Journal of Critical Reviews

ISSN- 2394-5125 Vol 6, Issue 6, 2019

Review Article

STRATEGIC HUMAN RESOURCE MANAGEMENT AND ORGANIZATIONAL PERFORMANCE:

MEDIATING ROLE OF EMPLOYEE WELL-BEING IN THE INDIAN IT INDUSTRY
SHAGUFTA SHOWKAT1*, KEVIN SHAJAN2, VIVEK KUMAR PATHAK3
1*Assistant
Professor, Krupanidhi Group of Institutions, Bangalore. jaanees78@gmail.com
2MBA
Student, Krupanidhi Group of Institutions, Bangalore. kshajan70@gmail.com
3Research Mentor, Accendere Knowledge Management Services, CL Educate Ltd. pathak.v@accendere.co.in

Received: 11.08.2019 Revised: 10.09.2019 Accepted: 13.09.2019

ABSTRACT
Purpose: The present study has been taken to find out the influence of Strategic Human Resource Management (S-HRM) on Organizational performance
(OP) and the mediating role of Employee well-being (EWB)in the association between two constructs in the Indian IT Industry.
Design/ Methodology/ Approach- The constructs selected for the present study are S-HRM, OP and EWB. The model has been tested with the help of
structural equation modelling (SEM). The data collection has been done by getting the responses from 211 HR Professionals working in IT sector in
Bangalore, India. The reliability has been established by using Confirmatory Factor Analysis (CFA).
Findings: The results show that an association between Strategic Human Resource Management and Organizational performance is significant and
positive due to the mediating role of Employee well-being.
Research Limitation: The study has been undertaken in the IT sector in Bangalore India, the results cannot be generalized across the industry.
Practical Implications: The results indicated that pay offs can be maximized by integrating HR practices with company’s overall strategic planning
process. By merging HR practices with strategic planning solutions can be provided for various organizational problems.
Originality/ Value: The present study is an attempt to find out the influence of high- performance work systems on organizational performance in the
Indian context. Till date, the previous research done to understand the impact of S-HRM on OP is quite limited specifically in the Indian context. The aim
of the study was to indicate the influence of SHRM on employee well-being and consequently the influence of employee well-being on organizational
performance. Also, the role of EWB in the association between S-HRM and OP has been empirically validated
Key Words: Strategic Human Resource Management, Organizational Performance, Employee well-being, SEM.
Paper Type: Research Paper

© 2019 by Advance Scientific Research. This is an open-access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/)
DOI: http://dx.doi.org/10.22159/jcr.06.06.11

INTRODUCTION which have not been answered (Tsai 2006; Chaudhuri 2009). High
performance work systems are criticized by many as it is assumed to
The integration between HR practices and strategic management is preferring the goals of management over well-being of employees
developed through the emergence of S-HRM (Wright and McMahan, (Boselie et al, 2005). Not much attention has been paid in the past
1992). The emphasis of linking HRM to organizational strategy was research to investigate the influence of high -performance work
due to the upsurge of resource-based view (Peteraf, 1993; Barney, systems (HPWP’s) on employee productivity (Sparham and Sung,
1995). The domain has gained a lot of interest in the recent past 2007; Kroon et al., 2009).
because due consideration should be given to the people as one of the In the Indian context, less research has been done on the effect of high-
aspects in organizational strategy since it does not only help in performance work systems as a part of strategic human resource
implementing the strategy it may serve as a sustainable competitive management and organizational performance. Singh (2003)
advantage for organizations. investigated how is strategic HR orientation related to organizational
The S-HRM research done in the past has focused on how a pack of HR performance in Indian context. Similarly, Som (2008) found out the
practices and policies affects organizational results. The precise HR influence of innovative HR on firm performance. Realizing the dearth
practices containing high performance work systems has not been of enquiry on the association between S-HRM and OP, present study is
specified , the mutual theme in S-HRM literature is to highlight the undertaken to find out the impact of independent variable (HPWS)on
importance of utilization of practices in the organizations providing dependent variable ( OP) and it has to be taken into consideration that
proper training to the employees, taking employee inputs for decision S-HRM and HPWS are used conversely in the present study.
making, appropriate reward mechanism. As has been indicated in the The present study has attempted to contribute to the already existing
past literature, high-performance work systems includes trainings research on SHRM in various ways. First, an evidence has been
beyond job, employee participation, information sharing, reward provided on whether the high- performance work systems are effective
mechanism based on groups (Arthr 1994; Huselid et al, 1997). Huselid in Indian IT sector. Secondly the study has established the influence of
(1995) investigated whether an association between strategic human HPWS on OPin the Indian context. Till date, the researchon the
resource management and organizational performance exists. Huselid relationship between SHRM and organizational performance is quite
(1995) found a significant association between the implementation of limited specifically in the Indian context. Third aim of the present
such HR practices and better productivity and profitability. There are study was to find out the influence of S-HRM on EWB and consequently
few other studies which have shown that high performance work the influence of EWB on organizational performance. Finally, the effect
practices lead to better organizational results and the relationship of EWB as a mediator which enhances the influence of S-HRM on
between the two is quite significant (Koch and McGrath 1996; Guthrie organizational performance has been empirically validated. Moreover,
2001; Dutta et al., 2005). High performance work systems are in this study partial correlation coefficient is used to estimate whether
investigated by researchers in the past but there are many questions a significant relationship exists between high performance work

