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Article

Role of Organizational Learning and Innovation in between High-performance HR Practices and Business Performance: A Study of Telecommunication Sector

Vision 21(3) 1–15 © 2017 MDI SAGE Publications sagepub.in/home.nav DOI: 10.1177/0972262917716766 http://vision.sagepub.com

Jeevan Jyoti1 Hardeep Chahal2 Asha Rani3

Abstract The purpose of this study is to explore the role of the organizational learning (OL) and innovation as mediators between highperformance human resource practices (HPHRPs) and business performance (BP) in telecommunication sector. Census method has been used for data collection from employees working in telecommunication organizations in Jammu and Kashmir (North India). Reliability and validity have been proven with the help of confirmatory factor analysis. Structural equation modelling has been used for hypotheses testing. The results indicate that OL mediates the relationship between HPHRPs and innovation, whereas innovation does not mediate but moderates the relationship between OL and BP. So the final model evaluated the mediated-moderation effect of OL and innovation in between HPHRPs and BP. The theoretical and managerial implications have also been discussed.

Key Words High-performance Human Resource Practices, Organizational Learning, Innovation, Business Performance

Introduction Knowledge-intensive industry faces a dynamic competitive environment, which has compelled the organizations to adopt the high-performance human resource practices (HPHRPs). The HPHRPs are considered as a set of different HR practices designed to enhance employees’ skills and efforts (Chahal, Jyoti & Rani, 2016; Jeong & Choi, 2016; Mustafa, Richards & Ramos, 2013). Highperformance HR practices are different from traditional HR practices. The former encourages employees to recognize the goals of the organization and work hard to achieve these goals by developing a committed workforce, which is empowered to use its discretion in conducting the tasks in ways that are valuable to the organization (Arthur, 1994). High-performance HR practices produce synergistic effects, which improve the organizational competency (Macduffie, 1995). Though there is no consensus about

HPHRPs in the literature, following practices have been used by majority of researcher as HPHRPs: extensive training (ET) (Huselid, 1995; Khasawneh & Alzawahrez, 2012; Wei, Han & Hsu, 2010), performance management (PM) (Huselid, 1995; Posthuma et al., 2013), performance appraisal (PA) (Posthuma et al., 2013), performance-based compensation (PBC) (Agarwala, 2002; Gupta & Singh, 2010; Gurbuz, 2009; Huselid, 1995; Lopez, Peon & Ordas, 2005; Wei et al., 2010), empowerment (EMP) (Gupta & Singh, 2010; Gurbuz, 2009) and competency development (CD) (Gupta & Singh, 2010). Most of the studies on the relationship between HR practices and business performance (BP) have been conducted in developed as well as developing countries (as cited in Choi & Lee, 2013; Ichniowski & Shaw, 1999; Wei & Lau, 2010). Additionally, all the aforesaid mentioned studies have been conducted in manufacturing companies, banks, universities, health sector, education sector, etc. No

Assistant Professor, PG Department of Commerce, University of Jammu, Jammu, Jammu and Kashmir, India. Professor, PG Department of Commerce, University of Jammu, Jammu, Jammu and Kashmir, India. 3 Research scholar, PG Department of Commerce, University of Jammu, Jammu, Jammu and Kashmir, India. 1 2

Corresponding author: Asha Rani, Research scholar, PG Department of Commerce, University of Jammu, Jammu, Jammu and Kashmir-180006, India. E-mail: [email protected]

2 study related to HPHRPs has been conducted in telecommunication sector in Jammu and Kashmir. Further, Jiang et al. (2013) have reviewed 74 papers out of which 69 papers have focused on mediating variables between HPHRPs/high performance work system/high-performance commitment system/high involvement HR practices and organizational performance. But there is a lack of research regarding the mediated-mediation in this relationship, that is, organizational learning (OL) mediates between HPHRPs and innovation relationship and innovation mediates between OL and BP, which this article proposes to examine.

Literature Review High-performance HR Practices and Organizational Learning HR practices play an important role in the development of OL in present competitive era. Snell et al. (1996) stated that the employees contribute to learn when they have the knowledge and abilities that the company needs and also have the motivation to learn. Previous literature has identified that HPHRPs have positive impact on OL (Camps & Luna-Arocas, 2010; Lopez et al., 2005; Oltra & Algree, 2011). For instance, ET is a key factor related to the achievement of efficient OL. It mainly focuses on overall development of employees in order to improve the learning of the organization. Besides, it also provides a clear understanding of the company’s aims and goals to ensure a right direction for learning processes (Lopez et al., 2005). Further, PA, the another HPHRPs, focuses on long-term objectives in order to recognize acquisition of knowledge and transfer (Lopez et al., 2005; Raj & Srivastava, 2013). On the other hand, PM continuously upgrades knowledge, which helps to generate OL. Evans (2003) suggested that the PM is very significant for the firm to enhance knowledge component (acquisition, distribution, interpretation and organizational memory). Performance-based compensation encourages the employees to hold certain types of job (Gomez-Mejia, Balkin & Cardy, 2001). Lei, Slocum and Pitts (1999) have suggested that organization must set up incentive-based schemes related to fulfilment of goals and creation of knowledge. Further effective reward system also motivates the employees to acquire the knowledge and share it with their colleagues, interpretation and storing of the knowledge for future use. Another HPHRPs, that is, EMP, is equally significant in enriching learning culture in the organization. It gives employees responsibility and authority to participate in decision-making (Karatepe & Vatankhah, 2014), enhances their vision and knowledge, which, in turn, produces a positive effect on organizational learning. Further, it also recognizes the importance of issues such as trust and sharing information, which influence OL (Lopez et al., 2005). Lastly, competence development practice increases the employees’ skill, ability and knowledge (Gupta & Singh, 2010) that help in generating,

