The Moderating Role of Climate For Creativity

The International Journal of Human Resource
Management
ISSN: 0958-5192 (Print) 1466-4399 (Online) Journal homepage: http://www.tandfonline.com/loi/rijh20
High-performance human resource practices

and firm performance: the mediating role of
employees’ competencies and the moderating role
of climate for creativity
Emmy van Esch, Li Qun Wei & Flora F. T. Chiang
To cite this article: Emmy van Esch, Li Qun Wei & Flora F. T. Chiang (2016): High-performance
human resource practices and firm performance: the mediating role of employees’ competencies
and the moderating role of climate for creativity, The International Journal of Human Resource
Management, DOI: 10.1080/09585192.2016.1206031
To link to this article: https://doi.org/10.1080/09585192.2016.1206031
Published online: 08 Jul 2016.
Submit your article to this journal
Article views: 557
View related articles
View Crossmark data
Citing articles: 1 View citing articles
Full Terms & Conditions of access and use can be found at

http://www.tandfonline.com/action/journalInformation?journalCode=rijh20
The International Journal of Human Resource Management, 2016
http://dx.doi.org/10.1080/09585192.2016.1206031
High-performance human resource practices and

firm performance: the mediating role of employees’
competencies and the moderating role of climate for
creativity
Emmy van Esch, Li Qun Wei and Flora F. T. Chiang
Department of Management, Hong Kong Baptist University, Kowloon Tong, Hong Kong
ABSTRACT KEYWORDS
Drawing on the resource- and competency-based view, this High-performance HR
paper examines the relationship between high-performance practices; firm performance;
human resource (HR) practices and firm performance. employee competencies;
Using a sample of 189 firms in mainland China, a positive climate for creativity
relationship between high-performance HR practices and
firm performance was found that was partially mediated by
employees’ competencies. We also found the organisational
climate for creativity to strengthen such relationship. The
implications and future directions of these findings are
discussed.
Introduction
The strategic role of high-performance human resource (HR) practices has received
considerable attention in the management literature, focusing especially on their
effects on individual (e.g. Ang, Bartram, McNeil, Leggat, & Stanton, 2013; Chang
& Chen, 2011; Gong, Law, Chang, & Xin, 2009; Wood & de Menezes, 2011; Wood,
van Veldhoven, Croon, & de Menezes, 2012) and organisational outcomes (e.g.
Lertxundi & Landeta, 2011; Neal, West, & Patterson, 2005; Shih, Chiang, & Hsu,
2006; Sun, Aryee, & Law, 2007). Although their impact on firm performance has
been widely examined, results are weak and inconsistent (Fleetwood & Hesketh,
2006, 2008; Hesketh & Fleetwood, 2006; Paauwe, 2009; Wall & Wood, 2005).
While the majority of studies demonstrate their positive effects on performance
(e.g. Arthur, 1994; Bae & Lawler, 2000; Guthrie, 2001), others show the opposite
(Wright, McCormick, Sherman, & McMahan, 1999) or fail to find any significant
relationships (e.g. Cappelli & Neumark, 2001; Guest, Michie, Conway, & Sheehan,
2003; Richard & Johnson, 2001). Inconclusive findings suggest a need to develop
CONTACT Flora F. T. Chiang fchiang@hkbu.edu.hk

© 2016 Informa UK Limited, trading as Taylor & Francis Group
2 E. van Esch et al.
a deeper understanding of how high-performance HR practices relate to firm

performance. This study extends previous studies by (1) focusing on a mediating
factor (i.e. employee competencies) which links high-performance HR practices
to firm performance and (2) by exploring the contextual factor (i.e. organisational
climate for creativity) which may affect the impacts of high-performance HR
practices on firm performance.
More specifically, we propose that employees’ competencies acquired, selected,
trained and developed from high-performance HR practices are the proximal
antecedent to firm performance. Although researchers have recently begun to
incorporate human capital constructs to unveil the black box of the relationship
between high-performance HR practices and firm performance (e.g. Jiang, Lepak,
Hu, & Baer, 2012; Takeuchi, Lepak, Wang, & Takeuchi, 2007; Yang & Lin, 2009),
their focus is mainly on the broader and general dimensions of human capital (e.g.
education level) (Jiang, Lepak et al., 2012). However, according to resource-based
view (RBV) of the firm, not all human capital are strategic resources (Barney, 1991;
Dencker, Gruber, & Shah, 2009). Rather, the specific competencies developed by
firms to help employees to meet their job-specific demands (Salvato & Rerup,
2011) are argued to be more important source of competitive advantage (Barney,
1991). Moreover, human capital can be general (e.g. education) or specific (e.g.
competencies) (Becker, 1964), with the latter more strongly related to performance
(e.g. Levenson, van der Stede, & Cohen, 2006.
Our understanding of the relationship between high-performance HR practices
and firm performance will also benefit from the identification of contextual factors
that may strengthen such relationship (Jiang, Lepak et al., 2012; Wall & Wood,
2005). We further argue that the effectiveness of high-performance HR practices
can be strengthened by a positive climate for creativity. Taken a contingency per-
spective (Aragón-Correa & Sharma, 2003; Datta, Guthrie, & Wright, 2005; Lu,
Chen, Huang, & Chien, 2015; Martin-Tapia, Aragón-Correa, & Guthrie, 2009),
we suggest that a positive climate for creativity may create a necessary condition
to strengthen the effects of high-performance HR practices on the development of
employees’ competencies towards achieving firm performance (Mafabi, Munene,
& Ahiauzu, 2013).
This study offers a number of important contributions to the literature.
Incorporating high-performance HR practices within a competency-based the-
ory framework is generative in terms of helping us to understand the underlying
mechanism (employees’ competencies) through which high-performance HR
practices affect firm performance. By examining employee competencies as a
mediator, we contribute to the strategic human resource management (SHRM)
literature in two important ways. First, given much of the current evidence on
employee competencies stems from consultancy work (De Vos, de Hauw, &
Willemse, 2015), we fill this gap by empirically demonstrating evidence that
high-performance HR practices contribute to firm performance by leveraging
The International Journal of Human Resource Management 3
High-performance Employees’ Firm

HR practices Competencies Performance
Climate for
Creativity
Figure 1. Conceptual model.
employees’ various competencies. Second, prior studies using competency view

have mainly focused on single HR practice, such as training (Lai & Kapstad, 2009;
Nybø, 2004). However, according to the RBV, it is the use of HR bundles rather
than single HR practice that contributes to organisational performance (Barney,
1986). Such claim is further supported by empirical research (Combs, Liu, Hall, &
Ketchen, 2006; De Vos et al., 2015) that high-performance HR practices, defined
as a combination of HR practices (Sun et al., 2007), are found to have a stronger
effect on firm performance than any single practice alone. Finally, in response to
calls for more high-performance HR practices research in non-Western contexts
(Fan et al., 2014; Shih, Chiang, & Hsu, 2013; Zhang, Zhu, Dowling, & Bartram,
2013), this study examines high-performance HR practices in China to extend
the generalisability and applicability of Western theories to the Asian context.
Our conceptual model is illustrated in Figure 1.
Theory and hypotheses development

Employees’ competencies and firm performance
The RBV explains variations in firm performance by variations in firms’ HRs and
capabilities (Hitt, Biermant, Shimizu, & Kochhar, 2001). Human capital attrib-
utes have been argued to be a critical resource of firm performance (Hatch &
Dyer, 2004; Hitt et al., 2001) because firms that are able to generate firm-specific,
valuable and unique expertise, and competencies are thought to be in a superior
position that enables them to outperform their rivals and succeed in a dynamic
business environment (Grant, 1996; Janssen, van de Vliert, & West, 2004). One
way to generate firm-specific human capital is the internal development of employ-
ees’ competencies (Lepak & Snell, 2002; Wernerfelt, 1984). Employees who have
developed and possess a wide spectrum of competencies, including technical,
behavioural and business skills and knowledge, are better able to meet their job
demands both internally and externally (Bassellier & Benbasat, 2004; Fink &
Neumann, 2007).
High-performance HR practices, employees’ competencies and firm

performance
High-performance HR practices are the primary means by which firms influence

