence or effect on work outcomes is termed as
impact.In the leadership approach, leaders energize their followers and
hence empower them to act. They empower them by providing a
stimulating vision for the future. Hence leadership approach emphasizes
on the energizing feature of the empowerment. Leaders motivate
employees to take part in the course of renovating the firm (Yukl, 1989).
Burke (1986) stated that leaders do not just show any direction to their
followers but they provide them with clarity of direction and in this way
they empower their followers. Leaders will give them such direction
which has a great purpose, a valuable cause, a good idea. It will need an
intensive and collective endeavor.

Empowerment can be described as a set of cognitions which are

generally formed by a work environment. Empowerment is not a
permanent personality attribute generalizable across circumstances
(Thomas and Velthouse, 1990). According to Spreitzer (1996),
psychological empowerment embodies an inspirational feature which has
the power to boost positive individual as well as organizational results. It

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is inherent drive observable in four cognitions and reflects an employee‟s

inclination to his job role.The psychological nature of empowerment was
first defined and explained by Thomas and Velthouse (1990). The
researchers recognized four cognitions associated to this concept:
meaning, competence, self-determination and impact. They defined
meaning as purpose of a job‟s objective and competency as self-efficacy.
Self-determination was described as independence to initiate or continue
work and impact as influence of an individual at work. The job
characteristics model is linked with the idea of job enrichment. It also
focuses on the thought that habitual and excessively specialized jobs do
not motivate employees for work. We should redesign work for making
jobs intrinsically motivating. Then employees will manage tasks
normally completed by supervisors. If employees are given opportunity
to design their work week then it would be motivating for employees.
Employees should be given opportunity to have input in their work
schedule.
Empowerment does not only involve designation of power but it also
entails insight of employees of competence, self-determination, meaning
and impact. Workers who experience psychological empowerment have
trust on their abilities, can manage work in a good manner, consider that
the requirements of their job are in accordance with their morals and
ideals, and feel that they have influence on results of organization
(Thomas &Velthouse, 1990).
The proponents of structural approach propose that empowerment can be
termed as a group of management practices and behaviors of managers
that engage designation of responsibility and transfer of authority to
subordinates. Basically, structural empowerment pays a peculiar
attention on such work planning that change the function of exterior
leadership and transfer duties to members of team (Mathieu et al. 2006).
Worker empowerment can be termed as a means to triumphant lean
production. Worker empowerment can be described as delegating
employees more liability and giving them more power of production
process (Boyer, 1996). The main reason is that only workers can
recognize methods of making better the existing process of product
(Forrester (1995).
Gary (2006) stated that when workers do scheduled, recurring
manufacturing or service jobs then employment opportunities will be
less. Such jobs which have complicated tasks and enriching job
characteristics have more potentiality for significant work and autonomy
in employments. Lawler (1986) stated that employee involvement
programs push authority, facts, and comprehension downward to the
inferior job ranks. These are considered as constituting important

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resources. High emphasis and public speaking on open communication

and employee empowerment also sometimes does not change their
behavior. If employees are encouraged and motivated by the
management to share their views and concerns then it is more likely that
employees will take part in different decisions and convey their opinions
to management.Communications practices like briefing groups, periodic
meetings between administration and the employees and team working
on an eternal or dilemma-solving type are typical forms of involvement
(Bryson 2004). Some parts of such schemes involve teamwork and also
increase worker‟s control over immediate working practices so such
parts can be termed as empowering (Harley 2000).
The term empowerment arouses a lot of conceptions. Herrenkohl et al.
(1999) studied and evaluated a number of the previous research studies.
A relocation of supremacy and charge was the research work of Block
(1993). Walton (1985) did work on boosting the worker involvement for
the achievements of the organization and full contribution of employees
in decision making. Senge (1990) did research work on communal vision
between workers and administration. Tracey (1990) studied the self-
motivation.Spreitzer (1996) proposed that sensations of psychological
empowerment are developed in a participative environment. Participative
climate always focuses on contribution of employees at individual level
and employee initiative. She revealed that the recognition, formation and
freedom of workers is appreciated in a participative climate.
The research work of Wallach and Mueller (2006) investigated that
opportunities for participation of employees in decision making
forecasted worker empowerment in a trial of 160 assistants of
professionals. Empowerment entails workers being both capable and
anticipated to take initial steps to a project and able to accept menace. If
this initiative results in a mistake then they can perceive that they will
not be terminated from employment by management or will not have to
face such type of other sanctions for taking the first step towards a
project in the first place (Appelbaum et al., 1999).Job characteristic
model states that objective modifications to an employment would
change according to the perception of the employee about his job along
five core dimensions of job. It is assumed that the presence of these five
core dimensions of job would reveal the extent to which employees will
experience meaningfulness, liability and the information of outcomes of
their work. Meaningfulness is originated by skill variety, task identity
and task significance. Responsibility is originated by independence.
Information of outcomes of work is originated by feedback. These three
psychological conditions mediate the relationship between perception of
employee of his employment characteristic and different measures of