Vision 21(3) distributing, transferring and utilizing the knowledge in an organization in general, technical and managerial way. On the basis of above discussion, the next hypothesis framed is: Hypothesis 1: High-performance HR practices significantly affects organizational learning.

Organizational Learning and Innovation Organizational learning is the backbone of innovation. It is the crux of knowledge processing, which is generated through OL (Jimenez-Jimenez & Sanz-Valle, 2011). It is an important variable for the firm that tries to introduce new products/services (Simon, 1991) or create new markets (Garcia-Morales, Jimenez-Barrionuevo & GutierrezGutierrez, 2012). Organizational learning supports creativity, inspires new knowledge and ideas that have potential influence on organizational innovation (Cooke & Beh, 2007; Garcia-Morales et al., 2012). Innovation requires employees to obtain existing knowledge and share this knowledge within an organization (Jimenez-Jimenez & Sanz-Valle, 2011). It also requires the transformation and utilization of existing knowledge. Even Saki et al. (2013) suggested that innovation occurs when employees share their knowledge with each other in an organization and this shared knowledge generates new and common insights. Various researchers have revealed that OL has a positive impact on innovation (Garcia-Morales et al., 2012; Jimenez-Jimenez & Sanz-Valle, 2011; Noruzy, Dalfard, Azhdari, Shirkouhi & Rezazadeh, 2013; Raj & Srivastava, 2013; Salim & Sulaiman, 2011; Saki et al., 2013). The same has been proved in different sectors such as SMEs (Salim & Sulaiman, 2011), education (Saki et al., 2013) and manufacturing (Noruzy et al., 2013). Based on above literature, the next hypothesis is: Hypothesis 2: Organizational learning affects innovation.

positively

High-performance HR Practices, Organizational Learning and Innovation Many researchers have discussed the presence of missing link between HPHRPs and innovation (Oltra & Algree, 2011; Tan & Nasurdin, 2011). The missing link between HPHRPs and innovation illustrates the subsistence of a mechanism/process that completes this link. Organizational learning has been recognized as the fundamental activity for acquiring, creating, transferring and utilizing the knowledge in an organization. Lopez et al. (2005) stated that HPHRPs can contribute to accomplish sustainable competitive advantage with the help the knowledge, skills, attitudes and behaviours that form the basis of OL. They also suggested that HR practices leverage OL in order to influence innovation. Previous studies, namely, Tan and Nasurdin (2011), Oltra and Algree (2011) and

Jyoti et al. 3 Lopez-Cabrales et al. (2009), have explored the role of OL as a mediator between HPHRPs and innovation. The HPHRPs can contribute to improve the new technology through learning process. For instance, ET programmes are crucial for employees to promote the learning process in the organization that improve the innovative activity. Such training programmes motivate the employees to share their experience, generate new knowledge and utilize the gained knowledge that promote business growth (Moorman & Miner, 1998). In the same way, PM emphasizes improvement, learning and development to achieve the organizational goals. Further, appraisal process gives the employees continuous feedback about their competencies and knowledge acquired, which subsequently improves the service quality of the organization (Lopez-Cabrales et al., 2009). Performance-based compensation is essential to motivate the employees to take the challenging work, generate and utilize the knowledge effectively that improves the business technology. In addition to this, empowering employees through participation in decision-making motivate them to bring new ideas and exchange knowledge with each other, which in turn, increases the innovative activity in the organization (Raj & Srivastava, 2013). Lastly, CD enables the organization to retain productive employees by enhancing their knowledge, skill and ability to take up future challenging roles (Agarwal & Ferratt, 1999). Thus, the next hypothesis is: Hypothesis 3: Organizational learning mediates the relationship between high-performance HR practices and innovation.

