Understanding High Performance Work Systems-Firm Performance Linkages: A Literature Review

Abstract

People are our most important asset and the Human Resource Management (HRM) is an essential function in organizations that affects the quality of Organizational Performance (OP). Most of the high performance companies such as Apple, Toyota, General Electric, Singapore Airlines and Google have proved that management systems that encourage commitment and competence of people achieve greater productivity. Over the past few years, much of the debate about the contribution of HRM to OP has been wrapped up around the concept of High Performance Work Systems (HPWS). In recent years, a number of studies have attempted to examine the processes that explain the impact of HPWS on OP. Based on research evidence to date, it is clear that HPWS are one of the important components that can help an organization to achieve greater OP. This conceptual paper explores the research findings on the black-box relationship between HPWS and OP. The paper may be valuable to those who are interested in understanding the phenomenon of HPWS-firm performance linkages for research purposes.