Journal of critical reviews 75

 Strategic Human Resource Management and Organizational Performance: Mediating Role of Employee Well-Being in the Indian it Industry

systems and firm performance. Previous research findings were based performance and generation of monetary value (Wright & McMahan,
on bivariate correlations, but meta-analysis based on partial 2011). Though, employees have the possession of human capital and if
correlations helps in estimating an association while holding other they leave it gets transferred to other firms. Consequently, it has
factors constant and gives a better estimation of the relationship become mandatory for organizations to use HR systems to upgrade
between high performance work systems and organizational present supply of human resource and prevention of losing human
performance. Using partial correlation coefficient to investigate the assets to other organizations (through employee motivation and
influence of HPWP’s on organizational performance has been identified retention). The application of Human Capital Theory to different topics
as a research gap in the previous research (Jiang 2017) and present in strategic human resource management is evident in the past. Few of
study has attempted to fill this research gap. them include HR architecture (Lepak & Snell, 2002) and also studies
related to association between HR systems and organizational
effectiveness (Kehoe & Collins, in press; Takeuchi et al., 2007). Few
LITERATURE REVIEW recent studies have focused on understanding those processes which
Delaney and Huselid (1996), has indicated a powerful empirical help the organizations to make the human capital of each employee
evidence of the relationship between HR practices and firm strategically valuable (Polyhart et al., 2014; Wright and McMahan,
performance. Arthur (1994) found out that there are few practices, 2011; Polyhart and Moliterno 2011;).
that would label the human resource practices as having a Another framework which has been discussed in the Strategic human
commitment or control orientation. He suggested that a human resource literature is AMO framework. The AMO framework was
resource system which is commitment- oriented results in efficient originally given by Bailey (1993), according to him three components
processes. Strategic management of employees has been an area of are required to ensure discretionary efforts of employees which
focus to release the potential of employees (Batt, 2002). Established on include skills, motivation and opportunity for participation. The AMO
the postulation that approval of the alignment of explicit model is taken as a different form of social perspective (Jackson et al.,
organizational tactic with comprehensive HR practices as compared to 2014). This model suggests that performance is an outcome of skills
specific practices influencing performance of organizations (Lepak et and drive to perform ( Gerhart, 2007). AMO model has been broadly
al., 2006). Past research studies in S-HRM have tested how HPWS lead used in strategic human resource management studies to explain the
to better outcomes (Dutta et al., 2005). Given the evidence of that using role of mediators (Delery and Shaw 2001;Becker & Huselid
HPWS has a highly significant influence on organizational outcomes 1998).Based on the review of literature and theoretical background it
(Combs et al., 2006) there has been an emphasis on explaining can be hypothesized :
mediating links in the association between HPWS and H1a: SHRM has a significant and positive relationship with
performance.(Gong et al.,2009; Takeuchi et al., 2007; Evans and organizational performance
Davis,2005;Sunet al., 2007;Chuang and Liao, 2010).
Huselid (1995) after his study of 968 firms concluded that noteworthy SHRM and Employee Well-being
payoffs in financial performance can be achieved with the help of high- Employee well being has been known as one of the most significant
performance work practices. Combs et al. (2006), after conducting a concerns in organizations specifically due to the work- related stress
study suggested that the two constructs; HPWS and firm performance and the consequent unhealthy outcomes are on the high (Cooper and
