High Performance Work System and Organizational Performance: A Moderated-Mediation Organizational Level Study of Public Enterprises In Ethiopia
No Thumbnail Available
Date
2026-02-01
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
This research examines the relationship between High Performance Work System
(HPWS) and organizational performance in public enterprises in Ethiopia. The study
uses cross-sectional quantitative survey research strategy. The organization is the unit of
analysis of the study while the units of observation are top, middle, and lower level
managers. The study employs stratified random sampling, and covers nine public
enterprises by collecting data from managers using self-administered structured
questionnaire. After assembling the data records of the study participants, data screening
is conducted to make sure there are no errors, outliers, excessive missing data, and
respondent misconduct. Then, the dataset is further examined to see if it fulfills the
assumptions that underlie multivariate analysis. Next, measurement model analysis is
performed to ensure the validity and reliability of the measurement scales. Afterwards,
Structural Equation Modeling (SEM) technique is used to perform the data analysis of
the study. The findings of the research corroborate the hypotheses that investing in
HPWS has a significant positive association with the HR outcome, operational outcome,
and financial performance of the public enterprises. In addition, operational outcome has
a positive and significant complementary partial mediation role in the HPWS-financial
performance relationship of the enterprises. However, internal fit and external fit do not
have significant moderating effects in the direct and indirect relationship between and
among the study constructs. As the findings of the research indicate a significant direct
and mediating relationship between the HPWS and organizational performance of the
public enterprises, the organizations would do well if they continue to emphasis on how
they manage the human side of the enterprises. Given the absence of evidence for the
direct and indirect moderating effects of internal fit and external fit, it is important for
the enterprises to focus more on strengthening the main effects of the HPWS practices
than attempting to ensure the existence of internal fit among the HPWS practices or
external fit between the HPWS practices and the business strategies of the enterprises.
The study recommends future researchers to use a longitudinal research design to collect
data on HPWS and organizational performance to conclusively understand the nature of
relationship and causality between the constructs.
Key words
HPWS, HR outcome, operational outcome, financial performance, internal fit, external
fit, public enterprise, Ethiopia