Innovation and Business Performance Innovation is the key element in the long-term success of a business (Jyoti, Gupta & Kotwal, 2011; Leal-Rodriguez et al., 2015; Mahmoud et al., 2016; Salim & Sulaiman, 2011; Yildiz et al., 2014). It helps to develop new capabilities that lead to competitive advantage and superior performance (Hurley & Hult, 1998). In the same vein, }innovation provides the organization with new means of meeting customers’ demands and desires, which increases the profit, revenue and enhances the market share and sales. Various researchers have identified the significant impact of innovation on BP in terms of profitability, market share and sales growth (Abdi & Ali, 2013), profitability, total sales, growth rate, return on investment, profit ratio and customer satisfaction (Salim & Sulaiman, 2011), market share, profit, productivity, turnover and absenteeism (Jimenez-Jimenez & Sanz-Valle, 2011). Besides this, Salavou (2002) found that product innovation is a significant predictor of BP including return on assets, whereas Yamin, Mavondo, Gunasekaran and Sarros (1997) identified the impact of product innovation and process innovation on BP measures, including, liquidity, leverage activity and return on investment. Further, most of the empirical studies revealed positive relationship between innovation and

performance (Garcia-Morales et al., 2012; Noruzy et al., 2013). The above literature leads to the following hypothesis: Hypothesis 4: Innovation has significant impact on business performance.

Innovation as a Mediator between Organizational Learning and Business Performance As discussed above, OL is related to innovation (H2), which in turn is associated with BP (H4). This hypothetical relevance is mainly consistent for mediation model. In addition to this, previous literature has revealed that OL influences BP directly as well as indirectly through innovation (Garcia-Morales et al., 2012; Jimenez-Jimenez & Sanz-Valle, 2011; Noruzy et al., 2013; Salim & Sulaiman, 2011). Organizational learning permits the organization to strengthen its capabilities that enhances innovation, which in turn improve the performance (Baker & Sinkula, 2002; Stata & Almond, 1989). In the same vein, OL assists to improve the employee capabilities in order to enlarge a systematic innovation process (Husain, Dayan & Benedetto, 2016) which helps to enhance the productivity of the organization (Capello & Lenzi, 2015). Nonaka (1991) revealed that OL provides a platform for firms to acquire, share and utilize the knowledge within the organization, that it facilitates to produce new products or services in the market, thereby superior BP. Salim and Sulaiman (2011) revealed that OL leads to the generation of new knowledge, which is relevant for firm innovation capability that contributes to BP. Innovation depends on the organizational knowledge base generated by OL that facilitates to improve the performance (Saki et al., 2013). In this context, innovation requires the individuals/employees to generate new knowledge and share this knowledge within the organization (Turner & Pennington, 2015), which subsequently improves the BP (Jimenez-Jimenez & Sanz-Valle, 2011). Further, OL is the key element for firms that seek to initiate new products or create new markets because of the necessity to innovate continuously in the organization in order to carry on severe competition (Brown & Duguid, 1991; Salim & Sulaiman, 2011). Based on the above discussion, the next hypothesis is: Hypothesis 5: Innovation influences relationship between organizational learning and business performance.

Research Methodology Sample and Data Collection HR management plays a great role in service sector for increasing the service quality orientation among its

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Figure 1. Theoretical Framework Source: Authors’ contribution.

employees (Wilkinson et al., 2009), which is the fastest growing sector of the Indian economy. The telecommunication sector is a big contributor to GDP in India (Chindo, 2013). The rapid growth of outsourcing industry has resulted in high turnover and skill shortages, as employers are constrained to a limited segment of the labour force (Kuruvilla & Ranganathan, 2010). This problem is being tackled with the implementation of HPHRPs in telecommunication sector (Malik, 2013). Further, Jyoti et al. (2011) have revealed that there is high inclination towards innovation in this sector. For this, it requires skilled and knowledgeable employees. These skilled and knowledgeable employees indulge in continuous learning, share new innovative ideas among employees and management. The HPHRPs help employees to learn and innovate, which in turn affect overall BP. The argument developed here is that HR practices in telecommunication sector play an important role in long-term developmental activities, which are best for organizational performance. Besides this, OL plays a crucial role in enhancing the employees’ knowledge by motivating the employees to acquire and disseminate the new ideas and thoughts with each other in order to advance the new technology and prepare new strategies and plans which help to make advance the organization. Keeping this in view, telecommunication sector employees have been selected for data collection. The data have been collected from six private telecommunication organizations (Airtel, Aircel, Tata-indicom, Idea, Reliance, Vodafone) operating in Jammu and Kashmir (North India). All the middle level employees of selected telecommunication organizations were contacted to generate the research information. Out of 851 questionnaires distributed to the middle level employees, only 246 were returned back. The effective response rate came to 29 per cent. The sample included 79 per cent males, 67 per cent respondents are between 20 and 30 years of age. Majority

of respondents are married and postgraduates (52 per cent) and about 67 per cent have 1–5 years of work experience. Majority of respondents belonged to two income groups that is below `20,000 (41 per cent) and `20,000–40,000 (41 per cent). Rest belonged to above `40,000.