is significantly related to each other. They also evaluated moderating Cartwright, 1996). Employee well-being is dependent on emotional,
impact of the type of industry on the effect of high- performance work spiritual and intellectual wellness of an employee (Seaward, 1994).
systems. Rabi et al., (2014) concluded that the association between The well-being does not happen in void, the presence of certain
high performance working systems and organizational performance is components impacts the reaction of individuals towards various
moderated by the national factors. scenarios. Sutherland and Cooper (1993), have suggested an
Subramony (2009) illustrated the AMO model to classify HRM association between work atmosphere and physical as well as mental
practices into three HR packages including HR practices which lead to health of employees. Creation of a happy and empatheticatmosphere
skill enhancement, motivation enhancement and empowerment help in augmenting a person’s well- being. Cunha and Cooper
enhancement. He identified that the packages of HRM have stronger (2002),concluded that the outcomes of a worrying atmosphere lead to
ties with organizational performance as compared to individual psychological issues.
practices of HRM. Rabi et al., (2014) studied the moderating influence (Rice et al.,1980; Rode, 2004), suggested that EWB at workplace
of national factors on the relationship between HPWS and cannot be represented with overall well-being. Few authors (Warr,
organizational performance. Jiang et al., (2012) found out the role of 1990; Daniels, 2000) concluded that situational measures of employee
mediators in the relationship between HRM and organizational well-being are important to take into consideration the intricacies and
performance. They concluded that the mechanisms of HR may have an differences in the employees’ emotional and intellectual experiences at
influence on the outcomes of organizations in different ways. Above the workplace. Furthermore, Page et al., (2009) concluded that using
given studies provide considerable evidence that there exists a positive general as well as work-related measures will lead to an exact
relationship between Human Resource practices and performance. evaluation of emotional well-being .
In order to drive better performance and outputorganizations have to
Theoretical Framework ensure that an employee is not overworked and possesses work
The linkage between strategic human resource management and firm autonomy which is critical to employee well-being. McGrath (1976),
performance has been considered basic and important(Jackson et al., suggested that when a person neither posses the capabilities nor has
2014). According to resource-based view human resources are rare , resources to meet the job demands it leads to stress. Past research
precious, can’t be substituted and can serve as organization’s studies have shown that perceived job control result in reduced stress
competitive advantage (Wernerfelt 1984; Barney, 1991;). According to and better employee healthiness (Israel et al., 1989). Subsequently,
this viewpoint, many researchers have given the theories regarding employee authorization and participative management style can
why HR practices &systems can be measured as a foundation of enhance employees’ perceived control on job and lead to better
organizational advantage( Lado and Wilson,1994). Such kind of employee well-being
theoretical work has made it possible to apply the resource-based view Well-known research studies are emphasizing the importance of high-
to S-HRM and several research studies have drawn upon resource- performance working systems in organizations ( MacDuffie 1995). It is
based view to elucidate the significant relationship between systems of considered useful to talk about high performance work-systems while
HR and effectiveness of organizations . In accordance with resource- identifying the fact that high performance work practices are
based view, theory based on human capital takes into consideration implemented to have an influence on employee outcomes and
how much human capital has contributed in organizational organizational performance(Godard, 2004). Vandenberg et al.

