A Cross-level Analysis Of High-performance Work Systems On Firm Innovation: Evidence From Ghanaian Professional Service Firms

High-Performance Work Systems(HPWS)is the central element of strategic human resource management and empirical studies on HPWS in the last two decades have produced fruitful results that has extended knowledge on the concept.Although a number of current research have focused on the service industry,the majority of empirical research on the subject have been done on the manufacturing sector.There is therefore the need for more HPWS research to be linked with service firms.Also,researchers in recent years have shifted focus and paying more attention into the studies of how HPWS influences beneficial outcomes such as innovation and creativity.The explanation linking creativity to innovation is that,creativity is vitally about transforming ideas into productive things and promoting these ideas need to be significant in order to capture employees’ innovative capacity to convert them into innovations.According to this reasoning,innovation backed by human resource management practices is critical for organizations to advance their service and manufacturing delivery in order to achieve optimum performance in order to deal with the volatile economic environment of today.Although there has been established empirical and theoretical significance concerning how HPWS has a relationship to firm innovation,its applicability in the service industry is not fully known and researched into.In extension,this relationship’s applicability to Professional Service Firms(PSFs)is duly unknown because even most of the studies linking the HPWS to firm innovation has been done in the manufacturing industry and the hardly scanty studies were done in the western context.Ghana,and as a matter of fact,most of Africa have not seen much studies in this regard as should be.Aside the lack of studies of HPWS in the Professional Service sector regardless of their location around the world,another important gap this research seeks to bridge is the addition of a qualitative data to gain an in-depth perspective into HPWS and firm innovation.Therefore,by the usage of a mixed method approach,this thesis responded to the research suggestions from previous researchers and also went a step further by showing this link in an untapped industry such as that of Professional Service.At the qualitative phase,with a semi-structured interview,the researcher used a face-to-face method to gather how human resource and general managers of Professional Service firms in Ghana perceive HPWS.This study went a step with its qualitative approach to also ascertain from the managers their perception of how human resource practices relate to firm innovation as well as employee creativity and the associated indicators they use to measure these constructs in their firms.At the quantitative phase,this research uncovered the causal mechanisms via which HPWS influences firm innovation.By the utilization of the Resource-Based View(RBV)theory,Social Exchange Theory(SET),and Componential Theory of Creativity(CTC),the quantitative approach part of this study developed a model which was multilevel in nature to ascertain the impact of HPWS practices on both the firm-level and the employee-level towards firm innovation and employee creativity.The basis for the adoption of these theories is for the adequate explanation of the different mechanisms found in the conceptual model buttressing the relationship right from HPWS execution all the way to employee creativity and finally to firm innovation.Again,the rational for adopting these three theories was that,they helped in properly explaining the different levels in the multilevel structure of this research and also provided a unique avenue for both academicians and practitioners alike to identify the relationships between the constructs as explained in this thesis.That is,the RBV was used to interpret the relationship between HPWS Execution and firm innovation through some mediators and a moderator at the firm level.Similarly,SET was used to explain the relationship between HPWS perception and employee creativity through some mediators and a moderator at the individual level.SET and CTC were used to interpret the two relationships hypothesized at the cross-level.Generally,the philosophical assumption behind this study was methodological assumption,backed by pragmatism as the paradigm for the research.This study uniquely avoids the typical method bias resulting from data collection from a single source by gathering from a multi-source.At the firm level,this thesis dealt with intellectual capital resources and collective human capital resource mediating the relationship between HPWS execution and firm innovation.Goal clarity further moderated the relationship between HPWS execution and intellectual capital resources.At the individual or employee level,it dealt with trust in supervisor and employee engagement mediating the relationship between HPWS perception and employee creativity.Organizational culture also moderated the connection between HPWS perception and employee engagement.Finally,at the cross level,whiles trust in supervisor(individual level)mediated the relationship between HPWS execution(firm level)and employee creativity(individual level),employee creativity was also hypothesized to mediate the relationship between trust in supervisor and firmlevel innovation.However,the last hypothesis was not supported.This study makes several contributions which are grouped into methodology,theory and practice.It also outlines some limitations and subsequently takes the opportunity to suggest future research studies to mitigate the limitations as well as expand knowledge about the associative constructs in the literature.This research is among the very first to investigate the mechanisms by which HPWS influences firm innovation and employee creativity in the African context.More so,this thesis by far is among the first if not the very first to gather data from the professional service industry for such a cross level study and therefore extends knowledge in the strategic human resource management field.This research offers empirical evidence on the effectiveness of companies’ HPWS activities in promoting intellectual capital resources and collective human resources as elements that can lead to a higher firm innovation capability.The employees’ trust in their supervisors and their engagement resulting from how employees perceive HPWS can nurture and motivate the workers to be exceedingly creative.