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How and when service-oriented high-performance work systems foster employee service performance: a
test of mediating and moderating processes
Zhen Wang, Haoying Xu,
Article information:
To cite this document:
Zhen Wang, Haoying Xu, (2017) "How and when service-oriented high-performance work systems foster employee service
performance: a test of mediating and moderating processes", Employee Relations: The International Journal , Vol. 39 Issue:
4, doi: 10.1108/ER-07-2016-0140
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http://dx.doi.org/10.1108/ER-07-2016-0140
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processes
Abstract
Purpose The purpose of this paper is to investigate how and when service-oriented
employees and their supervisors across 92 branches of a large bank in China. The hypotheses
Findings The results suggested that service-oriented HPWS affects employee service
performance via its simultaneous impact on employees service ability, customer orientation, and
service climate perception. Moreover, the indirect effects of HPWS on service performance via
service ability and customer orientation are significant only when service-oriented HPWS
consensus is high.
should invest in service-oriented HRM practices to improve all of their service ability, customer
orientation, and service climate perception, making them able to, willing to, and having the
chance to perform high-quality service performance. Organisations should also pay attention to
AMO theory
As the service industry is thriving and characterised by increasingly fierce competition, the
customer satisfaction, customer loyalty) and organizational financial performance (e.g., sales
growth, revenue growth, and profit growth) (Hong et al., 2013; Ostrom et al., 2015). Against this
garnered great interest from researchers and practitioners in both management and marketing
disciplines (see Bowen et al., 2016; Subramony and Pugh, 2015 for reviews).
One stream of research has focused on the important role of human resource management in
experiences at work and, arguably, will affect their subsequential performance during the service
delivery process (Schneider and Bowen, 1993). Previous studies have provided both theoretical
and empirical support for the positive effect of generic HRM practices on employees and
organizations service outcomes (e.g., Batt, 2000; Bowen and Pugh, 2009; Zerbe et al., 1998).
Recently, researchers extend this research stream by shifting the focus from generic HRM
a bundle of HRM practices oriented toward the delivery of high-quality performance (Liao et al.,
2009) and is demonstrated to have a closer relationship with service outcomes than generic HRM
practices (see Hong et al., 2013 for meta-analysis). Relying on human capital theory (Jiang et al.,
2015), empowerment theory (Aryee et al., 2012), climate theory (Chuang and Liao, 2010; Jiang
2
et al., 2015), and theory of performance (Aryee et al., 2016; Liao et al., 2009), researchers have
provided valuable insights into how service-oriented HPWS is translated into superior service
performance. Despite these, more research is needed to provide a more complete understanding
First, in spite of mediators that have been tested, the knowledge of the mechanisms underlies
the service-oriented HPWSservice performance relationship remains fragmented. That said, the
mediators that have been tested can be integrated as the ability, motivation and opportunity
HRM practices affect individuals performance outcomes through their impact on employees
ability, motivation, and opportunity to contribute (Appelbaum et al., 2000; Lepak et al., 2006).
Specifically, human capital (Aryee et al., 2016; Liao et al., 2009), collective customer knowledge
(Jiang et al., 2015), and service competency (Chao and Shih, in press) can be categorised as
ability; service orientation (Aryee et al., 2016), perceived organisational support, and
psychological empowerment (Liao et al., 2009) can be categorised as motivation; concern for
customer climate (Chuang and Liao, 2010) and service climate (Jiang et al., 2015) can be
categorised as opportunity. Regretfully, there has been no study simultaneously incorporating all
three AMO components as multiple mediators to examine their mediating effects, thus unable to
service performance and whether all three AMO components, i.e., ability, motivation and
opportunity, play vital roles in translating service-oriented HPWS into service performance.
3
Indeed, a recent influential HRM review has highlighted this issue and called for more efforts in
examining the mediating role of all three AMO elements of employee performance (Jiang et al.