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conclusion e.g. inside inspiration, little absence and turnover, upgraded

quality work performance and satisfaction (Hackman and Oldham, 1975,
1976).
Academics have been interested to study empowerment and it is also a
well-liked idea for managers to put into practice. Basically,
psychological empowerment is associated to cognitions about an
individual‟s work (Spreitzer, 1995). Psychological empowerment
explains the increase in task motivation through the impact of meaning,
competence, impact and self-determination. These four dimensions
indicate workers‟ orientation towards their employments and have been
linked with positive outcomes (Spreitzer, 1995).
Job characteristics outline an employee‟s motivating potential score
which forecasts three key psychological states. These three states are
experienced meaningfulness of work, liability for end consequences and
information of results (e.g., Hackman & Oldham,1976). If there is high
empowerment in a job then job itself will provide motivation to the
employee thus the relationship of employee with his supervisor would be
of less importance because the job itself will give the required motivation
and it is linked to more positive results. On the contrary, when there is
low empowerment in a job then they will not obtain motivation from
empowerment and they have to think to other features of their work lives
to get motivation (Kenneth, 2009). Lawler argued that empowerment is
actually sharing of information of performance of organization with
frontline employees, to give rewards on the basis of performance of
organization, knowledge about contribution for performance of
organization, and authority to make decisions which impact the trend and
performance of the organization. Such allocation happens on three
fundamental stages. The simplest stage entails awarding employees the
authority to recommend and termed as suggestion empowerment.

A level higher is job involvement in which employees are provided with

greater choice in initiation, continuation of their work and they can
decide that how they have to do their work. Geralis and Terziovski‟s
(2003) conducted research on Banks of Australia. They disclosed that
when empowerment practices are concurrently executed then the
ultimate result will be greater employee welfare, production,
performance and quality of service.
Ultimately, organizations spend money and invest other substantial
resources in the development of employees and they give special
consideration to training. The analogous costs which a firm has to bear
due to employee turnover and consequent appointment of successor
employees can be major regarding individual, work unit, and

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readjustments at organizational level (Cascio,1991;Mobley,1982). Wall