Journal of critical reviews 76

 Strategic Human Resource Management and Organizational Performance: Mediating Role of Employee Well-Being in the Indian it Industry

(1999),made a framework according to which high -performance work et al., 1999).As has been proposed by London and Larsen (1999), well-
systems incorporate authority, data, rewards and information. being of employees is improved once supervisory support is provided,
The above mentioned four components are jointly strengthening. The and employees are involved in decision making. Spreitzer (1996)
intention of high-involvement work processes is to authorize maintained that the way employees perceive their work environment
employees to make their own choices, augment the knowledge which has a huge influence upon the capability of an individual to handle
is required to take decisions and acknowledge their efforts by stress at workplace. The significant aspects supporting employee well-
rewarding them (Macky and Boxall, 2008). Past research studies also being are work autonomy and social support. Assuring that employees
indicate that greater involvement practices lead to the positive are not overworked and have control on their work is important for
organizational results such as organizational commitment, employee employee well-being and leads to better output and higher efficiency.
engagement and job fulfilment (Vandenberg et al., 1999). Warr Past research studies indicate that perceived control is associated with
(1994)studied the aspects of work atmosphere which influence the better employee healthiness (Israel et al., 1989; Heaney et al., 1993).
positivity in awareness of health at workplace and listed many aspects Therefore, employee participation, supervisory support, employee
related to employee participation such as chances of autonomy in one’s empowerment enhances employee well-being. Employees who
work, skill utilization, job variety, transparency in communication and perceive organizations as supportive possess more employee
opportunity for developing interpersonal relationship at work. The commitment (Wayne et al., 1997) and show better performance levels
previous research studies have concluded that highly demanding jobs (Eisenberg et al., 1990). Thus, it can be predicted:
combined with lesser work autonomy creates stress ( Gallie 2005). If H1d: Employee well-being acts as a mediator in the association between
the employees are given work autonomy and control it helps in S-HRM and organizational performance.
reducing the apparent job anxiety. (Mackie et al., 2001) and leads to
the better health outcomes (Ettner and Crzywacz 2001).
Few other research studies using Lawler’s (1986) framework also METHODOLOGY
conclude that the attitude of workers become positive and physical and The present study has been undertaken to empirically test the impact
psychological well- being is improved when employee involvement is of SHRM on organizational performance and the role EWB plays in the
practiced in the organizations( Mackie et al., 2001). Based on review of relationship between two constructs. The sector chosen for the study is
literature it can be hypothesized that: IT sector in Bangalore city of India. A total of 211 HR professionals
H1b: SHRM has significant and positive relationship with EWB. working in different IT companies. Three hundred questionnaires were
sent to 40 IT companies and 211 filled questionnaires were collected
Employee Well- being and Organizational Performance showing a response rate of 70.34 %. The survey was undertaken
There has been a presumption that employee well-being leads to the during the working hours. The aim of the study was explained to the
better organizational output(Judge et al., 2001; Taris , 2006). participants by issuing a cover letter and making them understand that