2013, p.1471). Therefore, our first purpose is to incorporate all AMO components as multiple
mediators in a single study to offer a more complete understanding of the underlying mechanisms
that link service-oriented HPWS with employee service performance. Following the contention
of Subramony and Pugh (2015, p.360) that human capital resources, attitude, and climate are
indicative of ability, motivation, and opportunity within the AMO model, we examine the
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mediating roles of service ability (i.e., a kind of service-specific human capital resource),
customer orientation (i.e., a kind of service-specific attitude), and service climate perception.
relationship is still unclear (Hong et al., 2013). Although previous studies have provided
valuable insights into the underlying mechanisms of the relationship, less has investigated its
boundary conditions (see Chao and Shih, in press; Hong et al., in press; Jiang et al., 2015 for
HPWS is and is not effective in fostering employees service performance. Integrating the
content- and process-based approaches of HRM research (Bowen and Ostroff, 2004), we posit
that the effect of service-oriented HPWS (the content of HRM system-i.e., the extent to which the
set of HRM practices adopted are driven and revolve around the specific strategic goals of the
subsequently the service performance might be contingent upon the consensus of employees
service-oriented HPWS perceptions, which reflects the process of HRM practices-i.e., the extent
4
to which HRM practices are designed and implemented effectively (Ostroff and Bowen, 2016;
Russo et al., in press). Our position is based on the contention that in an effective HRM system,
both goal-specific HRM content and well-implemented HRM process are both indispensable
elements (Aksoy and Bayazit, 2014; Katou et al., 2014; Pak and Kim, in press; Sanders et al.,
2014).
In general, this study aims to examine how and when service-oriented HPWS fosters
employee service performance (see Figure I). By doing so, we contribute to the literature in at
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least three ways. First, by simultaneously incorporating all three AMO components as the
employee service performance and whether all the three intermediate processesability,
motivation, opportunityare playing critical roles in the process. Second, by integrating both
content- and process- based approaches of HRM research and examining the moderating role of
HPWS consensus, our study advances the knowledge of when service-oriented HPWS is more or
less likely to foster employee service ability, service motivation, service opportunity, and
subsequently service performance.Third, by considering both the level and the consensus of
group members HPWS perceptions, we extend the growing but still limited body of group-level
HRM research.
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2. Theory and hypotheses
a function of three essential components: ability, motivation, and opportunity (Jiang et al., 2012).
Specifically, ability indicates the knowledge, abilities and skills which are necessary to achieve
superior work performance; motivation is defined as the desire and willingness to perform the job;
opportunity refers to the environmental and contextual mechanisms that enable action and
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provides the necessary support and avenues for the expression of the action (Appelbaum et al.,
2000; Boxall and Purcell, 2003; Lepak et al., 2006). As to how the three components influence
work performance, there are mainly two schools of thought. The earlier scholars have theorized
the complementary interpretation of the AMO model (Blumberg and Pringle, 1982), which can be
reflected by the following function: Performance = f (A*M*O). They argue that in order to
achieve good performance, the three components, i.e., ability, motivation, and opportunity must
all be in presence, and the absence of one component would result in the failure of the
performance (Blumberg and Pringle, 1982). In contrast, the other scholars support the additive
approach of the AMO model (Boxall and Purcell, 2003; Lepak et al., 2006), reflected by the
function: Performance = f (A+M+O). This perspective holds that each component can have a
direct and independent effect on performance. That said, the increase of one component can lead
AMO framework theorizes that human resource management practices can affect employees
ability, motivation, and opportunity, thus exerting a positive influence on their work performance.
