Perceived HRM system strength and affective commitment: The mediating role of Human Relations Climate

Importance and key contribution Since the mid-1990s, strategic human resource management (SHRM) researchers have been searching for evidence of the positive impact of human resource management on firm performance, the so... [ view full abstract ]

Importance and key contribution

Since the mid-1990s, strategic human resource management (SHRM) researchers have been searching for evidence of the positive impact of human resource management on firm performance, the so called 'Holy Grail' of human resource management (Boselie, Dietz, and Boon, 2005). Extensive research has been conducted to find support for the direct link between a bundle of HR practices, often referred to as High Performance Work Systems (HPWS) and firm performance (see Combs et al., 2006). More recently however scholars have suggested that this causal chain is more complex than previously thought (Bowen and Ostroff, 2016; Nishii et al., 2008). In order to better understand the mechanisms through which HPWS influences performance, research has increasingly adopted a more micro-level perspective that emphasises employees’ perceptions of, and reactions to, HR practices (e.g. Kehoe and Wright, 2013; Boxall et al., 2011). Herein, employees perceive and interpret HR practices subjectively, leading to attitudinal and, in turn, behavioural HR outcomes that are finally related to performance outcomes at the organisational level (Wright and Nishii 2006). This paper examines employees’ perceptions of HR practices and their subsequent attitudinal outcomes. Following Bowen and Ostroff (2004, 2016) we focus on HRM system strength (characterised by high distinctiveness, consistency and consensus) and its relationship to affective commitment, via a Human Relations climate. We focus on affective commitment as it is said to predict critical employee behaviour, such as discretionary effort (Purcell et al., 2003) and organisational citizenship behaviour (e.g. Mowday et al., 1979). This is accompanied by intuitive acceptance of the link between the strength of the HR system and a Human Relations climate (Patterson et al., 2005). We also extend research further by focusing on the key features of an HRM system that creates a human relations climate and examine the mediating effect of climate on the HRM system strength-affective commitment relationship.

Theoretical base and hypotheses
Until recently, the majority of research in the field of HRM has concentrated on content-oriented HR assessments. Recent theoretical developments however (Bowen and Ostroff, 2004; Patterson et al., 2005; Bednall et al., 2014) have changed the focus to the process of the HRM system. This has shifted researchers’ attention in the HRM arena, from what in HRM that potentially affects performance to how HRM functions as a system affect performance. HRM system strength refers to the effectiveness of the HRM system in signalling to employees the kinds of behaviours that are expected and valued by their organisation (Bowen and Ostroff, 2004). Bowen and Ostroff (2004) based their work on Kelley’s (1973) covariation model of attribution, defining a “strong” HRM system by three features: (1) distinctiveness of HR practices (i.e. they are visible, understandable, legitimate and relevant to employees goals), (2) consistency of HR practices (i.e. their purpose is presented in the same way and are internally aligned), and (3) consensus about the practices (i.e. there is agreement among policy makers about the need for and purpose of the practices). HR systems have a signalling function that allows employees to form a shared sense of the behaviours that are expected, supported and rewarded by management, thereby promoting employee reactions to HRM that are consistent with organisational goals through motivating employees to adapt desired attitudes and behaviours (Bowen and Ostroff 2004). This approach serves to bring employee perceptions of HRM back into the equation as a key determinant of the likely success of HRM interventions, bridging intent and action. Thus, following Bowen and Ostroff (2004), we hypothesise that:

H1. The more employees perceive HRM systems as being distinctive (H1a), internally consistent (H1b), and achieving consensus between policy makers on HRM practices (H1c), the more employees show affective commitment.