and shape the skills, knowledge and behaviour of their employees to achieve
organisational goals (Collins & Clark, 2003; De Saá-Pérez & García-Falcón,
2002). High-performance HR practices are also interchangeably referred to as
high commitment or high involvement HR practices (Chang, Jia, Takeuchi, &
Cai, 2014; Chiang, Hsu, & Shih, 2014). In this study, we examine the interme-
diate outcomes through which high-performance HR practices influence firm
performance. Specifically, we propose that employees’ competencies developed
from high-performance HR practices enable organisations to achieve and enhance
their performance.
We take a configurational perspective, an approach similar to horizontal fit
(Green, Wu, Whitten, & Medlin, 2006). The configurational perspective suggests
that it is the overall configuration of a set of internally aligned HR practices that
impact organisational outcomes and therefore HR practices should not be stud-
ied in isolation (Colakoglu, Hong, & Lepak, 2010). Specifically, we propose that
employees’ competencies are developed through the effects of high-performance
HR practices. This is in line with human capital theorists, who suggest that
organisations can increase their human capital by the implementation of high-
performance HR practices, such as recruiting new employees with high levels of
knowledge and skill from the external labour market or internally developing the
knowledge and skills of their current employees (Youndt & Snell, 2004). In this
study, we examine high-performance HR practices as a set or bundle of internally
consistent human resource management (HRM) practices related to the acquisi-
tion and development of competencies, including selective staffing, training and
development, rewards, performance appraisal, and self-managing teams (Neal
et al., 2005; Wright & Nishii, 2006). Selective staffing helps to recruit and select
employees with the required skills and competencies that are instrumental to a
firm’s strategy (Yang & Lin, 2009). Companies can determine the competency
criteria of their prospective employees during the selection process. Acquiring
employees with appropriate competencies increases the breadth and depth of the
knowledge and competencies essential to the success of the firm (Yli-Renko, Autio,
& Sapienza, 2001). Staffing from both inside and outside an organisation provides
opportunities for the firm to modify and recombine its current knowledge and
to add new knowledge to create new organisational knowledge stock (Nonaka &
Takeuchi, 1995). A comprehensive selection and hiring procedure characterised
by extensive and intensive searching, careful screening and rigorous interviews,
should therefore allow the firm to identify and select the most competent candi-
dates with the required skills and competencies (Jiang, Lepak et al., 2012).
In addition to staffing practices, to sustain high-performance, firms also need
to improve and upgrade the level of employee competencies through training
and development practices (Singh, 2003). When employees are equipped with
appropriate and extensive training and development, they are better able to acquire
a wide range of competencies that broaden their horizons, integrate knowledge
from diverse sources and more readily apply their acquired skills and knowledge
to their jobs (De Saá-Pérez & García-Falcón, 2002; Leede, de Looise, & Alders,
2002). Additionally, employee development helps to shape and direct employees’
behaviours and attitudes to be in line with organisational goals. Enhanced com-
petencies enable employees to promote knowledge diffusion and information
sharing (Argote, McEvily, & Reagans, 2003) and ultimately meet the organisational
demands that support firm strategies (Laursen & Foss, 2003; Scarbrough, 2003).
Especially in a knowledge economy, internal training and the development of
competencies are essential to increasing the specificity of human capital (Lepak
& Snell, 2002).
An effective reward system is another important vehicle to attract, motivate,
retain and develop employees’ competencies (Singh, 2003). The functions of the
reward system are fourfold. First, fair and competitive compensation that meet
or exceed market equity can attract and retain competent individuals (Starkey,
Tempest, & Mckinlay, 2004; Youndt & Snell, 2004). Second, rewards provide moti-
vation for the extra effort needed to develop or update one’s competencies. When
employees are rewarded, intrinsically and extrinsically motivated, and reinforced
to learn and continuously improve, they are more likely to actively acquire rele-
vant and specific knowledge, and to leverage their knowledge and competencies
to support firm performance (Bowen & Ostroff, 2004; Evans & Davis, 2005). In
addition, effective reward practices (e.g. team rewards) foster high levels of inter-
action and team cooperation (Chiang & Birtch, 2012), which are instrumental in
facilitating extensive knowledge sharing. Third, when valued rewards are aligned
with clear performance goals, employees will exert a sustained, focused cogni-
tive and behavioural effort towards the attainment of those objectives (Latham
& Pinder, 2005; Rynes, Gehart, & Parks, 2005). For example, Messersmith and
Guthrie (2010) suggest that a proper incentive compensation system is positively
associated with intrapreneurial behaviour and ultimately affects a firm’s bottom
line. Fourth, when employees are evaluated and rewarded against a predetermined
set of performance criteria (e.g. information sharing and communication), these
criteria signal and communicate the firm performance priorities (Chiang & Birtch,
2011). Desirable behaviour is motivated, which improves firm performance.
Similarly, an effective performance appraisal system also fosters the devel-
opment of employee competencies. A developmental appraisal system helps to
identify employees’ strengths and weaknesses, assess and guide training and
development needs to increase the skills and competencies required for desir-
able behaviour (Cardy & Dobbins, 1994; Chiang & Birtch, 2010). Performance
feedback communicates organisational expectation and provides employees direc-
tion of how to improve their competencies to meet with the needs of the firm
(Shipton, West, Dawson, Birdi, & Patterson, 2006; Yang & Lin, 2009). Scholars
also argue that developmental appraisal practices are conducive to creativity and
the development of new competencies (Egan, 2005) because in order to advance
their performance, employees are motivated to seek new and creative approaches
to their work activities (Jiang, Wang, & Zhao, 2012).
Finally, the use of self-managing teams is another important vehicle to develop
employees’ competencies. Self-managing teams are autonomous groups of employ-
ees whose members are accountable for their own work activities with reduced
or no supervision (Kirkman, Rosen, Tesluk, & Gibson, 2004; Wageman, 1997).
When team members are empowered and given the autonomy and flexibility, they
are likely to be more motivated and take full responsibility to find new ways and
develop new skills to respond to challenges. In addition, when there is a high level
of interaction among team members, the cross-fertilisation of perspectives not only
fosters knowledge sharing among team members but also enhances interpersonal
competencies such as communication, empathy, and coaching. Hence, self-man-
aged teams are likely to enhance intellectual and creative competencies as well
as interpersonal social competencies (Jiang, Lepak et al., 2012; Wageman, 1997).
In the light of the above-stated influences, firm performance is likely to be
enhanced by high-performance HR practices through their combined effects
on the acquisition and development of employees’ competencies (Datta et al.,
2005). We therefore expect that employees’ competencies mediate the relation-
ship between high-performance HR practices and firm performance. Because
prior studies demonstrate that other factors, such as employee attitudes (Fulmer,
Gerhart, & Scott, 2003; Gong et al., 2009; Takeuchi, Chen, & Lepak, 2009) and
employee behaviour (Kehoe & Wright, 2013; Sun et al., 2007) also mediate this
relationship, we propose a partial mediation.
H1: The positive effect of high-performance HR practices on firm performance is par-
tially mediated by employees’ competencies.
Moderating role of the climate for creativity
From a contingency perspective, the role of moderators should be considered

to fully understand the effect of high-performance HR practices on competency
development (Colakoglu et al., 2010). As the competency-based perspective
suggests that creating a favourable climate is important to support employee
development (Hall, 1992; Rodriguez, Patel, Bright, Gregory, & Gowing, 2002),
we posit that a climate for creativity acts as a situational enhancer and further
strengthens the positive influence of high-performance HR practices on compe-
tency development. Climate refers to the perceptions that employees hold about
their organisation’s practices, policies and procedures (James, James, & Ashe, 1990;
Reichers & Schneider, 1990). Job activities take place within organisational con-
texts. Values in this context (climate) can therefore shape employee perceptions
and shared beliefs regarding the values and norms that govern their behaviour
(Ashkanasy, Wilderom, & Peterson, 2000). Climate provides a strategic focus and
serves as a frame of reference for employees. It guides their normative and adap-
tive work behaviour by providing salient informational cues and a motivational
basis regarding expected behaviour (Salancik & Pfeffer, 1978; Schneider, White,
& Paul, 1998). A positive climate is thought to enhance employees’ motivation
and abilities, and the types of behaviour desired by an organisation (Brown &
Leigh, 1996; Neal & Griffin, 1999). Climate perceptions determine how individuals
behave collectively by influencing their perceptions and feelings about certain
aspects of their work environment.
In this study, we focus on climate for creativity, defined as work environ-
ment that supports and facilitates innovative activities and continuous learning
(Amabile, Conti, Coon, Lazenby, & Herron, 1996; Schumpeter, 1934). We pro-
pose that the climate for creativity has a moderating effect on the relationship
between high-performance HR practices and employees′ competencies. From a
sense-making perspective, employees sense and seek guidelines from their envi-
ronment to interpret events, develop appropriate attitudes and understand the
expectations of behaviour and potential outcomes of behaviour (Drazin, Glynn,
& Kazanjian, 1999). Employees use this information to formulate expectancies
and instrumentalities (James, Hartman, Stebbins, & Jones, 1977) and respond to
these expectations by regulating their own effort and behaviour (Porter & Lawler,
1968). The climate for creativity includes the encouragement of idea generation,
autonomy, freedom and availability of resources (Amabile et al., 1996). It provides
an important environmental and social support to foster the desired employee
behaviour in an organisation (Hofmann, Morgeson, & Gerras, 2003; O’Reilly &
Chatman, 1996; Scott & Bruce, 1994).
If employees value and share strong perceptions about a climate for creativ-
ity, they are more likely to embrace such values, as encouraging the acquisition
of new skills and continuous improvement complements and supports effective
implementation of high-performance HR practices. That is, when organisations
promote a climate for creativity, employees are more willing to try out unfamiliar
situations that foster greater access to new experiences and perspectives, are more
open to new knowledge and ideas and are more motivated to absorb and combine
new information and to seek innovative, alternative ways to enhance their per-
formance (Shalley & Gilson, 2004). Internal fit researchers (Baird & Meshoulam,
1988; MacDuffie, 1995) have argued that high-performance HR practices are
more likely to be effective if such practices are aligned with and reinforced by
a favourable organisational climate (Neal et al., 2005; Smith-Crowe, Burke, &
Landis, 2003; Verburg, den Hartog, & Koopman, 2007). Organisations benefit
more from high-performance HR practices that enhance employees’ competencies
in favourable climates (Neal et al., 2005). Hence, we propose that the climate for
creativity intensifies the effects of high-performance HR practices on the devel-
opment of employees’ competencies that affect firm performance.
H2: The positive relationship between high-performance HR practices and employees’

