High-Perfomance Work Systems and Organizaitonal Performance: The Role of Societal Culture

This paper assesses whether societal culture affects the relationship between human resource management practices and organizational performance. Drawing on matched employer-employee data from 387 organizations and 7,187 employees in 14 countries, the findings show a positive relationship between high-performance work systems (HPWS) and organizational performance across societal cultures. This relationship was not moderated by three dimensions of societal culture (power distance, in-group collectivism, and institutional collectivism) as proposed by contingency models of culture fit. However, further examination of three dimensions of human resource systems (skill-enhancing, motivation-enhancing, and opportunity-enhancing practices) revealed that opportunity-enhancing practices appear less effective in high power distance cultures. The findings provide general support for the universalistic ‘best practice’ perspective with regard to the positive relationship between HPWS and organizational performance, tempered by an appreciation of the limitations to opportunity-enhancing practices in high power distance cultures.