Individual well-being is considered as a comprehensive, emotional participation is voluntary. The participants were given an assurance
state( Diener et al., 1999). Contrasting to this, psychological that that their identities will remain anonymous and the confidentiality
researchers have found it beneficial to concentrate on the measures of will be maintained. The demographic characteristics of the participants
well-being which are associated with work (Warr, 2007). Past revealed that 55% of the respondents are males; 73% fell in the age
researchers have investigated the relationship between the worker range of 26-35 years; almost 80% showed an experience of 5-10 years
productivity and job fulfilment and emotional exhaustion (Judge et al., and 80% of the respondents indicated an income level of 5-10 lacs p.a.
2001). Previous research has suggested a positive link between job
fulfilment and organizational outcomes (Judge et al., 2001). Past Table 1: Demographic Information of Respondents
research studies have provided an evidence that psychological well-
being of employees is associated with their output (Wright et al.,
2000). Wright and Bonett (1997) also made an attempt to empirically
test the relationship between well-being of employees and their
performance and found out the positive and significant relationship
between the two. Further, few other past research studies have
indicated a positive and significant relationship between job fulfilment
and employee well-being (Judge and Locke, 1993; Diener et al., 1999).
The association between job satisfaction and employee performance
can be explained in terms of social exchange theory. Blau (1964)
defined social exchange theory as an exchange between the two
partners in terms of favors which leads to upcoming obligations . The
social exchange theory is based on the reciprocity norm (Gouldner,
MEASURES
1960). It begins with one party providing certain kind of benefit to
another. If the receiver of the benefit reciprocates it subsequently leads SHRM (High Performance Work Practices)
to a feeling of shared obligation on the part of both parties involved Many approaches are available in the existing literature to measure
(Coyle-Shapiro, 2007). Similarly, when organizations take initiatives high performance work systems. The high-performance work systems
towards the well-being of employees, they reciprocate by performing in this study was measured with the help of a 9-item scale taken from
well and helping organization to reach its goals. Hence, it can be Datta et al; (2005). The scale was modified according to the
hypothesized that: requirements of current study. The respondents were given a set of
H1c: Employee well-being has significant and positive relationship with statements to find out their level of agreeableness:
organizational performance. 1. Rewards are based on the group performance
2. Employees are paid based on skill or knowledge
Mediating Role of Employee Well-Being 3. Employees are trained in a variety of skills.
The present study proposes that EWB mediates the relationship 4. Employees are involved in programs to ensure employee
between SHRM and OP. SHRM impacts organizational performance participation and employee input?
through promoting a sense of well-being among the employees. When 5. Employees are provided with relevant information in terms
SHRM leads to job satisfaction, employee well-being is improved. of quality and productivity.
Research has indicated that greater involvement practices leads to the 6. Employees are organized in self-directed work teams
constructive organizational results such as organizational 7. Employees are provided the extensive training in generic
commitment, employee engagement and job satisfaction (Vandenberg skills