competencies is stronger in firms with a positive climate for creativity.
Methods
Data collection and sample
The data for this study were collected through a questionnaire survey of firms in
the manufacturing and service industries in mainland China. To ensure the qual-
ification of the potential respondents, only companies with 20 or more employees
that had existed for more than two years were selected. Smaller and younger firms
were avoided to better generalise our conclusions. Ten trained research assistants
were responsible for contacting the companies and explaining the purpose of the
study. The respondents were assured of the confidentiality of their responses. Four
thousand firms were randomly selected from a database of the firms registered
with the local government and were contacted by our assistants. Of these, 750
companies in 20 provinces agreed to participate in our study. After further com-
municating with the companies’ chief executive officers (CEOs) and obtaining
their approval, we then mailed or personally delivered the questionnaires to these
firms. Responses were received from 576 firms from all 20 provinces, representing
a participation rate of 76.8%.
The questionnaires were mailed or personally delivered to the CEOs and chief
financial officers (CFOs) of each company. We designed different questionnaires
for the CEOs and CFOs, to obtain their perspectives on company information.
The CEOs were asked to provide information on high-performance HR practices,
the corporate climate for creativity and employees’ competencies. The CFOs were
asked about performance indicators. Each respondent was instructed by a cover
letter to complete and return the questionnaire in a pre-addressed envelope.
We delivered 1152 questionnaires in 576 packages. We received 663 completed
questionnaires, 385 from CEOs and 278 from CFOs, representing response rates
of 67% and 48%, respectively. After deleting the incomplete questionnaires and
matching the two sets of questionnaires, we were left with 189 sets of valid ques-
tionnaires, representing a response rate of 32.8%.
The sample of 189 firms was made up of 98 (51.9%) state-owned enterprises,
24 (12.7%) foreign-invested enterprises and 67 (34.4%) private firms. 30.2% were
in light manufacturing, 45.5% in heavy industry and 24.3% in service industries.
The firms had operated for an average of 14.41 years, with a standard deviation
of 8.4 years. The average number of employees was 727.
Measurement
High-performance HR practices
As there is no single agreed upon list of high-performance HR practices (Lertxundi
& Landeta, 2011; Paauwe, Guest, & Wright, 2013; Zhang, Fan, & Zhu, 2014; Zhang
et al., 2013), 16 items related to high-performance HR practices were adapted from

and supported by the literature (Arthur, 1994; Fey & Björkman, 2001; Huselid,
1995; MacDuffie, 1995; Pfeffer, 1994; Sun et al., 2007; Youndt, Snell, Dean, &
Lepak, 1996). The Chinese context was taken into consideration in the item selec-
tion. The items covered the major components of HRM functions which have been
widely used in the literature, including selective staffing, training, performance
appraisal, rewards and self-managed work teams (e.g. Chuang & Liao, 2010; Evans
& Davis, 2005; Foley, Ngo, & Loi, 2012; Jiang & Liu, 2015; Sun et al., 2007). The
CEOs were asked to describe the extent to which their firms used these HR prac-
tices on a five-point Likert scale, ranging from 1 (very low extent) to 5 (very high
extent). A reliability test using Cronbach’s coefficient was conducted. The alpha
value was .87, indicating acceptable reliability of the construct.
Employees’ competencies were measured using 10 items adapted from Fink and
Neumann (2007). Technical competency (specific expertise in technical areas),
behavioural competency (e.g. communication or interpersonal ability) and busi-
ness competency (understanding of business strategy and environment) were
identified. These items were measured on a five-point Likert scale. The CEOs were
asked to assess the competencies of employees in the IT department on a five-point
Likert scale, ranging from 1 (strongly disagree) to 5 (strongly agree). Because
our hypotheses did not consider their differential effects and given the inter-cor-
relations among the subscales (inter-subscale correlations .48, .52, and .65), we
combined them into an overall measure (internal consistency reliability = .85).
Climate for creativity was adapted from scales developed by Amabile et al.
(1996). To fit the Chinese context, 8 of the original 10 items were used to assess
the working environment for creativity. In line with previous research, we captured
CEOs’ perceptions of the organisational climate as CEOs are the dominant strate-
gic core (e.g. Burton, Lauridsen, & Obel, 2004). The CEOs were asked to respond
to the eight statements describing the climate for creativity in their firms on a
five-point Likert scale, ranging from 1 (very low extent) to 5 (very high extent).
Cronbach’s alpha was .82, indicating acceptable reliability of the construct.
Firm performance
This study used a subjective evaluation of firm performance. In China, subjective
financial data are preferred given the low reliability of the objective financial per-
formance disclosed by Chinese firms (e.g. Wei, Liu, Zhang, & Chiu, 2008; Zhou,
Hong, & Liu, 2013). Subjective evaluation has been shown to be highly correlated
to objective figures (Kim & Slocum, 2008; Venkatraman & Ramanujam, 1986; Wall
et al., 2004). Therefore, the perceptual assessments of the CFOs were used to meas-
ure firm performance using the performance indicators of profit, return on assets
(ROA) and research and development (R&D) expenses of the firm in the following
year. The CFOs were asked to indicate their firms’ performance in comparison with
the industry average on a five-point Likert scale, ranging from 1 (much lower than
the industry average) to 5 (much higher than the industry average).
Control variables
Firm age, firm size, region, ownership and industry type were included as con-
trol variables because these variables have been found to be related to climate,
competency and firm performance (e.g. Bae & Lawler, 2000; Huselid, Jackson, &
Schuler, 1997). Firm age was calculated using the year that the survey was con-
ducted (2011) minus the firm’s founding year. Firm size reflected the number of
employees. Location (east, north or south), ownership (state-owned, private or
foreign investment enterprise) and industry type (light or heavy industry) were
also controlled using dummy variables.
Addressing common source bias
Since the CEOs were asked to provide information on high-performance HR

practices, the corporate climate for creativity and employees’ competencies,
there is, and we adopted some methods to limit potential common source var-
iance (Podsakoff, MacKenzie, Lee, & Podsakoff, 2003). Firstly, the respondents
were promised anonymity and the confidentiality of their responses to limit any
apprehension about evaluation and limit socially desirable responding. Secondly,
a couple of filter items were inserted between constructs in the questionnaires to
reduce perceptions of any direct connection between the constructs. Thirdly, we
also used Harman’s (1960) one-factor test to assess common method variance in
this study. The analysis yielded more than one factor with an eigen value greater
than 1, with the first factor accounting for 30.45% of the total variance explained.
According to Harman’s criterion, common method variance did not appear to be
a serious problem in this study.
Data validation and statistical methods

To further test the validity of the latent constructs, we conducted a confirmatory
factor analysis of a three-factor measurement model. Specifically, the analysis
results suggested a good fit between the model and data (χ2/df = 1.477, CFI
(comparative fit index) = .901, IFI (incremental fit index) = .904 and RMSEA
(root mean square error of approximation) = .050). Additionally, as shown in
Table 1, we compared the three-factor measurement model with two- and one-
factor models. Specifically, the one-factor model combines high-performance HR
practices with employees’ competencies and climate. The first two-factor model
combines high-performance HR practices with employees’ competencies. The
second two-factor model combines high-performance HR practices with climate.
And the third two-factor model combines employees’ competencies with climate.
The findings suggest that the three-factor model fit better with the data than the
others. This demonstrated adequate convergent validity and reliability of these
constructs.
Table 1. Measurement model statistic.

