High-Performance Work Systems and Organizational Performance: The Mediating Role of Internal Social Structure

Abstract

This study provides a theoretical framework illustrating how the internal social structure of the organization can mediate the relationship between high-performance work systems (HPWS) and organizational performance. HPWS positively influence the internal social structure by facilitating bridging network ties, generalized norms of reciprocity, shared mental models, role making, and organizational citizenship behavior. Although HPWS are conceptualized as a system of human resource (HR) practices, each category ofHRpractices has a differential relationship with the mediating variables. HPWS lead to (a) financial performance via administrative efficiency and (b) sustainable performance via flexibility arising from the coordination and exploitation of knowledge resources.