Journal of critical reviews 77

 Strategic Human Resource Management and Organizational Performance: Mediating Role of Employee Well-Being in the Indian it Industry

8. Employee opinion in sought in decision making process Table 4: Partial Correlation Coefficient
9. Supervisors’ role is more of facilitators rather than S S S S S S S S S
E E E E
H H H H H H H H H O O O
instructors. R R R R R R R R R P P P
W W W W
Previous researchers have supported the usage of single high- B B B B
M M M M M M M M M 1 2 3
1 2 3 4
performance work system scale, (Becker and Huselid’ 1998) . The 1 2 3 4 5 6 7 8 9
S 1
Cronbach’s alpha of scale used for measuring S-HRM for present study H .
is 0.94 R 0
M 0
1 0
Employee well-being S 1
The employee-well being in this study is measured by a four-item scale .
H .
8
adapted from Zheng et al., (2015). The scale was modified as per the R
1
0
M 0
requirement of present study. According to Zheng et al., the well -being 0
2 0
of employees can be measured in terms of three aspects including well- S 1
. .
being in terms of life (LWB) , work (WWB) and psychology (PWB).The H
6 6
.
four items included in the study for measuring employee well-being R 0
9 6
M 0
are: 3
6 7
0
S 1
. . .
1. I chase the dreams in most of the aspects related to my life. H .
8 7 6
R 0
(LWB). M
0 3 3
0
5 8 3
2. My job satisfaction is high (WWB) 4 0
3. I can find ways for my job enrichment (WWB) S
. . . .
1
H .
4. My willingness to give and share time with others has grown R
6 6 6 6
0
over time. (PWB). 7 3 2 1
M 0
7 4 6 7
5 0
S 1
The Cronbach’s alpha of the scale used for measuring employee well- H
. . . . .
.
being in this study is .84 6 7 5 7 7
R 0
7 1 8 4 0
M 0
7 5 9 8 6
6 0
Organizational Performance
S 1
The 3-item scale for measuring organizational performance is adapted H
. . . . . .
.
6 7 6 6 6 6
from Khandwalla (1977) . The indicators of organizational R
9 8 1 3 1 7
0
performance used for the study include growth rate, market share, M 0
7 7 5 5 7 9
7 0
profitability were used in the present study. The Cronbach’s alpha used S 1
. . . . . . .
in this study for measuring organizational performance is 0.89. The H
5 4 5 5 5 7 4
.
research model of the present study is shown in Figure 1. R 0
0 5 8 4 8 0 7
M 0
8 8 8 9 7 0 2
8 0
S 1
. . . . . . . .
H .
5 7 5 5 5 6 7 6
R 0
9 1 7 0 6 8 3 6
M 0
2 2 7 8 8 2 0 4
9 0
1
. . . . . . . . .
O .
1 1 0 1 0 1 2 3 2
P 0
1 2 7 0 4 5 1 0 7
1 0
8 5 7 8 2 2 3 4 4
0
Fig. 1: Conceptual Framework 1
. . . . . . . . . .
O .
4 5 4 5 5 4 5 4 5 5
P 0
DATA ANALYSIS AND RESULTS 2
8 8 6 0 3 6 8 3 9 3
0
7 7 5 7 9 5 9 9 6 0
0
Table 2: Reliability Statistics 1
. . . . . . . . . . .
O .
5 5 5 4 3 4 6 4 5 6 7
P 0
1 5 0 9 8 9 1 6 2 7 4
3 0
0 3 6 6 4 0 5 8 6 0 1
0
1
Table 3 KMO and Bartlett's Test E . . . . . . . . . . . .
.
W 5 5 4 5 4 5 6 5 4 5 4 5
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .865 0
B 5 1 1 7 9 9 3 4 7 1 4 9
0
Bartlett's Test of Sphericity Approx. Chi-Square 778.462 1 9 1 2 7 4 9 7 6 0 1 4 4
0
df 120 E . . . . . . . . . . . . .
1
.
Sig. .000 W 5 4 4 5 4 4 5 4 3 5 3 5 7
0
B 7 0 5 1 3 5 3 9 5 0 7 7 6
0
2 2 8 4 1 4 5 6 7 8 7 1 6 8
Two tests namely Bartlett’s test of sphericity and KMO measure. 0
1
Bartlett’s test is used to find out the intercorrelation between the data. E . . . . . . . . . . . . . .
.
KMO test is used to measure the suitability of the data for factor W 3 3 3 3 3 3 3 4 3 3 3 4 6 6
0
B 3 2 7 9 5 4 8 0 0 5 5 5 4 5
analysis. The value of KMO in this study is .865 which is more than the 3 2 6 0 4 5 1 9 4 8 8 0 7 2 1
0
0
prescribed value which indicating that further analysis can be done.
1
Bartlett’s test χ2= 778.465, df=120 , p<001which is an indication that E . . . . . . . . . . . . . . .
.
W 5 5 5 5 6 5 5 5 4 4 5 7 7 7 6
relationship between items and are suitable for principal component B 6 8 9 7 0 2 9 0 2 9 9 4 5 1 3
0
analysis. To check the internal consistency of the variables, Cronbach’s 0
4 9 5 6 1 5 0 8 2 1 4 3 5 2 0 0
0
alpha was used. Cronbach’s alpha for the items in this study was .948
indicating appropriate consistency.
In order to find out the strength and the direction of the variables
partial correlation coefficient was used in this study. It was also used

Journal of critical reviews 78

 Strategic Human Resource Management and Organizational Performance: Mediating Role of Employee Well-Being in the Indian it Industry

to control the impact of control variables. The results shown here Table 7: Convergent Validity
indicate that variables are significantly cohesive and significant
correlation exists among the variables