Model χ2 d.f. RMSEA CFI IFI
1. Three-factor model 745.814 505 .050 .901 .904
2. Two-factor model 1: 843.117 506 .060 .862 .865
Combine HPHP and EMPC
Two-factor model 2: 866.222 506 .062 .853 .856
Combine HPHP and Climate
Two-factor model 3: 832.420 506 .059 .866 .869
Combine EMPC and Climate
3. One-factor model: 874.095 508 .062 .850 .853
Combine HPHP, EMPC, and Climate
Note. EMPC = Employees’ Competencies; HPHP = High-performance HR practices.
Multiple regression analyses were then performed to test the moderating role
of the climate for creativity and the mediating effect of employees’ competencies.
These results are reported in the next section.
Results
The means, standard deviations and correlations are shown in Table 2. Larger
firms were mostly state-owned enterprises (r = .223, p < .01) and heavy industrial
firms (r = .189, p < .01). High-performance HR practices were positively corre-
lated with two key variables (ITEmpC, r = .505, p < .01; Climate, r = .620, p < .01)
and the three outcome variables (Profit, r = .359, p < .01; ROA, r = .207, p < .01;
R&D, r = .291, p < .01). Both the climate for creativity (Profit, r = .169, p < .05;
ROA, r = .165, p < .05; R&D, r = .273, p < .01) and employees’ competencies (the
correlation coefficients ranged from .204 to .292, p < 0.) were positively correlated
with firm performance.
Table 3 shows the results of the regression analyses. To test the mediation
effect of employees’ competencies, profit, ROA and R&D expenses were entered as
dependent variables. Firm size was positively related to ROA and R&D expenses
(.155 and .223, respectively). The control variables were first entered into the
model. The independent variable was added in the second step, followed by the
mediator variable. In the last model, both the independent and mediator variables
were added to assess whether the coefficient on the independent variable was
significantly reduced by the effect of the mediator.
Models 5 to 8 show the results for profit. After the mediator was added, the
coefficient on the independent variable was significantly reduced from .368 to .268.
As the coefficient on the mediator was still significant, although also reduced (from
.336 to .201), a partial mediating effect is supported. Employees’ competencies are a
potential mediator in the link between high-performance HR practices and profit.
Models 9 to 12 show the similar results obtained for ROA. The explanatory
power of the independent variable dropped significantly from .269 (Model 10)
to .180 (Model 12) when the mediator was added and the mediator remained
significant, although it also reduced from .271 to .180.
12
Table 2. Means, SDs, and correlations among variables.

Mean SD 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Firm size 5.904 1.217 1
E. van Esch et al.
Firm age 14.407 8.425 .412** 1

East region .413 .494 −.081 .032 1
North region .407 .493 .063 .032 −.695** 1
South region .016 .125 −.001 .014 −.106 −.105 1
State-owned firms .524 .500 .233** .283** −.051 .123 .036 1
Private firms .348 .477 −.282** −.242** .028 −.063 −.093 −.766** 1
Light Industry .302 .460 −.111 −.006 .035 −.052 −.083 −.195** .111 1
Heavy Industry .455 .499 .189** .009 .076 −.066 .139 .160* −.103 −.600** 1
High-performance HR 3.420 .598 −.075 −.011 .047 −.127 .066 .052 .001 −.008 −.106 1
practices
Employees’ Competencies 3.278 .625 −.030 .095 .038 −.092 .120 .071 −.069 .051 −.174* .505** 1
Climate 3.630 .575 .030 −.002 −.054 −.019 .027 −.066 .058 −.079 −.034 .620** .293** 1
Profit 3.344 1.083 .028 .046 −.108 .055 −.001 .074 .018 −.081 .073 .359** .292** .169* 1
ROA 3.333 .899 .172* .090 −.036 .088 −.047 −.006 .035 −.026 .075 .207** .204** .165* .521** 1
R&D Expenses 3.397 1.050 .171* .024 −.051 .087 .114 .018 .039 −.073 .100 .291** .248** .273** .571** .569**
**Correlation is significant at the .01 level (2-tailed);
*Correlation is significant at the .05 level (2-tailed).
Table 3. Regression analyses for testing the hypothesized relationships.
Employees’ Competencies Profit ROA R&D
Control
Variables M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12 M13 M14 M15 M16
Firm Size −.032 −.009 −.007 −.004 .001 .018 .012 .020 .155+ .168* .164* .169* .223** .238*** .232** .240**
Firm Age .077 .073 .074 .083 .053 .050 .027 .036 .047 .045 .026 .032 −.067 −.069 −.088 −.080
Region East −.003 .010 .009 .006 −.130 −.120 −.129 −.122 .024 .032 .025 .030 .101 .110 .101 .108
Region North −.103 −.017 −.017 −.010 −.048 .016 −.013 .019 .095 .142 .123 .145 .169 .228* .198+ .230*
Region South .136+ .102 .102 .107 −.019 −.044 −.065 −.065 −.038 −.057 −.075 −.075 .153* .129+ .114 .114
State-owned .090 .004 .001 .012 .185 .121 .155 .120 −.004 −.051 −.029 −.052 .097 .038 .071 .038
Enterprise
Private Firms .001 −.053 −.054 −.043 .180 .140 .179 .151 .092 .063 .092 .073 .186 .150 .186 .158
Light Industry −.096 −.046 −.048 −.047 −.025 .012 .007 .021 .035 .063 .061 .071 −.015 .019 .012 .026
Heavy Industry −.266** −.163* −.163* −.164 .042 .118 .131 .151* .094 .151* .167+ .180+ .035 .105 .110 .129
Independent
Variable
High-perfor- .495*** .506*** .517*** .368*** .268** .269*** .180* .337*** .262**
mance HR
practices
Moderator
Climate for −.017 −.013
Creativity
Two-way Inter-
action
High-perfor- .117+
mance HR
practices ×
Climate
Mediator
Employees’ .336*** .201* .271*** .180* .283*** .150+
Competencies
R2 .081* .311*** .311*** .323*** .033 .160** .137** .188** .049 .117** .116** .139** .079 .185*** .152** .200**
Adjusted R2 .034* .271*** .267*** .276*** −.016 .112** .088*** .136*** .000 .066** .066** .085** .031 .138*** .104*** .150***
The International Journal of Human Resource Management
R2 Change .230*** .000 .012* .127*** .104*** .051** .068*** .068*** .023** .106*** .073*** .048**
Note. N = 189; ***p < .001; **p < .01; *p < .05; +p < .1.
13
Similar results were also found for R&D expenses (Models 13 to 16). High-
performance HR practices were significantly related to R&D expenses (β = .337,
p < .01) (Model 14). When the measure for employees’ competencies was added, the
coefficient on high-performance HR practices dropped to .262 (p < .05) (Model 16).
The measure for employees’ competencies was significantly associated with
all three of the performance outcomes when it was included with the independ-
ent variable of high-performance HR practices. The partial mediating effect of
employees’ competencies is confirmed and Hypothesis 1 is therefore supported.
To test the moderation effect of climate for creativity, employees’ competencies
were entered as dependent variables. Following Baron and Kenny’s (1986) method,
Model 1 contained only the control variables. Firms located in the southern region
(Guangdong, Guangxi and Hunan) demonstrated higher levels of employee com-
petencies than firms located in the northern region (β = .133, p < .05). . In addition,
employee competencies in heavy industries were lower than in light industries
(β = –.266, p < .01).
In the second step, the independent variable of high-performance HR practices
was entered (model 2). The results revealed that high-performance HR practices
were positively and significantly related to the mediator employees’ competencies
(β = .495, p < .001). The climate for creativity as a moderator variable was then
entered the third step (model 3) and the interaction between high-performance HR
practices and the climate for creativity (high-performance HR practices X Climate)
was included in the fourth step (model 4). The effect of climate for creativity alone
was not significant (β = −.017, p > .10), but the interaction term was positively sig-
nificant, though marginal (β = .117, p < .10). The moderating effect of the climate
for creativity is thus supported. A detailed interaction plot was constructed to
better illustrate this moderating effect, shown in Figure 2. The relationship between
Figure 2. Interaction between high-performance HR practices and climate for creativity.