Measures All constructs in the study were measured with five-point Likert-scale, ranging from 5 (strongly agree) to 1 (strongly disagree). Multiple items, adopted from different studies, have been used to measure the selected six HPHRPs. Performance management comprised seven items (Conway & Monks, 2008). The sample item is ‘The opportunities you have in your job to make full use of your skills and abilities.’ Performance appraisal has been measured using 11 items (Chen & Huang, 2009; Som, 2008). The sample item is ‘Appraisal is directly related to performance at work.’ Extensive training consists of four items (Wei et al., 2010). The sample item is ‘Your company provides individuals’ ET programme in order to increase skills.’ Competency development encompasses nine items (Pare & Tremblay, 2000). The sample item is ‘Employees develop their skills in order to increase their chances of promotion.’ Empowerment included six items (Pare & Tremblay, 2000). The sample item is ‘Employees are involved in decision making about company issues.’ Lastly, PBC comprised five items (Lopez et al., 2005; Som, 2008; Wei et al., 2010). The sample item is ‘Your company offers incentives to its employees related to their performance.’ Further, Lopez et al. (2005) scale has been used to measure OL, that is, knowledge acquisition (KA) (Sample item: The company is in touch with professionals and expert technicians), knowledge distribution (KD) (Sample item: All employees are informed about the aims of the company), knowledge interpretation (KI) (Sample item: All the members of the organization share the same aim to

Jyoti et al. 5 which they feel committed) and organizational memory (OM) (Sample item: Databases are always kept up-todate). Furthermore, Kleijnen et al. (2009) and Palacios et al. (2009) scales have been adopted to measure innovation, that is, technical innovation (TI) (Sample item: The use of latest technological innovations in new service development) and non-technical innovation (NTI) (Sample item: Reduction in cost of roaming services). Lastly, Venkatraman and Ramanujam (1986) scale has been used to measure BP (cited in Jyoti & Sharma, 2012) such as financial performance (FP) (Profitability has increased), employee performance (EM) (Level of satisfaction has increased) and operational performance (OP) (Service quality has increased) (Appendix Table A1).

Control Variables Age, qualification, work experience of the respondent, size of the firm and age of the firm have been taken as control variables as these can possibly influence BP (Inmyxai & Takahashi, 2010).

Common Method Variance The common method bias for all the constructs in the study have been examined through common latent factor method (Podsakoff, MacKenzie, Lee & Podsakoff, 2003). The results revealed that there is no item, whose difference is greater than 0.20 (as recommended by Gaskin, 2012a). Therefore, common method bias is not the problem in this study.

Results Before testing the hypotheses, we assessed the reliability and validity of the constructs with the help of confirmatory factor analysis (CFA). CFA was conducted to assess the measurement model fit and structural model has been estimated for hypotheses testing.

Table 1. CFA Results of High Performance HR Practices, Organizational Learning, Innovation and Business Performance Construct

|2/df

GFI

AGFI

CFI

HPHRPs OL INNO BP

1.404 1.776 2.281 2.165

0.900 0.908 0.911 0.926

0.875 0.877 0.874 0.887

0.958 0.917 0.927 0.943

0.030 0.033 0.032 0.034

0.038 0.050 0.076 0.072

Source: Primary data.

Reliability of the constructs has been checked through Cronbach’s alpha and composite reliability. The values of Cronbach alpha and composite reliability equal to or greater than 0.70 indicate good reliability (Hair et al., 2009). In the present study, alpha and composite reliability values of all constructs are greater than 0.70 (Table 2), indicating that the scales are quite reliable. Convergent and discriminant validity has been assessed as a part of construct validity. A scale with 0.5 or above average variance extracted (AVE) and standardize regression weights (SRW) establish convergent validity (Hair et al., 2009). As shown in Table 2, the AVE and standardized loadings of all constructs above 0.5. Further, discriminant validity has also been proved by comparing the average variance extracted with squared correlations among different constructs (Fornell & Larcker, 1981; Hair et al., 2009). The average variance extracted for all the constructs is higher than the squared correlation thereby proving discriminant validity (Table 3). Table 2. Reliability and Validity Analysis of High Performance HR Practices, Organizational Learning, Innovation and Business Performance Construct

Dimensions

SRW

ET PM PA PBC EMP CD

0.845 0.794 0.795 0.856 0.868 0.989

KA KD KI OM

0.919 0.907 0.942 0.799

TI NTI

0.859 0.907

FP EP OP

0.853 0.909 0.902

HPHRPs

Reliability and Validity Second order confirmatory factor analysis (CFA) has been used to test whether a relationship exist between the manifest and latent variables as all constructs used in study are multidimensional. Items with standardized regression weights (SRW) less than 0.50 were deleted (Hair et al., 2009). Goodness of fit of the measurement models has been assessed with various fit indices such as goodness of fit index (GFI), adjusted goodness of fit index (AGFI), comparative fit index (CFI), normed fit index (NFI), root mean square error (RMR) and root mean square error of approximation (RMSEA). All the constructs yielded good model fit indices, that is, GFI, AGFI, NFI and CFI are greater than 0.9 and badness of fit indices, that is, RMR ( 0.05) were examined. In full mediation model, indirect relationship between OL and BP (OL → innovation: SRW = 0.806, p < 0.001 and innovation → BP: SRW = 0.183, p > 0.05) were analyzed. The selection between the three contrasting models has been done on the basis of χ2 difference test (Knepp & Entwisle, 1969), which revealed significant difference between full mediation and no mediation; full mediation and partial mediation models but no significant χ2 difference between partial and no mediation models (Table 5). Further, the goodness of fit indices of no mediation model are better than the full and partial mediation models. This indicates that innovation does not mediate the relationship between OL and BP. Further to check the significance of indirect relationship in full and partial mediation model, Sobel (1982) test was applied through Sobel calculator, which revealed insignificant indirect effect (p > 0.05). Hence, hypothesis 5 stands rejected. We also noticed that in case of partial mediation model, the relationship between mediator and outcome variable became insignificant and relationship between dependent and independent variable increased, which hinted towards moderation of innovation between OL and BP (Hair et al., 2009). Therefore, we have evaluated the moderation of innovation between OL and BP. As innovation is a metric variable so interaction effects have been examined to check

