Relationship between High Performance Work System and High Performance Organization State Banking Sector in Ampara District

Abstract

This study investigates the relationship between High-Performance Work Systems (HPWS) and organizational performance within the Banking Sector in Sri Lanka. HPWS comprises a set of interrelated human resource practices aimed at enhancing employee competencies, engagement, and commitment, thereby improving organizational effectiveness and efficiency. HR practices, including selective hiring, extensive training, performance-based compensation, and transformational leadership, align with HPWS principles. This practices emphasises fair working practices, equal pay, and a safe working environment, fostering a culture of inclusivity and employee well-being. Training and development opportunities are provided to all employees, ensuring equal access to career advancement. This research aims to empirically examine how these HPWS practices influence organizational performance, offering insights that extend beyond the banking sector to other industries. The study addresses a significant gap in the literature concerning the application of HPWS in transforming organizations into High-Performance Organizations (HPOs). While existing research has predominantly examined individual HPWS practices and their direct impact on organizational performance, there is limited exploration of how these practices collectively foster a high-performance culture within organizations. The study employs a quantitative research design, utilizing structured questionnaires to collect data from a sample of 100 employees across various job roles within branches in the Ampara district. The research investigates the relationships between HPWS components, including staffing, training, compensation, flexible work assignments, and communication, and organisational performance indicators such as employee productivity, job satisfaction, and overall branch effectiveness. Findings indicate that each HPWS element positively correlates with various facets of organizational performance, including employee productivity, job satisfaction, and overall branch effectiveness. Notably, practices that foster employee involvement and continuous development were found to be particularly influential. These results align with existing literature suggesting that HPWS can lead to enhanced organizational performance through improved employee outcomes. Based on these findings, the research recommends that continue to invest in HPWS practices, with an emphasis on aligning them with organizational goals and cultural contexts. This study contributes to the understanding of how HPWS can be leveraged to enhance organizational performance in the Sri Lankan banking sector, offering valuable insights for HR practitioners and policymakers.