high-performance HR practices and employees’ competencies was stronger in a

more positive climate for creativity, lending support to Hypothesis 2.
We used the PROCESS macro bootstrapping method to test the proposed
moderated mediation effect (Hayes, 2012). Specifically, by setting up 2000 times
resampling, we found that the mediation roles of employees’ competency in the
effects of high-performance HR practices on profit and ROA are statistically mod-
erated by climate for creativity. As shown in Table 4, indirect effects of high-per-
formance HR practices through employees’ competency on profit at low (β = .157,
[.028, .411]), mean (β = .188, [.029, .435]) and high (β = .220, [.036, .486]) levels of
climate for creativity were statistically significant. That is, the mediation effect of
employees’ competency in the relationship between high-performance HR prac-
tices and profit was moderated by climate for creativity. Figure 3 clearly illustrates
the conditional indirect effects.
Similarly, Table 5 showed that the indirect effects of high-performance HR
practices through employees’ competency on ROA at low (β = .117, [.006, .298]),
mean (β = .141, [.004, .330]) and high (β = .165, [.007, .378]) levels of climate for
creativity were statistically significant. Figure 4 clearly illustrates the conditional
indirect effects.
Table 4. Indirect effects of high-performance HR practices (via employees’ competencies) on

profit at Low, mean and high levels of climate for creativity.
Indirect effect se 95% Confidence interval

Simple paths for low climate for creativity .157* .091 [.028, .411]
Simple paths for mean climate for creativity .188* .101 [.029, .435]
Simple paths for high climate for creativity .220* .116 [.036, .486]
Note. N = 92.
***p < .001; **p < .01; *p < .05.
Figure 3. The indirect effect of high-performance HR practices on profit through employees’
competencies at low, medium and high levels of climate for creativity.
Table 5. Indirect effects of high-performance HR practices (via employees’ competencies) on ROA

at low, mean and high levels of climate for creativity.
Indirect effect se 95% Confidence interval
Simple paths for low climate for creativity .117* .077 [.006, .298]
Simple paths for mean climate for creativity .141* .086 [.004, .330]
Simple paths for high climate for creativity .165* .098 [.007, .378]
Note. N = 92.
***p < .001; **p < .01; *p < .05.
Figure 4. The indirect effect of high-performance HR practices on ROA through employees’
competencies at low, medium and high levels of climate for creativity.
Discussion
Drawing on the RBV, this study examines how employees’ competencies mediate
the relationship between high-performance HR practices and firm performance.
As predicted, a partial mediating effect of employees’ competencies on the rela-
tionship between high-performance HR practices and performance was found.
Our results also show that the climate for creativity serves as a moderator in the
relationship between high-performance HR practices and employees’ competen-
cies. In a work context with a positive climate for creativity, employees are more
likely to acquire and develop competencies that are instrumental to achieving
firm performance. These findings are consistent with the view that the organisa-
tional climate establishes a context that supports and facilitates the development of
required competencies and behaviour (Amabile, Conti, Coon, Lazenby, & Herron,
1996; Shalley, Gilson, & Blum, 2009).
Theoretical and practical contributions
The findings of this study have several important implications for both research-
ers and organisations. First, we provide a deeper understanding of how high-
performance HR practices impact firm performance. By identifying employee
competencies as a mediator and organisational climate for creativity as a mod-

erator, we extend previous studies on the high-performance HR practices–firm
performance relationship, which were characterised by weak and inconsistent
results (Fleetwood & Hesketh, 2006, 2008; Hesketh & Fleetwood, 2006; Paauwe,
2009; Wall & Wood, 2005). Our findings suggest that it is not the mere existence
of high-performance HR practices but the competencies developed by high-per-
formance HR practices that enable firms to enhance their performance. These
findings are in line with strategic HR scholars’ view that firm-level HRM practices
are not in and of themselves the source of competitive advantage. Rather, it is the
firm-specific employees’ competencies that are selected, rewarded, motivated and
developed via these practices that enable firms to obtain sustainable advantages
over their competitors (e.g. Datta et al., 2005; Wright & McWilliams, 1994). Hence,
developing employees with high levels of firm-specific technical, behavioural and
business competencies is what enhances a firm’s performance. In support of our
findings, the dynamic RBV theory (Teece, 2007) also asserts that resource deploy-
ment via high-performance HR practices, which emphasises the capability to
bundle, integrate, configure and reconfigure HRs, makes firms succeed in the
face of rapidly changing customer and technological needs (Eisenhardt & Martin,
2000; Makadok, 2001).
Second, our focus on employees’ competencies adds value and extends the
extant literature which focuses primarily on the broader and general dimensions
of human capital (e.g. education, experience). In comparison, we focus on employ-
ees’ competencies as a type of specific firm’s human capital linking high-perfor-
mance HR practices to firm performance. Albeit small, our addition and focus
on employees’ competencies provides a new direction for high-performance HR
practices–organisational performance research (e.g. Wei & Lau, 2010).
Third, our results also confirm that the relationship between high-performance
HR practices and employees’ competencies can be strengthened by a positive
climate for creativity. A work context that is supportive for creativity is impor-
tant for encouraging employees to continuously learn through the acquisition of
new knowledge, skills and competencies. This study therefore provides support
for a contingency perspective in SHRM research that with a positive climate for
creativity, the effects of high-performance HR practices on the development of
employees’ competencies can be enhanced (e.g. Barney, 2001; Martin-Tapia et
al., 2009; Priem & Butler, 2001a,2001b). By demonstrating that the climate for
creativity moderates the high-performance HR practices–organisational compe-
tencies relationship, this study builds on a recent stream of research examining
the RBV from a contingency perspective (e.g. Aragón-Correa & Sharma, 2003;
Datta et al., 2005; Lu et al., 2015; Martin-Tapia et al., 2009).
Finally, this study extends the application of high-performance HR practic-
es–firm performance to a new context (i.e. the transitional economy of China). The
present study demonstrates that in emerging economies, characterised by envi-
ronmental turbulence and uncertainties, the implementation of high-performance
HR practices helps organisations perform better by increasing the levels of their

employees’ competencies.
Our findings also have practical applications. This study helps organisations
to seek ways of increasing the benefits of their high-performance HR practices.
As our findings suggest, given the strategic importance of competencies, organ-
isations should design and establish high-performance HR practices in such a
way to acquire, motivate, develop and enhance their employees’ competencies.
In other words, firms should prioritise and invest their resources to develop-
ing the firm-specific competencies of their core departments or units. Moreover,
viewing the crucial role played by organisational climate in fostering the effects
of high-performance HR practices, organisations should direct their effort to
building a positive climate that enables them to create, accumulate and build high
levels of employees’ competencies because as our results found, high-performance
HR practices coupled with a relevant, strategically focused climate will be most
effective in developing the competencies essential for firm performance. Finally,
the findings of this study provide important insights into the Chinese companies
where the applications of high-performance HR practices may still be at a nascent
stage (Kim, Wright, & Su, 2010; Qiao, Khilji, & Wang, 2009).
Limitations and future research
There are several limitations that warrant attention when interpreting these find-
ings. The cross-sectional nature of the study may limit our inference of causality
among high-performance HR practices, competencies and firm performance.
Future studies should use a carefully designed longitudinal method to confirm the
causal relationships between these variables and to extend our findings. A three-
stage design may be effective, collecting firm-level data before and after the adop-
tion of high-performance HR practices and then collecting performance data after
a certain period. This method will enable to capture the dynamic development
of high-performance HR practices, the evolution of organisational competencies
and the subsequent effects on firm performance.
Although the firm performance data were obtained from different sources, we
collected the independent (high-performance HR practices), mediator (employ-
ees’ competencies) and moderator (climate for creativity) variables from a single
source, the CEOs. Common source bias may be better removed by collecting
information from additional sources, such as employees and HR professionals,
which will help validate the measures and improve the validity and reliability of
the constructs (Datta et al., 2005; Wright, Dunford, & Snell, 2001).
Further, our focus was to examine the impacts of a bundle of HR practices
on the development of employees’ competencies in general, which in turn, affect
firm performance. Future studies could examine in more detail how each type of
competency is developed by individual HR practices.
In addition to climate, other contextual factors, such as leadership, national