Jyoti et al. 7 Table 4. Comparison of Goodness of Fit Indices of Mediation Models (High performance HR practices, organizational learning and innovation) Model Fully Mediation (I) Partially Mediation (II) No Mediation (III)

|2

D|2

102.428 100.636 53.270

1.792 (I&II) 47.366***(II&III) 49.158*** (I&III)

GFI 0.933 0.932 0.942

AGFI 0.899 0.898 0.889

CFI 0.968 0.967 0.963

RMR 0.013 0.014 0.13

RMSEA 0.065 0.066 0.090

Source: Primary data. Note: ***P < 0.0001.

Figure 2. Mediation Model Source: Authors’ contribution.

Table 5. Comparison of Goodness of Fit Indices of Mediation Models (Organizational learning, innovation and business performance) Model Fully Mediation (I) Partially Mediation (II) No Mediation (III)

|2

D|2

GFI

AGFI

CFI

RMR

RMSEA

36.118 29.186 31.550

6.932***(I&II) 2.364(II&III) 4.568***(I&III)

0.972 0.966 0.981

0.947 0.940 0.958

0.995 0.989 0.997

0.011 0.013 0.012

0.031 0.045 0.026

Source: Primary data. Note: ***P < 0.0001.

the moderation (Jensen, Patel & Messersmith, 2013). Product indicator approach has been used (Jyoti & Dev, 2015; Little, Bovaird & Widaman, 2006) to create latent interaction variable. There are four manifest variables of OL (KA, KD, KI and OM) and two manifest variables of innovation, that is, technological innovation and non-technological innovation, which resulted into eight interaction variables (knowledge acquisition*technological innovation, knowledge distribution*technological innovation, knowledge interpretation*technological innovation, organizational

memory*technological innovation, knowledge acquisition* non-technological innovation, knowledge distribution*nontechnological innovation, knowledge interpretation*nontechnological innovation, organizational memory*nontechnological innovation) representing the latent interaction variable. The results revealed that the interaction of OL and innovation is significantly predicting BP (SRW = 0.61, p < 0.01, Table 7), which proves that innovation moderates between OL and BP relationship. These results have been supported by simple slope analysis too (Figure 3).

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Table 6. Comparison of Goodness of Fit Indices of Mediation Models (Dimension-wise) Model Knowledge acquisition Fully mediation (I) Partially mediation (II) No mediation (III) Knowledge distribution Fully mediation (I) Partially mediation (II) No mediation (III) Knowledge interpretation Fully mediation (I) Partially mediation (II) No mediation (III) Organizational memory Fully mediation (I) Partially mediation (II) No mediation (III)

|2

D|2

DF

GFI

AGFI

CFI

RMR

RMSEA

131.959 62.444 63.624

69.515*** (I&II) 68.335*** (I&III) 1.18 (II&III)

26 25 26

0.895 0.941 0.939

0.819 0.893 0.894

0.902 0.965 0.965

0.042 0.013 0.013

0.135 0.080 0.081

133.981 61.660 71.772

72.321*** (I&II) 62.209*** (I&III) 10.112*** (II&III)

26 25 26

0.892 0.941 0.930

0.813 0.893 0.880

0.898 0.966 0.957

0.045 0.013 0.015

0.137 0.081 0.089

143.062 54.687 56.078

88.375*** (I&II) 86.984*** (I&III) 1.391 (II&III)

26 25 26

0.889 0.947 0.945

0.808 0.904 0.906

0.887 0.971 0.971

0.052 0.012 0.012

0.142 0.073 0.072

127.406 66.714 73.352

60.692*** (I&II) 54.054*** (I&III) 6.638*** (II&III)

26 25 26

0.894 0.938 0.933

0.817 0.888 0.884

0.907 0.962 0.956

0.040 0.013 0.014

0.133 0.087 0.091

Source: Primary data. Note: ***P < 0.0001.

Table 7. Structural Equation Modelling Results for Moderation

OL " BP INNO " BP OL*INNO " BP R2 Covariance OL & INNO OL & OL * INNO OL * INN & INNO

Model I

Model II

Model III

0.75***

0.57*** 0.40**

0.56

0.50

0.84*** 0.55*** 0.61*** 0.74

Source: Primary data. Notes: ***p < 0.001; **p < 0.01.

