High commitment work system and firm performance: impact of psychological capital and environmental uncertainty

Abstract

Our study of a northern China sample of CEOs, middle managers and frontline employees matched across 114 firms investigates the relationship between a high commitment work system and firm performance from an organizational perspective by considering the mediating role of collective psychological capital (PsyCap) and the moderating role of environmental uncertainty. The effect of a high commitment work system on firm performance was fully mediated by collective PsyCap, while environmental uncertainty moderated the effect of collective PsyCap on firm performance such that firm performance was stronger when environmental uncertainty was higher. We contribute to the developing body of work using collective PsyCap as a mediator for the high commitment work system–performance relationship at the organizational level. Our selection of environmental uncertainty as a moderator responds to the call for research on potential moderators and more consideration of context. We discuss our study's managerial implications and limitations.

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