culture or organisational structure may also serve as moderators, to interact with
high-performance HR practices to affect competency development.
Financial performance indicators were used in our study. Other outcome var-
iables, such as innovation (which may be important in the context of the climate
for creativity) can be examined in the future. Incorporating the above considera-
tions in future research may offer additional contributions and insights into our
understanding of the high-performance HR practices–performance relationship.
Our findings also show that large firms are significantly different from small firms
in terms of their ownership and performance. Future research can explore the
implications of this difference.
Conclusion
This study advances our understanding of the high-performance HR practic-
es–firm performance relationship. We demonstrated that employees’ competencies
mediated the high-performance HR practices–firm performance link and that a
positive climate for creativity played a crucial role in creating the necessary con-
ditions for high-performance HR practices and the development of employees’
competencies that positively influenced firm performance.
Disclosure statement
No potential conflict of interest was reported by the authors.
References
Amabile, T. M., Conti, R., Coon, H., Lazenby, J., & Herron, M. (1996). Assessing the work
environment for creativity. Academy of Management Journal, 39, 1154–1184.
Ang, S. H., Bartram, T., McNeil, N., Leggat, S. G., & Stanton, P. (2013). The effects of high-
performance work systems on hospital employees’ work attitudes and intention to leave: A
multi-level and occupational group analysis. The International Journal of Human Resource
Management, 24, 3086–3114.
Aragón-Correa, J. A., & Sharma, S. (2003). A contingent resource-based view of proactive
corporate environmental strategy. Academy of Management Review, 28, 71–88.
Argote, L., McEvily, B., & Reagans, R. (2003). Managing knowledge in organizations: An
integrative framework and review of emerging themes. Management Science, 49, 571–582.
Arthur, J. B. (1994). Effects of human resource systems on manufacturing performance and
turnover. Academy of Management Journal, 37, 670–687.
Ashkanasy, N. M., Wilderom, C. P. M., & Peterson, M. F. (2000). Handbook of organizational
culture and change. Thousand Oaks, CA: Sage.
Bae, J., & Lawler, J. J. (2000). Organizational and HRM strategies in Korea: Impact on firm
performance in an emerging economy. Academy of Management Journal, 43, 502–517.
Baird, L., & Meshoulam, I. (1988). Managing two fits of strategic human resource management.
Academy of Management Review, 13, 116–128.
Barney, J. B. (1986). Strategic factor markets: Expectations, luck, and business strategy.
Management Science, 32, 1231–1241.
Barney, J. B. (1991). Firm resources and sustained competitive advantage. Journal of
Management, 17, 99–120.
Barney, J. B. (2001). Is the ‘resource-based view’ a useful perspective for strategic management?
yes. Academy of Management Review, 26, 41–56.
Baron, R. M., & Kenny, D. A. (1986). The moderator–mediator variable distinction in social
psychological research: Conceptual, strategic, and statistical considerations. Journal of
Personality and Social Psychology, 51, 1173–1182.
Bassellier, G., & Benbasat, I. (2004). Business competence of information technology
professionals: Conceptual development and influence on IT-business partnerships. MIS
Quarterly, 28, 673–694.
Becker, G. S. (1964). Human capital. New York, NY: Columbia University Press.
Bowen, D. E., & Ostroff, C. (2004). Understanding HRM-firm performance linkages: The role
of the strength of the HRM system. Academy of Management Review, 29, 203–221.
Brown, S. P., & Leigh, T. W. (1996). A new look at psychological climate and its relationship
to job involvement, effort and performance. Journal of Applied Psychology, 81, 358–368.
Burton, R. M., Lauridsen, J., & Obel, B. (2004). The impact of organizational climate and
strategic fit on firm performance. Human Resource Management, 43, 67–82.
Cappelli, P., & Neumark, D. (2001). Do ‘high-performance’ work practices improve
establishment-level outcomes? Industrial & Labor Relations Review, 54, 737–775.
Cardy, R. L., & Dobbins, G. H. (1994). Performance appraisal: Alternative perspectives.
Cincinnati, OH: Southwestern Publishing.
Chang, P. C., & Chen, S. J. (2011). Crossing the level of employee’s performance: HPWS,
affective commitment, human capital, and employee job performance in professional service
organizations. The International Journal of Human Resource Management, 22, 883–901.
Chang, S., Jia, L., Takeuchi, R., & Cai, Y. (2014). Do high-commitment work systems affect
creativity? A multilevel combinational approach to employee creativity. Journal of Applied
Psychology, 99, 665–680.
Chiang, F., & Birtch, T. A. (2010). Appraising performance across borders: An empirical
examination of the purposes and practices of performance appraisal in a multi-country
context. Journal of Management Studies, 47, 1365–1393.
Chiang, F., & Birtch, T. A. (2011). The impact of reward climate on service quality orientation
and employee attitudes. International Journal of Hospitality Management, 30, 3–9.
Chiang, F., & Birtch, T. A. (2012). The performance implications of financial and non-financial
rewards: An Asian nordic comparison. Journal of Management Studies, 49, 538–570.
Chiang, Y. H., Hsu, C. C., & Shih, H. A. (2014). Experienced high-performance work system,
extroversion personality, and creativity performance. Asia Pacific Journal of Management,
32, 531–549.
Chuang, C. H., & Liao, H. U. I. (2010). Strategic human resource management in service
context: Taking care of business by taking care of employees and customers. Personnel
Colakoglu, S., Hong, Y., & Lepak, D. P. (2010). Models of strategic human resource management.
In A. Wilkinson, N. Bacon, & S. Snell (Eds.), The SAGE handbook of human resource
management (pp. 31–41). Thousand Oaks, CA: Sage.
Collins, C. J., & Clark, K. D. (2003). Strategic human resource practices, top management team
social networks, and firm performance: The role of human resource practices in creating
organizational competitive advantage. Academy of Management Journal, 46, 740–751.
Combs, J., Liu, Y., Hall, A., & Ketchen, D. (2006). How much do high-performance work
practices matter? A meta-analysis of their effects on organizational performance. Personnel
Datta, D. K., Guthrie, J. P., & Wright, P. M. (2005). Human resource management and labour
productivity: Does industry matter? Academy of Management Journal, 48, 135–145.
De Saá-Pérez, P. & García-Falcón, J. M. (2002). A resource-based view of human resource
management and organizational capabilities development. The International Journal of
Human Resource Management, 13, 123–140.
De Vos, A., de Hauw, S., & Willemse, I. (2015). An integrative model for competency
development in organizations: The Flemish case. The International Journal of Human
Resource Management, 26, 2543–2568.
Dencker, J. C., Gruber, M., & Shah, S. K. (2009). Individual and opportunity factors influencing
job creation in new firms. Academy of Management Journal, 52, 1125–1147.
Drazin, R., Glynn, M. A., & Kazanjian, R. K. (1999). Multilevel theorizing about creativity in
organizations: A sensemaking perspective. Academy of Management Review, 24, 286–307.
Egan, T. M. (2005). Factors influencing individual creativity in the workplace: An examination
of quantitative empirical research. Advances in Developing Human Resources, 7, 160–181.
Eisenhardt, K. M., & Martin, J. A. (2000). Dynamic capabilities: What are they? Strategic
Management Journal, 21, 1105–1121.
Evans, W. R., & Davis, W. D. (2005). High-performance work systems and organizational
performance: The mediating role of internal social structure. Journal of Management, 31,
758–775.
Fan, D., Cui, L., Zhang, M. M., Zhu, C. J., Härtel, C. E., & Nyland, C. (2014). Influence of high-
performance work systems on employee subjective well-being and job burnout: Empirical
evidence from the Chinese healthcare sector. The International Journal of Human Resource
Fey, C. F., & Björkman, I. (2001). The effect of human resource management practices on
MNC subsidiary performance in Russia. Journal of International Business Studies, 32, 59–75.
Fleetwood, S., & Hesketh, A. (2006). HRM-performance research: under-theorized and
lacking explanatory power. The International Journal of Human Resource Management, 17,
1977–1993.
Fleetwood, S., & Hesketh, A. (2008). Theorising under-theorisation in research on the HRM-
performance link. Personnel Review, 37, 126–144.
Fink, L., & Neumann, S. (2007). Gaining agility through IT personnel capabilities: The
mediating role of IT infrastructure capabilities. Journal of the Association for Information
Systems, 8, 440–462.
Foley, S., Ngo, H. Y., & Loi, R. (2012). The adoption of high-performance work systems in
foreign subsidiaries. Journal of World Business, 47, 106–113.
Fulmer, I. S., Gerhart, B., & Scott, K. S. (2003). Are the 100 best better? An empirical investigation
of the relationship between being a ‘great place to work’ and firm performance. Personnel
Gong, Y., Law, K. S., Chang, S., & Xin, K. R. (2009). Human resource management and firm
performance: The differential role of managerial affective and continuance commitment.
Journal of Applied Psychology, 94, 263–275.
Grant, R. M. (1996). Prospering in dynamically-competitive environments: Organisational
capability as knowledge integration. Organization Science, 7, 375–387.
Green, K. W., Wu, C., Whitten, D., & Medlin, B. (2006). The impact of strategic human
resource management on firm performance and HR professionals’ work attitude and work
performance. The International Journal of Human Resource Management, 17, 559–579.
Guest, D. E., Michie, J., Conway, N., & Sheehan, M. (2003). Human resource management
and corporate performance in the UK. British Journal of Industrial Relations, 41, 291–314.
Guthrie, J. P. (2001). High-involvement work practices, turnover, and productivity: Evidence
from New Zealand. Academy of Management Journal, 44, 180–190.
Hall, R. (1992). The strategic analysis of intangible resources. Strategic Management Journal,
13, 135–144.
Harman, H. H. (1960). Modern factor analysis. Chicago, IL: The University of Chicago Press.
Hatch, N. W., & Dyer, J. H. (2004). Human capital and learning as a source of sustainable
competitive advantage. Strategic Management Journal, 25, 1155–1178.
Hayes, A. F. (2012). PROCESS: A versatile computational tool for observed variable mediation,
moderation, and conditional process modeling. Retrieved from http://www.afhayes.com/
public/process2012.pdf
Hesketh, A., & Fleetwood, S. (2006). Beyond measuring the human resources management-
organizational performance link: Applying critical realist meta-theory. Organization, 13,
677–699.
Hitt, M. A., Biermant, L., Shimizu, K., & Kochhar, R. (2001). Direct and moderating effects of
human capital on strategy and performance in professional service firms: A resource-based
perspective. Academy of Management Journal, 44, 13–28.
Hofmann, D. A., Morgeson, F. P., & Gerras, S. J. (2003). Climate as a moderator of the
relationship between leader-member exchange and content specific citizenship: Safety
climate as an exemplar. Journal of Applied Psychology, 88, 170–178.
Huselid, M. A. (1995). The impact of human resource management practices on turnover,
productivity, and corporate financial performance. Academy of Management Journal, 38,
635–672.
Huselid, M. A., Jackson, S. E., & Schuler, R. S. (1997). Technical and strategic human resource
management effectiveness as determinants of firm performance. Academy of Management
Journal, 40, 171–188.
James, L., Hartman, E., Stebbins, M., & Jones, A. (1977). An examination of the relationship
between psychological climate and a VIE model for work motivation. Personnel Psychology,
30, 229–254.
James, L. R., James, L. A., & Ashe, D. K. (1990). The meaning of organizations: The role of
cognition and values. In B. Schneider (Ed.), Organizational climate and culture (pp. 40–84).
San Francisco, CA: Jossey-Bass.
Janssen, O., van de Vliert, E., & West, M. (2004). The bright and dark sides of individual and
group innovation: A special issue introduction. Journal of Organizational Behavior, 25,
129–145.
Jiang, K., Lepak, D. P., Hu, J., & Baer, J. C. (2012). How does human resource management
influence organizational outcomes? A meta-analytic investigation of mediating mechanisms.
Academy of Management Journal, 55, 1264–1294.
Jiang, J. Y., & Liu, C. W. (2015). High-performance work systems and organizational effectiveness:
The mediating role of social capital. Human Resource Management Review, 25, 126–137.
Jiang, J., Wang, S., & Zhao, S. (2012). Does HRM facilitate employee creativity and organizational