6
Empirically, previous research has provided support for this theorization by using AMO model as
the overarching framework and incorporating the A, M or O component as the mediators of the
HRM practices-performance link (see Jiang et al., 2012 for a meta-analysis). However, few
studies have incorported all three AMO components into one single study to demonstrate whether
the three components play critical roles in linking HRM practices and performance outcomes,
thus failing to offer us an more integrated picture of how HRM practices influences performance
(Jiang et al., 2013). This is also the case in the servcie-oriented HPWS and service performance
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relationship.
employees service performance (e.g., Aryee et al., 2012, 2016; Liao et al., 2009). Specifically, in
the service-oriented HPWS, the training system provides employees with development programs
to improve their service-related knowledge, abilities as well as skills, while helps employees able
to deliver excellent service performance; the performance appraisal and compensation system
reflects a particular focus on service and thus stimulates employees motivation to deliver
high-quality service; the job design and involvement system will offer employees more
opportunities to engender higher-quality service performance (Hong et al., 2013; Liao and
Chuang, 2004).
supporting the relationship is fragmented. Starting from this research gap, we draw on AMO
model and simultaneously examine the mediating roles of three domian-specific AMO
7
components-i.e., service ability, service motivation and service opportunity in the relationship
between service-oriented HPWS and frontline employee service performance. Based on the
definition of the three general AMO components, service ability is defined as employees
knowledge, abilities and skills to deliver superior service and engender customer satisfaction;
service motivation refers to employees motivation and willingness to deliver high-quality service
contextual mechanisms that enable high service performance and provides the necessary support
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and avenues for the expression of the performance (represented by service climate in this study).
Given that the additive approach has been widely accepted by the mainstream HRM research
(e.g., Jiang et al., 2013; Lepak et al., 2006; Liao et al., 2009), we also adopt this approach of the
AMO model.
According to the human capital perspective of strategic HRM research, knowledge, skills, and
abilities (KSAs) are essential, and it is through these KSAs that HPWS exerts influence on
employee performance (Barney, 1991). In the current study, we examine service ability as a
pivotal mediator in the relationship between service-oriented HPWS and employee service
performance. The service ability we focus here is s a domain-specific form of ability and captures
employees overall KSAs to deliver superior service and engender customer satisfaction.
Compared with customer knowledge or expertise (Jiang et al., 2015), our service ability is
broader and hence is more likely to be associated with HPWS (as antecedents), and service
comprising service-oriented HPWS, staffing and training are the two most related to the
enhancement of employees service ability (Jiang et al., 2015). Staffing practices are conducive to
when assessing candidates, and making hiring decision based on the results of the above. The
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training practice contributes to employees service ability after their entry into an organisation.
Through training, employees are expected to be informed regarding what constitutes excellent
service, how to communicate and interact with customers effectively, and how to cope with the
emergencies which may arise in the service context. Besides the two, other practices are also
important to employees service ability (Aryee et al., 2016; Jiang et al., 2015). For instance,
performance appraisals and compensation practices will motivate employees to improve their
service ability; job design and involvement practices will provide a multitude of opportunities for
Further, strong service ability will translate service-oriented HPWS into high-level service
performance. Several studies have offered evidence for this. For instance, Liao et al. (2009)
found that human capital is one of the important intermediate mechanisms linking HPWS to
service performance. Service ability reflects the service-specific human capital, thus arguably
9
H1. Employees service ability mediates the relationship between service-oriented HPWS
Customer orientation refers to the importance that individuals place on understanding and
meeting customers needs and expectations regarding products and services and the extent to
which individuals are willing to devote extra efforts to satisfying the customers needs (Kelley,
1992). It has generally been recognized that customer orientation, a kind of service-oriented
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attitude, can be reflective of employees strong motivation to deliver high-quality service (e.g.,
Grizzle et al., 2009; Liao and Subramony, 2008). In the current study, customer orientation
represents the motivational process through which service-oriented HPWS exerts influence on
employee service performance. We recognize that just like service orientation (a conceptually
similar construct), customer orientation can also be conceptualized as a form of human capital
(e.g., Ployhart et al., 2009). However, drawing on Ployhart and Moliternos (2011) distinction
between can do (ability) and will do (willingness) human capital characteristics and
consistent with the work of Aryee et al. (2016), we argue that the will-do attribute of customer
Through several different practices, service-oriented HPWS can help create more
attitude is an essential job requirement, and candidates chosen usually rank highly in this regard.
