The Role of High Performance Work Systems and Guanxi: the case of the Chinese Construction Industry

Employees are regarded as a source of competitive advantage, and high performance work systems (HPWS) can contribute to sustaining or improving this advantage. However, the concept of HPWS originated in western organisations and academic literature. The applicability of HPWS in non-Western contexts remains underexplored. While human resources management (HRM) practices are generally understood to be culturally sensitive, HPWS research tends to neglect cultural factors such as Guanxi, a feature of Chinese culture which is still pervasive in Chinese workplaces. This mixed-method case study examines HPWS and Supervisor-Subordinate Guanxi (SSG) in the Chinese construction industry. It explores the relationship between HPWS, SSG, employee voice and employee performance. This study was conducted in two stages. First, a qualitative study explored employees’ perceptions of HPWS and SSG. Interviews were conducted across four organisations, and the resulting data were subjected to thematic analysis. In the second stage, employees and supervisors were surveyed to test the relationships between SSG, perceived HPWS, employee voice and performance. Hypothesis testing was conducted using structural equation modelling with AMOS 26. It was found that SSG positively predicts perceived HPWS, promotive voice and employee performance. Specifically, perceived HPWS mediates the relationship between SSG and prohibitive voice but does not mediate the link between SSG and promotive voice. Moreover, employee voice, both promotive and prohibitive, significantly affects employee performance. This research contributes to theory by expanding the body of knowledge on HPWS, primarily by incorporating cultural context considerations on the role of Guanxi and promotive and prohibitive employee voice. In the Chinese construction industry, the Chinese culture in the form of SSG influences the operation of HPWS and employee performance. This research also contributes to practice by demonstrating that western HRM practices such as HPWS can operate in conjunction with traditional values to contribute to employee performance in Chinese organisations.