innovation? A study of Chinese firms. The International Journal of Human Resource
Management, 23, 4025–4047.
Kehoe, R. R., & Wright, P. M. (2013). The impact of high-performance human resource practices
on employees’ attitudes and behaviors. Journal of Management, 39, 366–391.
Kim, K., & Slocum, J. W. (2008). Individual differences and expatriate assignment effectiveness:
The case of U. S. based-Korean expatriates. Journal of World Business, 43, 122–123.
Kim, S., Wright, P. M., & Su, Z. (2010). Human resource management and firm performance
in China: A critical review. Asia Pacific Journal of Human Resources, 48, 58–85.
Kirkman, B. L., Rosen, B., Tesluk, P. E., & Gibson, C. B. (2004). The impact of team empowerment
on virtual team performance: The moderating role of face-to-face interaction. Academy of
Lai, L., & Kapstad, J. C. (2009). Perceived competence mobilization: An explorative study of
predictors and impact on turnover intentions. The International Journal of Human Resource
Management, 20, 1985–1998.
Latham, G. P., & Pinder, C. C. (2005). Work motivation theory and research at the dawn of
the twenty-first century. Annual Review of Psychology, 56, 485–516.
Laursen, K., & Foss, N. J. (2003). New human resource management practices, complementarities,
and the impact on innovation performance. Cambridge Journal of Economics, 27, 243–263.
Leede, J., de Looise, J. C., & Alders, B. C. M. (2002). Innovation, improvement and operations:
An exploration of the management of alignment. International Journal of Technology
Lepak, D. P., & Snell, S. A. (2002). Examining the human resource architecture: The relationships
among human capital, employment, and human resource configurations. Journal of
Lertxundi, A., & Landeta, J. (2011). The moderating effect of cultural context in the relation
between HPWS and performance: An exploratory study in Spanish multinational companies.
The International Journal of Human Resource Management, 22, 3949–3967.
Levenson, A. R., van der Stede, W. A., & Cohen, S. G. (2006). Measuring the relationship
between managerial competencies and performance. Journal of Management, 32, 360–380.
Lu, C. M., Chen, S. J., Huang, P. C., & Chien, J. C. (2015). Effect of diversity on human resource
management and organizational performance. Journal of Business Research, 68, 857–861.
MacDuffie, J. P. (1995). Human resource bundles and manufacturing performance:
Organizational logic and flexible production systems in the world auto industry. Industrial
and Labor Relations Review, 48, 195–217.
Mafabi, S., Munene, J. C., & Ahiauzu, A. (2013). Organisational resilience: Testing the
interaction effect of knowledge management and creative climate. Journal of Organizational
Makadok, R. (2001). Toward a synthesis of the resource-based and dynamic-capability views
of rent creation. Strategic Management Journal, 22, 387–402.
Martin-Tapia, I., Aragón-Correa, J. A., & Guthrie, J. P. (2009). High-performance work systems
and export performance. The International Journal of Human Resource Management, 20,
633–653.
Messersmith, J. G., & Guthrie, J. M. (2010). High-performance work systems in emergent
organisations: Implications for firm performance. Human Resource Management, 49,
241–264.
Neal, A., & Griffin, M. A. (1999). Developing a theory of performance for human resource
management. Asia Pacific Journal of Human Resources, 37, 44–59.
Neal, A., West, M. A., & Patterson, M. G. (2005). Do organizational climate and competitive
strategy moderate the relationship between human resource management and productivity?
Journal of Management, 31, 492–512.
Nonaka, I., & Takeuchi, H. (1995). The knowledge-creating company. New York, NY: Oxford
University Press.
Nybø, G. (2004). Personnel development for dissolving jobs: Towards a competency-based
approach? The International Journal of Human Resource Management, 15, 549–564.
O’Reilly, C. A., & Chatman, J. A. (1996). Cultures as social control: Corporations, cults and
commitment. In B. M. Staw & L. L. Cummings (Eds.), Research in organizational behavior
(pp. 157–200). Greenwich, CT: JAI Press.
Paauwe, J. (2009). HRM and performance: achievements, methodological issues and prospects.
Journal of Management Studies, 46, 129–142.
Paauwe, J., Guest, D., & Wright, P. M. (2013). HRM and performance: Achievements and
challenges. Chichester: Wiley.
Pfeffer, J. (1994). Competitive advantage through people. California Management Review, 36,
9–28.
Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., & Podsakoff, N. P. (2003). Common method
biases in behavioral research: A critical review of the literature and recommended remedies.
Journal of Applied Psychology, 88, 879–903.
Porter, L. W., & Lawler, E. E., III (1968). Managerial attitudes and performance. Homewood,
IL: Richard D. Irwin.
Priem, R. L., & Butler, J. E. (2001a). Is the resource-based ‘view’ a useful perspective for strategic
management research? The Academy of Management Review, 26, 22–40.
Priem, R. L., & Butler, J. E. (2001b). Tautology in the resource-based view and the implications
of externally determined resource value: Further comments. Academy of Management
Journal, 26, 57–66.
Qiao, K., Khilji, S., & Wang, X. (2009). High-performance work systems, organizational
commitment, and the role of demographic features in the People’s Republic of China. The
International Journal of Human Resource Management, 20, 2311–2330.
Reichers, A. E., & Schneider, B. (1990). Climate and culture: An evolution of constructs. In B.
Schneider (Ed.), Organizational climate and culture (pp. 5–39). San Francisco, CA: Jossey-
Bass.
Richard, O. C., & Johnson, N. B. (2001). Strategic human resource management effectiveness
and firm performance. International Journal of Human Resource Management, 12, 299–310.
Rodriguez, D., Patel, R., Bright, A., Gregory, D., & Gowing, M. K. (2002). Developing
competency models to promote integrated human resource practices. Human Resource
Rynes, S. L., Gehart, B., & Parks, L. (2005). Personnel psychology: Performance evaluation and
pay for performance. Annual Review of Psychology, 56, 571–600.
Salancik, G. R., & Pfeffer, J. (1978). A social information processing approach to job attitudes
and task design. Administrative Science Quarterly, 23, 224–253.
Salvato, C., & Rerup, C. (2011). Beyond collective entities: Multilevel research on organizational
routines and capabilities. Journal of Management, 37, 468–490.
Scarbrough, H. (2003). Knowledge management, HRM and the innovation process.
International Journal of Manpower, 24, 501–516.
Schneider, B., White, S. S., & Paul, M. C. (1998). Linking service climate and customer
perceptions of service quality: Test of a causal model. Journal of Applied Psychology, 83,
150–163.
Schumpeter, J. (1934). The theory of economic development. Boston, MA: Harvard University
Press.
Scott, S. G., & Bruce, R. A. (1994). Determinants of innovative behavior: A path model of
individual innovation in the workplace. Academy of Management Journal, 37, 580–607.
Shalley, C. E., & Gilson, L. L. (2004). What leaders need to know: A review of social and
contextual factors that can foster or hinder creativity. The Leadership Quarterly, 15, 33–53.
Shalley, C. E., Gilson, L. L., & Blum, T. C. (2009). Interactive effects of growth need strength,
work context, and job complexity on self-reported creative performance. Academy of
Shih, H. A., Chiang, Y. H., & Hsu, C. C. (2006). Can high-performance work systems really
lead to better performance? International Journal of Manpower, 27, 741–763.
Shih, H. A., Chiang, Y. H., & Hsu, C. C. (2013). High-performance work system and HCN
performance. Journal of Business Research, 66, 540–546.
Shipton, H., West, M. A., Dawson, J., Birdi, K., & Patterson, M. (2006). HRM as a predictor of
innovation. Human Resource Management Journal, 16, 3–27.
Singh, K. (2003). Strategic HR orientation and firm performance in India. International Journal
of Human Resource Management, 14, 530–543.
Smith-Crowe, K., Burke, M. J., & Landis, R. S. (2003). Organizational climate as a moderator
of safety knowledge–safety performance relationships. Journal of Organizational Behavior,
24, 861–876.
Starkey, K., Tempest, S., & Mckinlay, A. (2004). How organizations learn: Managing the search
for knowledge. London: Thomson.
Sun, L. Y., Aryee, S., & Law, K. S. (2007). High-performance human resource practices,
citizenship behavior, and organizational performance: A relational perspective. Academy
of Management Journal, 50, 558–577.
Takeuchi, R., Chen, G., & Lepak, D. P. (2009). Through the looking glass of a social system:
Cross-level effects of high-performance work system on employees’ attitudes. Personnel
Takeuchi, R., Lepak, D. P., Wang, H., & Takeuchi, K. (2007). An empirical examination of the
mechanisms mediating between high-performance work systems and the performance of
Japanese organizations. Journal of Applied Psychology, 92, 1069–1083.
Teece, D. J. (2007). Explicating dynamic capabilities. Strategic Management Journal, 28,
1319–1350.
Venkatraman, N., & Ramanujam, V. (1986). Measurement of business performance in strategy
research: A comparison of approaches. Academy of Management Review, 11, 801–814.
Verburg, R. M., den Hartog, D. N., & Koopman, P. L. (2007). Configurations of human resource
management practices: A model and test of internal fit. The International Journal of Human
Wageman, R. (1997). Critical success factors for creating superb self-managing teams.
Organizational Dynamics, 26, 49–61.
Wall, T. D., Michie, J., Patterson, M., Wood, S. J., Sheehan, M., Clegg, C. W., & West, M. A.
(2004). On the validity of subjective measures of company financial performance. Personnel
Wall, T. D., & Wood, S. J. (2005). The romance of human resource management and business
performance, and the case for big science. Human Relations, 58, 429–462.
Wei, L. Q., & Lau, C. M. (2010). High-performance work systems and performance: The role
of adaptive capability. Human Relations, 63, 1487–1511.
Wei, L. Q., Liu, J., Zhang, Y., & Chiu, R. (2008). The role of corporate culture in the process of
SHRM: Evidence from Chinese enterprises. Human Resource Management, 47, 777–794.
Wernerfelt, B. (1984). A resource-based view of the firm. Strategic Management Journal, 5,
171–180.
Wood, S., & de Menezes, L. M. (2011). High involvement management, high-performance
work systems and well-being. The International Journal of Human Resource Management,
22, 1586–1610.
Wood, S., van Veldhoven, M., Croon, M., & de Menezes, L. M. (2012). Enriched job design,
high involvement management and organizational performance: The mediating roles of job
satisfaction and well-being. Human Relations, 65, 419–445.
Wright, P. M., Dunford, B. B., & Snell, S. A. (2001). Human resources and the resource-based
view of the firm. Journal of Management, 27, 701–721.
Wright, P. M., McCormick, B., Sherman, W. S., & McMahan, G. C. (1999). The role of human
resource practices in petro-chemical refinery performance. International Journal of Human
Wright, P. M., & McWilliams, G. C. (1994). Human resources and sustained competitive
advantage: A resource-based perspective. The International Journal of Human Resource
Wright, P. M., & Nishii, L. H. (2006). Strategic HRM and organizational behavior: Integrating
multiple levels of analysis. Working paper 06–05. Ithaca, NY: CAHRS Cornell University.
Yang, C. C., & Lin, C. Y. Y. (2009). Does intellectual capital mediate the relationship between
HRM and organizational performance? Perspective of a healthcare industry in Taiwan. The
International Journal of Human Resource Management, 20, 1965–1984.
Yli-Renko, H., Autio, E., & Sapienza, H. J. (2001). Social capital, knowledge acquisition, and
knowledge exploitation in young technology-based firms. Strategic Management Journal,
22, 587–613.
Youndt, M. A., & Snell, S. A. (2004). Human resource configurations, intellectual capital, and
organizational performance. Journal of Managerial Issues, 337–360.
Youndt, M. A., Snell, S. A., Dean, J. W., & Lepak, D. P. (1996). Human resource management,
manufacturing strategy, and firm performance. Academy of Management Journal, 39,
836–866.
Zhang, M., Fan, D. D., & Zhu, C. J. (2014). High-performance work systems, corporate social
performance and employee outcomes: Exploring the missing links. Journal of Business Ethics,
120, 423–435.
Zhang, M., Zhu, C. J., Dowling, P. J., & Bartram, T. (2013). Exploring the effects of high-
performance work systems (HPWS) on the work-related well-being of Chinese hospital
employees. The International Journal of Human Resource Management, 24, 3196–3212.
Zhou, Y., Hong, Y., & Liu, J. (2013). Internal commitment or external collaboration? The impact
of human resource management systems on firm innovation and performance. Human