Table 5: Total Variance Explained

Comp Initial Eigenvalues Extraction Sums of Rotation Sums of

onent Squared Loadings Squared Loadings
To % of Cumu To % of Cumu To % of Cumu
tal Vari lative tal Vari lative tal Vari lative
ance % ance % ance %
1 9.0 56.5 56.53 9.0 56.5 56.53 6.2 38.8 38.85
46 38 8 46 38 8 16 51 1
2 1.9 12.0 68.57 1.9 12.0 68.57 3.2 20.5 59.38
26 37 6 26 37 6 86 38 9
3 1.0 6.76 75.34 1.0 6.76 75.34 2.5 15.9 75.34
The results in Table 7 indicate that standardized estimates of the items
82 4 0 82 4 0 52 50 0
Extraction Method: Principal Component Analysis.
range from .599 to .856 and are significant. The CR ranges from 0.854
to 0.943. AVE values are higher than 0.5 suggests high reliability
After using principal component analysis 16 items were retained. according to Hair et al., (2015).
These 16 items are grouped into three factors. The total variance
Table 8: Discriminant Validity
calculated is 75.340 which is acceptable according to Hair et al.,
(2015). The factors were retained also because of the factor loadings Emotional SHRM Organizational
which is higher than 0.5 indicating the high internal consistency. Well-Being Performance
Further, all three factors have eigen values greater than 1 which makes Emotional Well- 0.831
factors suitable for further analysis (Gorsuch, 1990). Being
SHRM 0.729 0.805
Table 6: Rotated Component Matrixa Organizational
Performance 0.757 0.639 0.816
Component
1 2 3 Test of Hypotheses
SHRM2 .856 The theoretical model suggests that SHRM has a significant impact on
SHRM1 .825 OP and the association between two constructs is enhanced by EWB by
playing a mediating role. Structural equation modelling is used to test
SHRM6 .816
the theoretical model. The results of SEM suggest a satisfactory model
SHRM4 .785
fit to the data(CMIN/df 1.740, df 261, CFI 0.92, GFI 0.84, TLI 0.90 and
SHRM5 .785
RMSEA 0.071, CMIN/df 1.85). R 2 value is 0.64 indicating that all
SHRM3 .761 hypotheses are significant and accepted. The hypothesis H1 a assuming
SHRM7 .752 a significant relationship between S-HRM and OP has not been
SHRM9 .740 supported significantly with Beta Coefficient 0.118, p-value=0.447 and
SHRM8 .599 t-value= 0.761. The hypothesis H1b assuming significant association
EWB2 .829 between SHRM and EWB is accepted with Beta Coefficient .721, P-
EWB3 .808 value=0.000 and t-value=5.96. Likely, hypothesis H1 c assuming that the
EWB1 .756 impact of Employee Well -Being on Organizational Performance is
EWB4 .666 significantly positive is accepted with Beta Coefficient .707, P-
OP1 .828 value=0.000 and t-value=3.57
OP3 .752
OP2 .747 Table 9: Assessment of Hypothesis
Extraction Method: Principal Component Analysis. Hypothesi Relationship Standard P- Assessmen
Rotation Method: Varimax with Kaiser Normalization. s Coefficient value t
The data in Table 6 shows three factors were identified from the data paths
set. Factor 1 as SHRM, Factor 2 as employee well-being and Factor 3 as Direc Critica
Organizational Performance. Factor 1 (SHRM) consists of nine items t Path l Ratio
and shows an eigen value of 9.046. Factor 2 (Employee well-being ) H1a SHRM- .118 0.761 0.44 Not
consists of four items showing an eigen value of 1.926. Factor 3 Organizationa 7 supported
(Organizational performance) consists of three items and shows an l Performance
eigen value of 1.082. H1b SHRM- .721 5.961 0.00 Accepted
Construct Validity Employee 0
Hair et al. (2010) has mentioned construct validity evaluates that Well-Being
whether the construct that is being tested is addressed by the H1c Employee- .707 3.573 0.00 Accepted
experiment. In this study the construct validity is shown by convergent Well -Being- 0
validity and discriminant validity. The scales used in the study have Organizationa
been adopted from review of literature to create face validity. The l Performance
reliability is shown with the help of Cronbach’s alpha which is valued
at 0.948.CFA has been used to find out discriminant validity, Testing Mediation Effect: In order to find out that a model has a
convergent validity and goodness of fit statistics. Convergent validity is mediation effect, regression of mediating variable on predicator
shown by factor loadings, (AVE) and (CR). The results are provided in variable, dependent variable on predicator variable and mediating
Table 7. variable is done.