et al (2002) stated two extensive uses of term empowerment. Firstly, it
has been employed to express a group of such management practices that
causes increase in decision making power of employee (Labianca et al.,
2000). Various titles have been used for it. Lawler (1986) used high
involvement for it. Walton (1985) used high commitment management
for it. A lot of variables may influence on the triumphant implementation
of lean manufacturing, Alavi (2003), Boyer and Sovilla (2003) and
Womack and Jones (1996) have the opinion that dedication of upper
management is essential. Boyer and Sovilla (2003) stated that
management does not succeed to hold the implementation of lean
practices may disrupt the endeavor intentionally or unintentionally.
Management at top level should express dedication and leadership. It
should also pay attention to build curiosity in the application of lean
practices and should correspond the modification to every person inside
the organization (Boyer and Sovilla, 2003).
Less investment by top management in the implementation of lean
production may also influence the success of application in less
perceptible conducts. If workers think that their officers do not value
their endeavors, disappointment may prevail and endeavors of lean
production will be unsuccessful. Although it has been frequently desired
to make alteration from lower level in factory, it is vital to drive a
conversion to lean production by management team (Boyer and Sovilla,
2003). In an organization, all relations between customers and suppliers
should have a straight link. There should be a comprehensible technique
for communicating reactions to dilemmas (Spear and Bowen, 1999).
Managers have to avert resources and time from core goals of
organization which influences the effectiveness and efficiency of public
organizations. It is especially crucial in the present economic climate. In
this scenario, switching off has created negative effects e.g. wastage of
institutional memory, increase in work accumulation, and lack of ability
to refill the vacant post in the organization (GAO, 2000). In addition,
high rate of switching off of employees influences the spirits of the
organization (Whitehead, 2006) so it should be handled.It is the
responsibility of quality managers to set tasks and coordinate employees
so quality managers impact turnover (Griffeth et al., 2000). Managers
decide the extent of self-determination employees have. Managers can
supervise employees or furnish them competency to perform their job.
Ingersoll (2001) stated that the methods used by managers to guide
employees are important. The ordering and harmonization of tasks
influences the magnitude of work unit. Work unit can be defined as the
size of employees‟ recent work community. This affects an employee‟s

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choice of turnover (Brill and McCartney, 2008). The turnover costs have
been calculated approximately at 50 to 100% of a worker‟s annual
remuneration (Hom and Griffeth,1995).
This expenditure would be greater if high value workers or high
performers leave the job. The reason behind is that high performers are
hard to replace. Few research studies have investigated the effect of
human resource (HR) practices on workers‟ intention to turnover
(Guchait and Cho, 2010). Most of studies have scrutinized the impact of
individual HR practices on intention of workers to quit the job (e.g.
Kuvaas and Dysvik, 2010). Recently, many researchers e.g. Kehoe and
Wright (2013) have investigated the impact of a system of human
resource practices on workers‟ intention to leave the job.
Furthermore, existing research work has demonstrated that organization
level measures human resource management systems has positive link
with performance of organization (Arthur, 1994). For the reason that 1st
set of survey-based statistical research of HRM and firm performance
became launched inside the Nineties, the escalate of human resource
management studies has tried to demonstrate that a full set of well-
defined, at the same time reinforcing human resource practices results in
higher firm overall performance (Arthur, 1994). Specifically, they
contend that so referred to as HPWS in strategic human resource
management can increase performance via improving worker
understanding, competence, abilities, commitment, skills and
productivity (Guthrie, & Wright, 2005).
HPWS just as a set of distinct however interrelated, at the same time
reinforcing human resource management rules and practices, in
preference to outlying individual human resource management practices.
These it's miles stated, intention to develop, choose, keep and encourage
a body of workers to gain advanced intermediate indicators of firm
overall performance (Huselid, 1995). For instance, it is hard to know
when, or by way of whom, human resource management approaches are
delivered (Guest, 2011). For instance, it is hard to know when, or by way
of whom, human resource management approaches are launched (Guest,
2011). A few empirical studies have attempted to shed extra light on this
issue, however till now it has imparted mixed results. As an instance, a
few researches have reported a big simultaneous and longitudinal
interrelationship among human resource management practices and
overall performance signs ( Sheehan, 2014;). Others research establish
that at the beginning human resource management leads in higher firm
performance but this hyperlink disappears once beyond performance is
managed, suggesting that beyond performance is a mile powerful

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predictor of present day overall performance and beat any effect of

human resource management(Guest et al., 2003).
After reviewing sixty-eight empirical research, Wright,
Gardner, Moynihan, and Allen (2005) compile four sorts of studies
layout amongst empirical researches assessing the interrelationship
among numerous human resource practices and overall performance:
predictive, post-predictive, „retrospective‟ and „contemporaneous‟
research methods. The “post-predictive” research layout is through a way
the maximum general layout within the Human resource management-
overall performance area. On this detail, Human resource management
practices are calculated after the firm performance cycle (see Black &
Lynch, 2001). In “retrospective” studies, survey members are asked to
take into account human resource practices that occurred previous to the
performance cycle.
In “predictive” research, the term to which human resource management
practices appraised at one factor in time can have an impact on firm
performance at a later factor in time may be appraised. After three years
(also see Youndt, Snell, Dean, & Lepak, 1996), study the same
relationship between HPWS and firm performance. Certainly, scholars of
different disciplines, along with management and firm behavior that can
be apply meta-analysis as a mechanism to collect information and
amalgam them into generalization (Hunter & Schmidt, 2004). A number
of researchers, have followed meta-analyses to have a look at the
connection among High performance work system and organizational
overall performance (Lepak, Hu, & Bear, 2012;).
Conceptual Framework

Research hypotheis
H1: Stress mediates the relationship between job rotation paractices and
perceived organizational performance.