Second, training practices make salient the importance of a customer-oriented attitude in the
service context, and employers aim to instill such an attitude in employees through relevant
10
training programs. Third and the most importantly, performance appraisal and compensation
practices link employee rewards directly to service performance, which serves as a strong
and information sharing will help employees understand the importance of a customer-oriented
attitude in the pursuit of excellent service delivery and organisational profits, which in turn
customer-oriented behaviours and further promote high-quality service delivery (Brown et al.,
2002). In one respect, highly customer-oriented employees place a strong emphasis on customers
needs and expectations during interaction. As such, they will be motivated to work hard in order
to meet those needs and expectations, essential to the goal of promoting customer satisfaction
(Franke and Park, 2006). In another respect, they have strong motivation to engage in and enjoy
building long-term relationships with customers. During interactions with customers, they might
make extra effort to assist them with difficulties or recommend products and services they might
like but not be aware of (Susskind et al., 2003). As a result, all these extra efforts will ensure the
Service climate refers to employees perception of the importance in meeting customers need
effectively (Schneider et al., 1998, p. 151). In organizations characterized by high level of service
11
climate, employees will anticipate that the behaviors which help to improve customer service
quality would be expected, rewarded, supported by the procedures and practices of the
organizations (Schneider et al., 1998, 2000). Service climate has been shown as a crucial factor
through which HPWS is associated with units service performance (Hong et al., 2013). Based on
the definitions of service opportunity and service climtae, and in line with the contention of
Subramony and Pugh (2015, p.360), we propose that service climate (Burke et al., 1992)
represents the opportunity process for shaping the effect of service-oriented HPWS on employee
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service performance. Specifically, service climate can reflect the favourable climate (contextual
mechanism) that enables high service performance and provides the necessary support for the
First, service-oriented HPWS can help employees perceive a positive service climate in the
workplace. The HPWS system can be seen as a symbolic signaling system sending messages as
to which behaviours are expected, encouraged, and rewarded in order to help employees make
sense of their organisational situation (Bowen and Ostroff, 2004). In a similar vein,
service-oriented HPWS might serve to signal and convey the message to employees that superior
service delivery is valued, expected, and rewarded in the working group; such a message, in turn,
will facilitate the creation of a service climate (Chuang and Liao, 2010; Jiang et al., 2015).
Indeed, a recent meta-analysis (Hong et al., 2013) provides ample evidence that service-oriented
HRM practices is conducive to fostering a favourable service climate at the collective level. Since
it is individuals psychological service climate (i.e., service climate perception) that formulate the
collective service climate (Burke et al., 1992), it is more reasonable to postulate the association
12
of service-oriented HPWS with employees service climate perception (Lepak et al., 2006;
Further, when employees perceive a climate supporting high-quality service, they will be
more likely to deliver this to customers (Bowen and Schneider, 2014). One explanation is that
recognition of a strong service climate might better enable employees to perform well in service
delivery (Subramony and Pugh, 2015). First, the perception of a high value placed on service
signals that attitudes and behaviours which are conducive to the delivery of superior service are
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expected, encouraged, and rewarded by the service organisations (Schneider et al., 1998). Such
organisational support for their exhibition of superior service. Second, a favourable perception of
the service climate will show employees that their workplace gives priority to the delivery of
excellent service and provides all kinds of assistance to enable them to do so. Taken together,
them feel supported in achieving high levels of service performance (Hong et al., 2013).