Journal of critical reviews 79

 Strategic Human Resource Management and Organizational Performance: Mediating Role of Employee Well-Being in the Indian it Industry

Figure 2: Showing Relationship between SHRM and Organizational Performance

Figure 3: Showing the Relationship between SHRM & EWB and EWB & OP

Figure 4: Showing the Mediating Role of EWB in the Relationship between SHRM and OP

EWB .72, between EWB and Organizational Performance .70 are

Table 10: Effects of Employee Well-Being on SHRM and significant. However, the Coefficient path between SHRM and
Organizational Performance Organizational Performance .118 is not significant. Hence there is a
Relationship Direct Effect Indirect Effect Total Effect mediation effect (Hair et al., 2015). The results confirm that EWB
SHRM-EWB .721 ----- .721 mediates the relationship between the two constructs. Thus, H1d is
SHRM-OP .118 .509 .627 supported.
EWB-OP .707 ----- .707 Discussion: This study has attempted to throw some light how high-
performance work systems impact organizational performance. This
According to hypothesis H1d this study has tested the mediation effect study is a response to the identification of deeper insights into high
of Employee Well-Being between SHRM and Organizational performance work systems research (Bowen and Ostroff 2004). The
Performance using SEM. The Coefficient paths between SHRM and resource- based view indicates that organizational human capital as a

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 Strategic Human Resource Management and Organizational Performance: Mediating Role of Employee Well-Being in the Indian it Industry

source which leads to competitive advantage must be acknowledged, should be careful in scrutinizing and managing their high- performance
but the biggest limitation of resource-based view is its informal social work systems. It may be challenging for organizations to simply
background (Truss 2001). The influence of climate on organizational implement new HR practices ignoring the effect on employees. At the
culture has been taken into consideration by Bowen and Ostroff (2004) same time we emphasize the role of employee empowerment as the
and few other studies have considered the impact of HR systems on findings of the study demonstrate that employee well-being is
social networks (Leana & Van Buren 1999; Collins and Clark, 2003). enhanced by employee empowerment which can be explained in terms
But there has been a dearth of in-depth study in analyzing the of social exchange theory.
influence of HPWS on OP specifically in the Indian context. The results
indicate that HPWS are helpful for workers in two situations. First, if Limitation and Future Research Implications
employee autonomy is enhanced, nurturing the utilization of skills This study has been undertaken only in one sector (IT), the findings
which is an outcome of employee autonomy (Felstead et al., 2010). could not be generalized to the other sectors. The sample size is only
High performance work systems are likely to work when culture 211 which could have been bigger. Future researchers can conduct
nurtures fairness in reward management, transparency in study with different sectors and comparatively better sample size. The
communication and focus on employee development (Appelbaum et present study has taken a cross-sectional research design so there may
al., 2000). These factors as well as employee empowerment and be a probability of reverse causation. Therefore, longitudinal research
employee inputs in decision-making process have a positive impact on design is suggested for future studies to take away the impact of
employee well-being. Employee well-being is specifically enhanced reverse causation. The study has empirically evaluated the relationship
when the scope for choice and originality is boosted. between antecedents and outcomes of SHRM but to understand the
The findings of the study highlight that certain HR practices can dynamic processes of antecedents and outcomes of HR systems over a
significantly improve organizational performance. The research period of time. Future research studies can also focus on the
indicates that employees’ perception of the organizational fairness in integration of data analytics into SHRM.
reward management, employee voice and organizational focus on
employee training and development leads to employee well- being ACKNOWLEDGEMENT
which consequently has an impact on organizational performance in
terms of growth rate, market share and productivity. The authors express their sincere gratitude to The Management,
Theoretical Implications: Many researchers have emphasized the Krupanidhi Group of Institutions for supporting the work through
importance of incorporation of HRM in organizational strategic Krupanidhi Research Incubator Centre (K-RIC) program and,
planning (Budhwar, 2000; Andersen et al., 2007) and also researchers Accendere: CL Educate Ltd.
in the same situation, yet despite the importance integration of HR
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