0.28** 0.31** 0.27***

Mediated-moderation Analysis Further, we tested the integrated model whereby the OL mediates the relationship between HPHRPs and BP in the presence of third variable, that is, innovation (moderator). To test the significance of the mediated-moderation paths, multi-group analysis has been conducted through SEM. The data has centred around the mean of moderating variable, that is, innovation and differences in mediation effects at high and low levels of innovation have been calculated (Kleiman et al., 2013). The results confirmed the mediated moderation as the indirect effect of independent variable (HPHRPs) on dependent variable (BP) in presence of moderating variable (innovation) is significant for both the high and low groups (Table 8), which has been examined with the help of advanced statistical excel tool as recommended by Gaskin (2012b). Table 8. Mediated-moderation Effect

Figure 3. Slope Analysis Source: Authors’ contribution.

HPHRPs OL (Direct effect)

OL BP

Innovation: High

0.78

0.66

Low

0.76

Difference

0.02*

Source: Primary data. Notes: **P < 0.01; *p < 0.05.

Indirect Effect

0.64 (sobel statistic = 3.93) 0.59 0.56 (sobel statistic = 2.89) 0.07* 0.08*

Total Effect 1.42 1.32 0.01**

Jyoti et al. 9

Discussion This article investigates, empirically, the impact of HPHRPs on BP through OL and innovation. Our results revealed that HPHRPs positively affects OL, which is supported by the previous studies as HR practices generate the healthy attitudes in the employees towards learning (Jaw & Liu, 2003). Moreover, HPHRPs prepare employees in the organization for knowledge generation through the sharing of ideas, opinions and experience (Monavvarian & Khamda, 2010). Further, HPHRPs play a crucial role for developing OL (Lopez et al., 2005), which in turn is ultimately leads to innovation (Salim & Sulaiman, 2011). Further, the study found positive impact of OL on innovation, which is in line with previous studies as learning organizations are generally more flexible and earlier to respond to new challenges than competitors (Slater & Narver, 1995). Organizational learning permits the organization to develop the skills and capabilities of employees that enhance the innovation (Jimenez-Jimenez & SanzValle, 2011). They also revealed that innovation requires that acquired knowledge is shared and utilized within the organization. In short, innovation occurs when employees share their knowledge with the firms and this shared knowledge generates new and common insights (Brown & Duguid, 1991; Jimenez-Jimenez & Sanz-Valle, 2011). Furthermore, it is also found that OL mediates the relationship between HPHRPs and innovation. This finding is consistent with the results of Tan and Nasurdin (2011), who suggested that the implementation of higher level of training increases the employees’ requisite skills and their potential to learn. So, they are able to generate new understandings and new ideas that will be valuable for organizational innovation. They also believed that the implementation of higher level of fair PA, the higher level of employees’ motivation towards their tasks. High motivation will help to enhance employees’ willingness to generate new ideas in order to increase administrative innovation. Similarly, organization must provide the incentives to the employees to use and develop knowledge effectively (Lopez et al., 2005) that facilitate to create new products or services. Besides this, encourage the employees to share their ideas with each other (Lopez et al., 2005) in order to innovate the performance of an organizational. Further, dimension-wise mediation of OL has also been examined; different dimensions of OL such as KA, KD, KI and OM partially mediate the relationship between HPHRPs and innovation. The HPHRPs provides a clear understanding about the company’s aims and goals that ensure a right direction for learning processes (acquisition, distribution, interpretation and OM), which in turn enhances the organizational innovation (Oltra & Algree, 2011). Besides this, it has also been found that innovation positively influences BP. This finding is supported by Price, Stoica and Boncella (2013), who described that the implementation of creative ideas leads to growth of BP. In other

words, innovative firm tends to achieve higher growth rate, profitability, increase return on sales and market shares. It also helps to gain better bright future of the organization in order to enhance the BP (Abdi & Ali, 2013). Further, the study also found that innovation does not mediate the relationship between OL and BP. This finding is against the earlier research (Jimenez-Jimenez & SanzValle, 2011; Salim & Sulaiman, 2011). Additionally, the current study found that innovation acts as a moderator between OL and BP. The reason behind is that telecommunication organization is a dynamic organization where OL strengthens the BP with the help of innovation. Hence, the study explains the impact of HPHRPs on BP through mediated-mediation of organization learning and innovation.

Implications Theoretical Implications The study has several theoretical contributions (Figure 1). The study adds to already existing literature on HPHRPs by validating the HPHRPs construct, which can be used by researchers and academicians for future research. The present research is contributing to prior research by providing a support for impact of HPHRPs on BP. The study has empirically established the mediating effect of OL between HPHRPs and innovation. Theoretically, our findings implied that OL acts as a mediating variable between HPHRPs and innovation. We have also evaluated the dimension-wise mediating effect of OL between HPHRPs and innovation. All the dimensions of OL, namely, KA, KD, KI and OM, mediate the relationship between HPHRPs and innovation. Further innovation does not mediate between OL and BP. This finding is contradictory to previous studies. Besides this, innovation act as a moderator between OL and BP. Last but not the least, this study adds a new perspective to the impact of HPHRPs on BP by establishing empirically the moderated-mediation of OL and innovation in between this relationship.

