High performance work system and HCN performance

a r t i c l e i n f o Keywords: High performance work system Host country nationals Relational psychological contract Job performance This study argues that multinational corporations (MNCs) which implement high performance work system in their host country nationals may help their workers form relational psychological contracts with the MNC. Such practices can increase host country national work involvement and enhance their job performance. With survey data from 1084 host country nationals in 49 Taiwanese MNCs operating in China, this study uses structural equation modeling to examine the interdependent and simultaneous relationships between MNC implementation of high performance work system with host-country nationals, the formation of a re-lational psychological contract, work involvement, and host-country national job performance. Findings demonstrate that the relational psychological contract and work involvement are partial mediators in the relationship between high performance work system and job performance. The results show that MNCs can expect better job performance from host country nationals when implementing high performance work systems with these workers. To implement global strategies, multinational corporations (MNCs) need to operate in many countries (Gomez & Ranftb, 2003; Pereza & Pla-Barberb, 2005). Effective management of host country personnel to help MNCs attain strategic goals has become an important issue for MNC managers as well as for scholars (Gomez & Wernerb, 2004; Lavie & Fiegenbaum, 2003). However, extant research on the management of host-country nationals (HCNs) tends to focus on HCN's relationship with expatriate adjustment 2007). These studies cannot tell MNC managers how they can effectively manage their host country nationals to enhance HCN job performance. Another strain of research about HCN management discusses whether the MNC should adopt HR practices that are convergent with or divergent from those exercised in the MNC's headquarters (Jain, Lawler, & Morishima, 1998). Few extant studies have specifically examined the effect of MNC HR practices on HCNs. Responding to previous authors who have argued that MNCs should develop HCN abilities through various HR activities to replace the use of expensive expatriate personnel (Bartlett, Lawler, Bae, Chen, & Wan, 2002), this study explores the effect of MNC implementation of high performance work system (HPWS) with HCNs in China. This study follows the assertions of strategic human resource management (HRM) scholars (Huselid, 1995) and argues that the MNC can expect better work performance from HCNs if the MNC implements an HPWS with its HCNs. While the behavioral scholars of strategic HRM …