The Moderating Role of Climate For Creativity

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

The Moderating Role of Climate For Creativity

Uploaded by

Copyright:

Available Formats

The International Journal of Human Resource

ISSN: 0958-5192 (Print) 1466-4399 (Online) Journal homepage: http://www.tandfonline.com/loi/rijh20

High-performance human resource practices

Emmy van Esch, Li Qun Wei & Flora F. T. Chiang

To link to this article: https://doi.org/10.1080/09585192.2016.1206031

Published online: 08 Jul 2016.

Submit your article to this journal

Article views: 557

View related articles

View Crossmark data

Citing articles: 1 View citing articles

Full Terms & Conditions of access and use can be found at

High-performance human resource practices and

CONTACT Flora F. T. Chiang fchiang@hkbu.edu.hk

a deeper understanding of how high-performance HR practices relate to firm

High-performance Employees’ Firm

Figure 1. Conceptual model.

employees’ various competencies. Second, prior studies using competency view

Theory and hypotheses development

High-performance HR practices, employees’ competencies and firm

High-performance HR practices are the primary means by which firms influence

Moderating role of the climate for creativity

From a contingency perspective, the role of moderators should be considered

H2: The positive relationship between high-performance HR practices and employees’

et al., 2013), 16 items related to high-performance HR practices were adapted from

Addressing common source bias

Since the CEOs were asked to provide information on high-performance HR

Data validation and statistical methods

Table 1. Measurement model statistic.

Table 2. Means, SDs, and correlations among variables.

Firm age 14.407 8.425 .412** 1

Figure 2. Interaction between high-performance HR practices and climate for creativity.

high-performance HR practices and employees’ competencies was stronger in a

Table 4. Indirect effects of high-performance HR practices (via employees’ competencies) on

Indirect effect se 95% Confidence interval

Table 5. Indirect effects of high-performance HR practices (via employees’ competencies) on ROA

Theoretical and practical contributions

competencies as a mediator and organisational climate for creativity as a mod-

HR practices helps organisations perform better by increasing the levels of their

Limitations and future research

In addition to climate, other contextual factors, such as leadership, national

You might also like