Thus far, we have proposed how employees shared perception of service-oriented HPWS may
impact their provision of excellent service through service ability, customer orientation and
perceived service climate, with the idea that employees in the same group will reach a collective
perception of service-oriented HPWS which may further affect service-related outcomes (Liao et
13
al., 2009). This idea is consistent with earlier research showing that there is variability in HPWS
perceptions at the group level within an organisation (Arthur and Boyles, 2007; Nishii and Wright,
2008). However, there is emerging evidence to suggest that HPWS might be perceived and
interpreted idiosyncratically by employees, and this will lead to variability in HPWS perceptions
even within the same group (Jiang et al., 2017; Lepak et al., 2006; Nishii and Wright, 2008). That
suggests that two groups, which have the same level of aggregated service-oriented HPWS
perceptions, might differ dramatically in the extent of variability in perceptions. Nishii and
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Wright (2008, p. 226) further noted that this variability should be taken into account when
examining the HRM-performance relationship and that it may operate as a moderator between the
HPWS consensus (the obverse of variability) between service-oriented HPWS and employee
service excellence.
Indeed, consensus in employees HPWS perceptions is also one of the major concerns of the
process-based approach of HRM research (Russo et al., in press; Suess et al., 2014; Ostroff and
Bowen, 2016). In contrast to the traditional content-based approach, which concentrates solely on
the inherent virtues of HRM practices, the process-based approach emphasizes the variability in
(a) psychological processes through which employees attach meaning in HRM practices, and (b)
employees perceptions and reactions to the practice when it comes to explaining the effect of
HRM practices (Bowen and Ostroff, 2004). According to the literature, consensus among
employees views of HRM content can be seen as a key indicator that HRM systems are strong
and well implemented within the organisation (Aksoy and Bayazit, 2014; Sanders et al., 2014).
14
When a high level of consensus is reached, HRM systems will create a stronger dynamic and
function more effectively. In contrast, great disparity in employees perception of HRM practices
will make it difficult for HRM practices to be effective (Jiang et al., 2017; Nishii and Wright,
2008; Wright and Nishii, 2013). To summarize, good content of HRM systems (content-based)
order to promote HRM effectiveness (Katou et al., 2014; Suess et al., 2014).
orientation, and service climate perception. Specifically, when consensus regarding HPWS
positive effects on employees service ability, customer orientation, and perception of service
climate, whereas when the level of consensus regarding the perceptions of HPWS is low (i.e.,
making its effects weaker. Integrating this argument with H1, H2, and H3, we expect to observe
service-oriented HPWS on employee service performance via employees service ability (H4a),
3. Method
15
We conducted our research in a large banking firm in China. The firm has 120 sub-branches and
976 frontline customer contact employees (e.g., front-desk clerks) in total, of which we
approached approximately 100 sub-branches. Each branch operates independently and consists of
a supervisor and a number of frontline service employees. To guarantee a high response rate, we
collected the data through alumni contacts and personal social network. For each sub-branch, the
research assistant communicated with the branch directors by phone and explained the purpose of
To ensure the effectiveness of the survey, we distributed and collected the questionnaire in
person during working hours. To avoid common method bias, we administered two different sets
questionnaire was a cover letter that explained the purpose of the research, and assured
participants that individual responses would remain confidential and that they could withdraw at
any time. Supervisors reported employee service performance, while employees rated
service-oriented HPWS, service ability, customer orientation, and perceived service climate.
collected, with a response rate of 92.5% from employees, and 90.1% from supervisors. Among
supervisors, 52% were male, with an average age of 40.09 (SD = 5.90) and an average tenure as
supervisor of 2.64 years (SD = 1.19). Among employees, 39% were male, with an average age of
31.95 (SD = 6.65) and an average dyadic tenure with supervisors of 2.37 years (SD = 1.13).
3.2 Measures
16
Unless otherwise indicated, all response scales for the measures were on a 1=strongly disagree to
and employee-perceived HPWS and that it is the latter that matters to employees (e.g., Liao et al.,
2009). Specifically, employees assessed service-oriented HPWS according to the scale presented
by Chuang and Liao (2010). Since the original scale mixed general HPWS and service-oriented
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HPWS, we invited two outside experts to evaluate each item and choose those that best capture
the nature of service-oriented HPWS in a banking context. This procedure yielded nine items.