Managerial Implications This study has various implications which are important for practitioners as well as academicians. These are discussed as under: To cope up with technological developments and new innovations in telecommunication sector, job training relating to job instruction, computer-based training, etc. should be provided to the employees on regular basis and need to be implemented more effectively. It will lead to better employee performance through reduced customer complaints, which in turn will improve the BP. This will also help the employees to update and increase their knowledge about latest advancements and enhance their technical competence to cope up with the extant challenges and get them prepared for further promotions. Enhanced competences increase the thinking horizon and vision of the

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employees and hence enable them to think out of box to generate and disseminate more new ideas, which consequently improve the BP. Further, managers should provide employees with EMP and rewards that would make them feel obliged to respond to the organization via prominent levels of work environment and performance outcomes. So, it is suggested that management must empower employees by encouraging them to participate in concerned investment decisions of organizations that can help in accelerating their thought process. Besides, organizations should also make provisions of award for best suggestions to encourage valuable suggestions from the employees and also keep loyalty rewards for employees, who are in organization for long time period. Such awards or rewards can increase employees’ confidence and strengthen their bounding with the organization. Subsequently, this will also increase the employee participation as well as satisfaction in the long period. Based on extant findings, it is also found that job enrichment must be done regularly to increase the competency of the employees. Organization should encourage multitasking approach to enrich the employees’ knowledge about various jobs in the organization and reduces the boredom and make their jobs more interesting. Similarly, KA is found to be an important component of OL. Hence, it is suggested that organizations should organize informal meetings and also invite suggestions from the personnel of the allied industries such as software industries, IT, etc. to generate innovative ideas and information for the core and supplementary services of the telecommunication companies. It is also suggested that organizations should stress on prompt and quick availability of databases to the employees for quick dissemination of available information for

strategic decision-making and improving different organizational processes. It is well established that satisfied employees are productive employees (Saari & Judge, 2004) but the telecommunication employees in our study are found to be less satisfied. So, it is suggested that to improve the level of employees’ satisfaction they should be provided both, the intrinsic and the extrinsic benefits. Intrinsic benefits can be in the form of participation of employees in decision-making, recognition (praise from superiors and co-workers), autonomy, feedback, giving challenging task, achievement, responsibility, personal and professional growth, etc. Whereas extrinsic benefits can be in the form of pay rise, bonuses, paid leaves, competitive salaries, annual recreational plans, fringe benefits, job security, promotions, free Internet facilities, flexi-time/place of work, private office space, social climate, etc.

Limitations and Future Research of the Study All the precautionary efforts were made to ensure the objectivity, reliability and validity of the study, yet certain limitations could not be ruled out. These limitations need to be considered for any future references regarding the findings and implementations of the study. The major limitations are: first, the study has been conducted only in the private telecommunication sector (Airtel, Aircel, Tata indicom, Idea, Reliance, Vodafone) in J&K (North India). For future research, it is suggested to examine the HPHRPs in public sectors such as BSNL and MTNL. Besides this, a comparison between public and private sectors can also be done. Further, the study being limited to telecommunication sector can be extended in other sectors such as

Appendix Table A1. Items of High Performance HR Practices, Organizational Learning, Innovation and Business Performance Variables

Items

Extensive training

Your company offer employees diverse training programme for different training needs. Your organization structures training process systematically. Your company encourages employees to undertake continuous training. Your company provides individuals’ extensive training programme in order to increase skills. The way in which your performance is managed. The information given to you about your job and the ways in which a position can be reached. The opportunities you have in your job to make full use of your skills and abilities. The effort made by the company to promote employees from within the company. The opportunities you have to discuss your job with your manager. Your promotion opportunities. The opportunities that you have to discuss significant aspects of your performance with your manager. Appraisal is directly related to performance at work. Appraisal rating is focused on the individual’s performance not personality. Performance appraisal is based on objective quantifiable criteria. Employee appraisals emphasis long-term and group-based achievement.

