Do High Performance Work Practices Increase the Organizational Performance of Public Sector Companies? An Investigation of Mediation Mechanism

Abstract

This study examined the mediating role of employee performance, job satisfaction and organizational commitment in the relationship between high performance work practices (HPWP) and organizational performance by using social exchange theory. Smart PLS version 3 is used to analyze the data obtained from 239 management staff of public sector companies. The results revealed that significant relationship exist between HPWP and organizational performance. Moreover it was found that job satisfaction and employee performance positively mediates the hypothesized relationships but organizational commitment contrary to our hypothesis mediates the relationship negatively. This study contributes in the existing literature and provide the mechanism to the management of Public Sector Companies to configure HPWP in order to increase the performance of organization by making staff satisfied and equipping them with relevant knowledge, skills and abilities.