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H2: Stress mediates the relationship between job rotation paractices and
perceived employee performance.
H3: Stress mediates the relationship between selection paractices and
perceived organizational performance.
H4: Stress mediates the relationship between selection paractices and
perceived employee performance.
H5: Stress mediates the relationship between traning paractices and
perceived organizational performance.
H6: Stress mediates the relationship between traning paractices and
perceived employee performance.
H7: Stress mediates the relationship between performance appraisal
paractices and perceived organizational performance.
H8: Stress mediates the relationship between performance appraisal
paractices and perceived employee performance.
H9: Stress mediates the relationship between compensation paractices
and perceived organizational performance.
H10: Stress mediates the relationship between compensation paractices
and perceived employee performance.
H11: Stress mediates the relationship between job involvement
paractices and perceived organizational performance.
H12: Stress mediates the relationship between job involvement
paractices and perceived employee performance.
H13: Stress mediates the relationship between interanl career
opportunity and perceived organizational performance.
H14: Stress mediates the relationship between interanl career
opportunity and perceived employee performance.
H15: Stress mediates the relationship between interanl employeement
security and perceived organizational performance.
H16: Stress mediates the relationship between interanl employeement
security and perceived employee performance.
Material & Methods
Populationand Sample
Data was collected from four different public sector organization, of
which, one was from Federal Govt. i.e NADRA, one from Provincial
organization i.e e-khidmat Markaz Faisalabad and the other two
wereleading Public Limited banks Habbib Bank Limited and Bank AL-
Habbib. Total 300 questionnaires were distributed;managers were
requested to fill the questionnaire from the employees of their
jurisdiction and167 respondents provided their feedback. At average 75
questionnaires weredistributed per organization. About 23percent of the
respondents are female and 77 percent are male. The education of 44
percent is a Master and about 30 percent is graduation and 26 percent

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respondents are intermediate. About 80 percent respondents belong to

Faisalabad city and 20 percent belongs to Jaranwala, ChakJhumra,
Summandri and Faisalabad Sadar and other cities.
Measuring instrument
Five points (1-5) Likert scale (strongly disagree to strongly agree) was
used to test the data in my model. Organization name, gender, age,
marital status, working city, nature of appointment, qualification and
length of work experience were asked from the respondent under
demographic profile.High-performance work system practices were
measured through a questionnaire developed by Takeuchi et al. (2009).
Questions have been asked from the respondents regarding eight High-
performance work practices, i.e Selection Practices, Training Practices,
Performance Appraisal, Compensation Practices, Job Involvement in my
organization, Internal Career Opportunity and Employment Security.Job
stress was measured at the 9-item scale was used by Doreen Sams
(2005). A questionnaire developed by John &Mark (1996) was used to
assess the firm performance, 7items from this questionnaire adopted to
measure the firm performance.Teseema&Soeters, (2006) scale
containing 4 items was used to measure the perceived employee
performance.
Collected data were analyzed by using descriptive and inferential statistic
techniques.Cronbach‟s alpha (coefficients of reliability) against each
variable (independent and dependent variable) was calculated and all the
reliability values were within the acceptable range (>.60). Assurance was
given to the Respondents that questionnaire did not require any name, so
you can be sure of complete privacy of your response and provided data
of all the respondents to be used for analysis to find out the relationship
between Independent,
RESULTS AND DISCUSSION
Demographic Profile of the respondents
Description Frequency Percent
Gender
Male 129 77%
Female 38 23%
Qualification
Intermediate 27 38%
Graduation 67 46%
Master 63 16%
Age (years)
Less Than 30 82 49%
31-35 48 29%
35-40 23 14%
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41-45 10 6%
46-50 2 1%
50 and Above 2 1%
Total Experience
Less Than 3 23 14%
5-Mar 31 19%
10-Jun 58 35%
15-Nov 42 25%
16-20 7 4%
Above 20 6 4%
Nature of Appointment
Regular 114 68%
Contract 53 32%
City of Residence
Faisalabad 143 86%
Other city 24 14%
Marital Status
Married 125 75%
Unmarried 42 25%

