Investing in Employees Offers a Competitive Advantage

Topic(s): culture, job performance
Publication: Journal of Applied Psychology
Article: Impact of High-Performance Work Systems on Individual- and Branch- Level Performance: Test of a Multilevel Model of Intermediate Linkages
Authors: S. Aryee, F.O. Walumbwa, E.Y. M. Seidu, L.E. Otaye
Reviewed by: Lauren A. Wood, M.S.

With the rapid growth of global competition and the speed with which competitors can imitate products and technology, organizations are turning to human capital to differentiate themselves. As such, researchers and practitioners have stressed the value that employees play in creating and sustaining an organization’s competitive edge. As a result, many organizations have implemented high-performance work systems (HPWS), which are HR programs closely linked to the goals and culture of the organization that are designed to develop employee skills and organizational commitment in order to create a self-sustaining competitive advantage.


With a sample of 37 branches of two banks, researchers (Aryee et al., 2012) tested a model linking HPWSs and performance to performance outcomes. They based the model on empowerment theory, which centers on redesigning work to minimize top-down control and allow for greater decision-making autonomy in lower rungs of the organizational ladder. In general, the model proposes that HPWS leads to greater empowerment, and more empowered employees lead to increased customer service and branch performance. The authors indeed found that usage of HPWPs has an influence on performance outcomes on the individual level and at the branch level. Generally speaking, HPWPs were associated with greater employee or team empowerment, which partially explained why the employees performed better.


Taken together, organizations can benefit from designing HPWS based on the goals and culture of the company. The findings indicate that investing in employees pays off in increased individual level and group level performance. Investing in people can be the key that differentiates your organization from the competition.


Aryee, S., Walumbwa, F. O., Seidu, E. Y.M & Otaye, L. E. (2012). Impact of high performance work systems on individual and branch-level performance: Test of a multilevel model of intermediate linkages. Journal of Applied Psychology, 97, 287-300.