Mediating role of Human Relations Climate
Bowen and Ostroff (2004) proposed that if employees perceived all three features, a strong organisational climate would be created. Work climates have been found to exert an important influence on organisations and the people who work in them (Li et al., 2011; Sanders et al., 2008). Bowen and Ostroff (2004) applied collective constructs like organisational climate and shared mental models to view the relationship between HRM interventions and organisational effectiveness. They theorised that HRM systems affect business performance through eliciting a ‘strong situation’ (Mischel 1977) in which employees share the same ideas, beliefs attitudes, and objectives that reinforces each other’s work effectiveness (Ostroff and Bowen 2000). A strong situation can be characterised as established, having elaborated behavioural controls, being stable and closed from external influences (Sanders et al., 2008). The human relations climate dovetails neatly into the space provided by the black box of the HRM performance thesis. Based on the human relations school of thought (McGregor, 1960), human relations climate focuses on the wellbeing, development and commitment of employees with emphasis on an internal focus (employees) (Patterson et al., 2005). Thus, we hypothesise that:

H2. Human relations climate is positively related to affective commitment.

Bowen and Ostroff (2004, p. 204) propose organisational climate as a mediator in the relationship between HRM system strength and organisational performance. In this instance, we are focusing on a facet specific climate of a human relations climate (Patterson et al., 2005). Building on the proximal- distal outcomes thesis (Dyer and Reeves, 1995) we attempt to illuminate the black box by focusing on the outcomes within a realistic proximity to HR influence (Edgar and Geare, 2005) namely; human relations climate and subsequently affective commitment. In essence, a human relation climate potentially narrows the proximity between HR activities and attitudes and behaviors Thus, we hypothesise that:

H3.Human relations climate mediates the relationship between strength of HRM systems (distinctiveness, consistency and consensus) and affective commitment.

Methodology
Data were collected from employees across 9 companies from five industry groups in Malaysia in 2014. The industry groups chosen reflect the main economic activities in Malaysia i.e. research and education, logistics, manufacturing and Government. Having obtained company buy in from participating organisations, surveys were distributed in hard copy to a 10 percent representative sample in each organisation totalling 2069 surveys. The surveys were administered to the largest employment group within each organisation i.e. shop floor employees. The surveys received prior endorsement from the HR Manager/ Director before distribution and each organisation provided a specific individual to assist with the distribution and follow up. 94 responses were eliminated due to excessive missing data, and therefore, the final sample size for testing was 585 representing a 28.8 percent usable response rate. Over half of the respondents were male (57 percent); 71 percent had a higher level of education beyond secondary school; and 55.9 percent were aged 31 years or more. 47.1 percent of the sample had worked in the organisation for 5 years or more.

Measures
Unless otherwise noted, each measure required a response on a 5-point Likert response scale ranging from 1 (strongly disagree) to 5 (strongly agree).
HRM system strength was measured by an adapted 10-item scale developed by Delmotte et al. (2012). This scale identified three components: distinctiveness, consistency and consensus.
Affective commitment was measured using an 8-item scale developed by Meyer and Allen (1991).
To measure organisational climate we drew on the work of Patterson et al. (2005). For this study we identified Human Relations Climate as having proximity to both HR activities and attitudinal outcomes. Human Relations Climate measured (1) Autonomy, (2) Supervisory Support, (3) Training and (4) Welfare using 18 items.
Controls variables: To control for employee characteristics, we include age in years, gender, level of education, tenure, and finally industry sector.

Implications
This paper represents an ongoing project examining employee perceptions of HRM system strength. It offers the potential for a number of insights. Notably the paper draws on Bowen and Ostroff’s leading work to further a process based understanding of how HRM operates. This is furthered by our presentation of human relations climate as a prospective mediator in the HRM strength-affective commitment relationship. Finally, HRM studies still remain biased in terms of ‘traditional’ research, privileging managerial respondents and western research sites (Batt and Banerjee, 2012). This research takes employee perceptions as the basis to understand HRM, and does so in a Malaysian context where, for example, cultural power distance (Hofstede, 2016), might render the impact of HRM system strength all the more significant if effective.

HRM system strength, organisational climate, affective commitment [ view full abstract ]

HRM system strength, organisational climate, affective commitment