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Correlation matrix
Job Performance Job Internal Perceived
Selection Training Compensation Employment Job Firm
Rotation Appraisal Involvement Career Employee
Practices Practices Practices Security Stress Performance
Practices Practices Practices Opportunity Performance
Job Rotation
1
Practices
Selection
.636** 1
Practices
Training **
.488 .609** 1
Practices
Performance
Appraisal .379** .488** .539** 1
Practices
Compensation
.383** .498** .621** .686** 1
Practices
Job
Involvement .528** .615** .538** .522** .653** 1
Practices
Internal
Career .419** .480** .449** .547** .639** .653** 1
Opportunity
Employment
.465** .498** .425** .384** .520** .524** .573** 1
Security
** ** *
Job Stress .233 .205 .024 -.133 .012 .163 .060 .052 1
Firm
.272** .333** .325** .461** .415** .460** .517** .388** .024 1
Performance
Perceived
Employee .158* .231** .261** .039 .195* .239** .120 .171* .319** .215** 1
Performance
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).

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Model 1 Model 2 Model 1 Model 2

Organizational performance Employee performance
2 2 2
Predictors Beta R Beta R Beta R Beta R2
Job Rotation Practices 0.15 * 0.01 0.08 0.09 0.28 * 0.06 0.29* 0.06
1 Job Stress 0.32 -0.05
Selection practices 0.35 * 0.10 0.36 0.11 0.22 * 0.05 0.16* 0.12
2 Job Stress -0.05 0.31
Training practices 0.28 * 0.10 0.28* 0.09 0.21* 0.06 0.20* 0.16
3 Job Stress 0.02 0.33*
Performance Appraisal 0.37* 0.21 0.38* 0.21 0.03 0 0.06 0.1
4 Job Stress 0.10* 0.35*
Compensation
Practices 0.37* 0.17 0.37* 0.16 0.16* 0.03 0.15* 0.13
5 Job Stress 0.02 0.33*
Job Involvement
Practices 0.46* 0.21 0.47* 0.21 0.22* 0.05 0.17* 0.13
6 Job Stress -0.06 0.30*
Internal Career
Opportunity 0.50* 0.26 0.50* 0.26 0.11 0.01 0.08 0.10
7 Job Stress 0.02 0.33*
employment Security 0.35* 0.15 0.35* 0.14 0.14* 0.02 0.12* 0.11
8 Job Stress 0.01 0.32*
Regression Analysis
Total 16 hypotheses were formulated and analyzed out of these 16
hypotheses 08 have been accepted and 08 have been rejected. Here
relationship of job rotation practices, selection practices,training
practices, performance appraisal,compensation practices, job
involvement practices, internal career opportunity, employment security
and perceived employee performance have been found significant.
Additionally the mediating role of stress has not been proved in the
relationship of HRM practices and organizational performance. Here the
relationship of job rotation practices, selection practices,training
practices, performance appraisal,compensation practices, job
involvement practices, internal career opportunity, employment security
and perceived firm performance have been found insignificant under the
mediating role of stress.
Results of this study are very interesting in nature, some HR
practices have been found positively correlated with stress and at the
same time these practices were positively correlated with the perceived
employee performance. However a very strong fact is also associated
with this finding that the nature of correlation is very small and with few
variables it is very minute which can be ignored.
Here performance appraisal practice was found negatively
correlated with job stress but the significant level was not in acceptable
range. Training, compensation, job involvement, internal career
opportunity and employmentsecurity have been found in insignificant
relationship with the job stress. Here job rotation practice found in
positive relationship with stress implying that employees of public and
private sectors might have resistance to get change their present jobs
description. Similarly selection practices have also been found in positive
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relationship with job stress. Reason might be there that the selection
practices in public and private sectors of Pakistan might have under some
sort of mild or strong political influence.
In addition to this it has been found that the relationship of performance
appraisal with perceived organizational performance was significant but
insignificant with the perceived employee service.On contrary to this
internal career opportunity practices brings positive change in firm
performance as well as in perceived employee performance but
relationship with employee performance is insignificant.
The most interesting result of this study is that in the opinion of
employees working in public and private sectors stress brings in them
positive change in their performance. Here it might be argued that
employees perceived the stress as challenging stressor and tend to
perform better which results in significant performance. This study has
attempted to explore the impact of High performance work System on
employee perceived firm performance, perceived employee performance.
Prime objective of this investigation was to test the possible tendencies
of employees regarding perceived organization performance and
perceived employee performance the perception of High performance
work system working in the NADRA and banking sector of Pakistan. In
order to achieve the objectives of study some research questions were
formulated. Which are given
Conclusions
Keeping in view the above findings it is concluded that HR practices
under the theme of high performance work systemsbrings positive
change in the employee performance as well as organizational
performance. However from the bunch of these HPWS practices the
impact of internal career opportunity was strong as compared to other
practices in relation to the organizational performance. However the
stress created by HPWS practices brings more strong and positive change
in the employee performance, the reason might be there that employees
may have the tendency to take this stress as challenging stressors. These
findings are in continuation to the previous literature that high-
performance work practices improve employees‟ attitude at work and
employees‟ outcomes, among them (Appelbaum et al. 2000; Batt and
Valcour 2003; Yanadori and Van Jaarsveld 2014). Wood (1999) used
universal and contingency approach to investigate the relationship of
HRM practices and organizational performance and identified that HR
practices enhance the firm‟s performance. Huselid (1995) argued that HR
practices are said to be High Performance Work systems if such practices
boost up organizational performance.

