Exploring the Impact of Employee Perceptions of HRM System Strength and Performance Appraisal Quality on Employee Performance: The Role of Non-Work Domain Factors in Cross-Country Settings

Abstract

The aim of this study was to develop an understanding of HRM System Strength features in the context of Pakistan and China. This research has been conducted within Pakistani and Chinese telecommunication organizations to understand how perceptions of performance appraisal quality, HRM System Strength, and non-work domain factors enhance employee performance. To achieve this, a convergent parallel mixed methods approach was adopted involving two concurrent phases of data collection. For a qualitative strand, thematic analysis was undertaken on data collected from 26 (HR Directors, HR Senior managers, and HR Line managers) for developing an understanding of HRM System Strength features in improving employee performance. For a quantitative strand, the study adopted a survey method to test the theoretical model developed. For this, data were collected from (N=734 employees and 116 managers) in Pakistan and China. Overall, a deductive-inductive exploratory research technique was applied with a time-lagged (two-wave) and multi-actor data set. The key findings of the thesis revolve around the importance of delivering high-quality performance appraisals, and the understanding of HRM System Strength features, keeping in view the importance of non-work domain factors. Findings from the qualitative strand of the study suggest that, in the Pakistani and Chinese contexts, when managers deliver feedback with aspects of clarity, regularity, and openness it makes the performance appraisal process significantly effective. Furthermore, the findings highlight that a few features of HRM System Strength such as visibility, relevance, validity, fairness, and agreement had similar meanings in Chinese and Pakistani contexts. However, understandability, legitimacy of authority, instrumentality, and consistent HR messages were understood differently in these countries, both in terms of meaning and terminology. Moreover, the findings highlight that non-work domain factors of spirituality and family structure were identified as a personal resource of employees in both country contexts, while religiosity was considered a motivational resource in only Pakistan but not in China. Furthermore, results from the quantitative strand of the study for two-way and three-way interactions were tested to examine the impact of performance appraisal quality among three non-work domain factors of spirituality, religiosity, and family structure in the presence of the HRM System Strength effect on employee performance. Findings suggest that (1) The PAQ-performance relationship was strengthened by the boundary condition effect of HRM System Strength, (2) Spirituality acted as an important resource for employees in the PAQ-performance relationship, especially at high levels of spirituality, and family structures acted as an important resource as a nuclear family structure and a demand as a joint family structure for employees (3) The performance of employees is enhanced significantly through three-way interaction effects, the two strongest effects are recognized with the conditions of high-HRM System Strength and with the nuclear effects of family structures, whereas (4) The three-way interaction between performance appraisal quality, HRM System Strength, religiosity, and spirituality were found to be unimportant factors in enhancing employee performance. Together, the present study highlights performance appraisal quality as an important HR practice that is particularly likely to enhance employee performance with higher (rather than lower) HRM System Strength and differentially with the higher two-way effects of non work domain factors. Based on the findings, insights are offered to guide policymakers to adequately train managers in technical skills of clarity, regularity, and openness, essential for delivering feedback to make the performance appraisal process effective and practically help HR managers by shifting their attention to the system's overarching message and intended purpose, instead of concentrating on the content of HRM.