Participatory HRM and firm performance: Unlocking the box through organizational climate and employee outcomes

Abstract

Purpose

The purpose of this paper is to examine the relationship between participatory HRM and firm performance through a series of mediators.

Design/methodology/approach

Primary data were collected from 569 respondents belonging to 207 organizations operating in India. Structural equation modeling and bootstrapping via PROCESS were used to analyze the hypothesized relationships between participatory HRM and firm performance.

Findings

The study has highlighted that participatory HRM in the form of self-managed teams, flexible work arrangements and empowerment results in better organizational climate, heightened affective commitment, reduced intention to leave and enhanced firm performance. Furthermore, it has been established that organizational climate, affective commitment and intention to leave serially mediate the relationship between participatory HRM and firm performance.

Practical implications

The study gives strong indications that adopting bundle of participatory HRM practices is beneficial for generating positive organizational climate, enhanced employee attitudes and superior firm performance.

Originality/value

By establishing serial mediation through organizational climate, affective commitment and employees’ intention to leave, this study brings new insights into the interpretation of underlying mechanism existing between participatory HRM and firm performance, thus uniquely contributes to the HRM and OB literature.

Citation

Gahlawat, N. and Kundu, S.C. (2019), "Participatory HRM and firm performance: Unlocking the box through organizational climate and employee outcomes", Employee Relations, Vol. 41 No. 5, pp. 1098-1119. https://doi.org/10.1108/ER-05-2018-0147