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Additionally these findings are also in connection with the previous

literature supported by Kroon, van de Voorde, and van Veldhoven,
(2009) and Godard, (2004) that HPWS has negative consequences also;
one out of such consequences is its relationship with perceived stress.
Stress can be defined as “a particular relationship between the person and
the environment that is appraised by the person as taxing or exceeding
his or her resources and endangering his or her well-being” (Lazarus
&Folkman, 1984). Stress at individual level is an important factor for
organizations in the applicability of HPWS and same are the findings in
this study as it has been found that stress is producing positive change in
the employee performance as well as in organizational performance.
HPWS bring the harmony among workers and organize the work settings
in such a way that it ensures benefits to the both employer and
employees by enhancing the labor efficiency (Cappelli and Neumark
2001), also findings are in connection with the study of Youndt et al.
(1996) thatthere is a positive impact of HRM on organizational
performance on performance in firms. Research conducted by Black and
Lynch (2001) supports the argument that HRM practices have a
significant impact on firm performance.Based on signaling theory,
employees' perceptions of HPWPs are positively related to their work-
related attitudes (Kooij et al., 2009). Studies in the service industry,
convincingly suggest that the presence of HPWPs are positioned as
essential organizational strategies for organizations seeking for enhanced
performance outcome and quality service delivery process.
Recommendations
Keeping in view above lines it can be safely recommend that
organizations must have been vigilant to shaper their best HR practices
to extract their best from the workers. Job rotation practices, selection
practices, training practices, performance appraisal, compensation
practices, job involvement practices, internal career opportunity,
employment security practices must be used to increase the employee as
well as organizational performance. It must be kept in consideration that
the nature of stress being created by HPWS must remained challenging
and should not be converted into hindrance stressors in order to avoid
negative consequences of the HPWS.
Limitations & Future Directions
This study has some general type of limitations and the first limitation of
this study is cross sectional in nature, second the sample size is very
small and data is collected only from few cities. In future other HR
practices must be kept in consideration. Sample size may be enhanced to
get deeper insights. Employees from the other sectors must also be
considered and their opinion must be judged.

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