Performance management

Performance appraisal

Jyoti et al. 11 Variables

Performance-based Compensation

Empowerment

Competency development

Knowledge acquisition

Knowledge distribution

Knowledge interpretation

Organizational memory

Items Fair appraisal practices for everyone. Employees are appraised by seniors. Employees are appraised by experts. Employees are appraised by juniors. Employees are appraised by customers. Employees are appraised by multiple persons. Employees are appraised by themselves also. Your company offers incentives to its employees related to their performance. Your company has a competency-based pay system. The reward received are directly related to the performance and contribution to work. Your company grants bonuses based on the team performance. Employee’s compensation increase as their performance increases. Employees are involved in decision-making about company issues. Employees have an effective process for making group decisions and solving problems. Employees take steps to solve problems. Employees empowerment is highly valued in the company. Employees are regularly consulted in technological investment decisions in the company. Employees are trusted to make sound professional decisions. Superior usually gives responsibilities to employees according to their respective background and interest. Employees develop their skills in order to increase their chances of promotion. Workshops, conferences and seminars are organised by company to improve the knowledge of employees. Proficiency courses such as specialized technical courses are encouraged by supervisor. Opportunities for advancement within telecommunication professional are available to you. Job rotation is done for employee development. Job enrichment is undertaken to give employee autonomy. Job loading (vertical) is done to make employee multiskilled. Several professional development activities, such as coaching and training, are offered to employees to improve their skills and knowledge. The company is in touch with professionals and expert technicians. The company encourages employee to join formal or informal nets made up by people from outside the company. There is a consolidated and resourceful R&D policy. New ideas and approaches on work performance are experimented continuously. Organization systems and procedures support innovation. Cooperation agreements with other companies, universities, technical colleges, etc., are fomented. The employees attend trade-fairs and exhibitions regularly. All employees are informed about the aims of the company. Meetings are periodically held to inform all the employees about the latest innovations in the company. The company has formal mechanisms to guarantee the sharing of the best practices among the different fields of the activity. There are within the organization individuals who take part in several teams or divisions and who also act as link between them. There are individuals responsible for collecting, assembling and distributing internally employee’s suggestions. All the member of the organization share the same aim to which they feel committed. Employees share knowledge and experience by talking to each other. Teamwork is very common practice in the company. The company develops internal rotation programme so as to facilitate the shift of the employees from one department or function to another. The company offers other opportunities to learn (visits to other parts of the organization, internal training programme, etc.) so as to make individuals aware of other people or departments’ duties. The company has databases to stock its experiences and knowledge so as to be able to use them later on. The company has directories or e-mails filed according to the field they belong to, so as to find an expert on a concrete issue at any time. (Table A1 continued)

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(Table A1 continued) Variables

Technical innovation

Non-technical innovation

Financial performance

Employee performance

Operational performance

Items The company updates its client databases. Databases are always kept up-to-date. All the employees in the organization have access to the organization’s databases. Employees often consult the databases. The codification and knowledge administration system makes work easier for the employees. There is access to the organization’s data base and documents through some kind of network (lotus notes, intranet, etc.) Constant improvement in Internet facility. Improvement in broad band service. Availability of roaming service. The use of latest technological innovations in new service development. Your company is first to introduce technical innovations. Your company is technologically competitive. The speed of new product development. Level of newness in mobile services. The up datedness or novelty of technology used in processes/technique. Reduction in cost of roaming services. Advanced management methods. Change in strategy and way of doing business. Change in organization structure and management systems. Management actively seeks innovative ideas. Your company improves the telecommunication facilities. There is regular change in processes, techniques used. Sales growth has increased. Profitability has increased. Revenue growth has increased. ROI has increased. Level of satisfaction has increased. Employee turnover has decreased. Employee effectiveness has increased. Level of absenteeism has decreased. Employee participation has increased. Overall performance has increased. Number of product/service defects has decreased. Service quality has increased. Number of customer complaints has decreased. Market share has increased.

Source: Secondary data.

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Abbreviation Used in This Paper HPHRPs: High-performance human resource practices ET: Extensive training PM: Performance Management PA: Performance appraisal PBC: Performance-based compensation EMP: Empowerment CD: Competency development OL: Organizational learning KA: Knowledge acquisition KD: Knowledge distribution KI: Knowledge interpretation OM: Organizational memory INNO: Innovation TI: Technical innovation NTI: Non-technical innovation BP: Business performance

FP: Financial performance EM: Employee performance OP: Operational performance χ2: Chi-square df: degree of freedom GFI: Goodness of fit index AGFI: Adjusted goodness of fit index CFI: Comparative fit index NFI: Normed fit index RMR: Root mean square residual RMSEA: Root mean square error of approximation.

About the Authors Jeevan Jyoti ([email protected]) is Senior Assistant Professor at the Department of Commerce, University of Jammu. Her areas of interest are Strategic Human Resource Management, Organisational Behaviour and Entrepreneurship. She has published research papers in prominent international journals like, Personnel Review, Total Quality Management and Business Excellence, Cross Cultural Management: An International Journal, International Journal of Management Concepts and Philosophy, International Journal of Educational Management, IIMB Management Review, Metamorphosis: A Journal of Management Research, Vision- Journal of Business perspective, Annals of Innovation and Entrepreneurship, Journal of Services Research, Global Business Review etc. Hardeep Chahal ([email protected]) is a Professor at the Department of Commerce, University of Jammu. Her research work is acknowledged in refereed international journals like Managing Service Quality, International Journal of Health Care Quality Assurance, International Journal of Pharmaceutical Marketing, Journal of Health Management, Journal of Relationship Marketing, Journal of Indian Business Research, Management Research Review, Total Quality Management and Excellence, etc. and national journals of international repute such as Metamorphosis, Decisions, Vikalpa, Vision, Journal of Services Research indexed in Emerald, Sage, etc. She is serving on the editorial boards of the International Journal of Health Care Quality Assurance (Emerald), Journal of Services Research (IIMT, India) and NICE Journal of Business (Shobhit University, India). Asha Rani ([email protected]) is a Ph.D scholar in Department of Commerce, University of Jammu. Her areas of interest are Strategic Human Resource Management and Organisational Behaviour. She has published papers in international of journals repute like, Global Business Review and Personnel Review.