Performance at the cost of well-being? Testing the multi-level effects of HR practices on organisational performance via employee experiences and well-being

Abstract

Purpose

While the potential for HR practices (HRPs) to improve organisational performance is well-established, the mechanisms by which this occurs are complex. Individual HRPs may affect organisational performance either by mutual gains (improving both organisational performance and employee well-being) or by conflicting outcomes (organisational performance is improved at the expense of employee well-being). Models which combine HRPs may mask these differences and this study therefore tests pathways for four individual HRPs.

Design/methodology/approach

HRPs (employee involvement, pay, performance management and training) were hypothesised to influence organisational performance directly and indirectly via employee experiences of work (communication, autonomy) and employee well-being. The study used a large secondary dataset, the UK Workplace Employee Relations Survey 2011, to test these relationships in a multi-level model.

Findings

Employee experiences of work strongly predicted well-being. In addition, three different pathways from HRP to organisational performance were identified. Pay showed indirect negative effects, involvement had direct positive effects and performance management had a mixture of both positive direct and negative indirect effects on performance.

Originality/value

Using a disaggregated analysis of HRP and demonstrating their differing effects, this study questions the feasibility of a universal model of HRP effects. By using multi-level modelling (MLM), the study develops understanding of employee perspectives and integrates these into organisational-level models, demonstrating that performance effects are partially mediated by both employee experiences of work and employee well-being. Finally, the study highlights the complexity of performance effects achieved via both employee benefits and an intensification of employee experiences.

Citation

Sutton, A. and Atkinson, C. (2023), "Performance at the cost of well-being? Testing the multi-level effects of HR practices on organisational performance via employee experiences and well-being", Evidence-based HRM, Vol. 11 No. 4, pp. 675-694. https://doi.org/10.1108/EBHRM-12-2022-0299