These items covered all of the original subscales including staffing, training, involvement and
Our branch selects the best all-around candidates when recruiting employees and Our branch
gives special rewards to employees who are excellent in serving customers. Before we
within-team agreement (rwg) (James et al., 1984) and two intra-class correlation coefficients: ICC
(1) and ICC (2) (Bliese, 2000). Mean rwg of the 92 teams was 0.90, surpassing the recommended
cutoff value of 0.70 (LeBreton and Senter, 2008). The ICC (1) and ICC (2) value were 0.38 and
0.79, surpassing the recommended cutoff value of 0.12 (Glick, 1985; James, 1982; Pak and Kim,
in press) and 0.70 (LeBreton and Senter, 2008) respectively; and service-oriented HPWS varied
significantly across branches (F = 4.72, p < 0.01), also supporting the aggregation of
17
service-oriented HPWS (Bliese, 2000). The Cronbachs alpha of the scale after aggregation was
0.94.
press). We did not use rwg, an intuitively more direct index, because in light of several
methodological concerns, Schneider et al. (2002) suggested using the SD instead of rwg to assess
the consensus of perceptions. A recent simulation study by Roberson et al. (2007) also concluded
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that SD performs better than rwg when modeling and detecting the effects of interactions. Since
high SD values represent large variability, these values were multiplied by -1 so that high values
Service ability. A self-developed four-item scale was use to assess employees service
ability. Items included I am able to deliver satisfactory services to customers, I know effective
ways to providing customers with satisfactory services, I am good at solving all kinds of
difficulties which customers encounter, and It is very easy for me to deliver satisfactory
services to customers. The Cronbachs alpha of the scale was 0.86. To check the construct
validity, we performed exploratory factor analysis using the principal component method with
the number of factors not specified. The results based on oblimin rotation revealed the emergence
of one dimension, with items loaded nicely on the factor. The factor explained 72.06 % of the
Customer orientation. According to Stock and Hoyer (2005), customer orientation has two
attitude with the five-item scale of Susskind et al. (2003). One sample item was I believe that
providing timely, efficient service to customers is a major function of my job. The Cronbachs
according to the seven-item scale of Schneider et al. (1998). One sample item was The
leadership shown by management in our branch in supporting the service quality effort is
Service performance. Service performance was assessed with five items from Liao and
Chuangs (2004) scale. Sample items included This employee asks good questions and listen
attentively to find out what a customer wants. The Cronbachs alpha of the scale was 0.92.
At level 1, we controlled for employee age, gender, and educational level. Age was measured in
years. Gender was coded as 1 = male and 2 = female. Educational level was coded into four
degree or higher). At level 2, we controlled for supervisor age, gender, educational level, and
servant leadership. We assessed servant leadership with the seven-item used by Liden et al.
(2014). One sample item was My leader puts my best interests ahead of his/her own. Mean rwg
(0.92), ICC1 (0.58), and ICC2 (0.89) values provided support to the aggregation from employees
19
report of servant leadership at the branch level (James, 1982; LeBreton and Senter, 2008).
Given the nested nature of the data, to account for potential non-independence effects, we
conducted multilevel modeling to test the hypotheses. To test the cross-level mediation effects
(H1-H3), we followed the recommended method suggested in Zhang et al. (2009) and estimated
the indirect effects based on a 2-1-1 path-analytical model (2 refers to variables at level 2, while 1
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refers to variables at level 1) using Mplus 7.0 (Muthn and Muthn 1998-2012). Specifically, the
estimated path-analytical model with three cross-level paths linking service-oriented HPWS and
service ability (path a1), customer orientation (path a2), and service climate (path a3), and three
single-level paths linking service ability (path b1), customer orientation (path b2) as well as
service climate (path b3) and employee service performance (after controlling for the group-mean
centered service ability, customer orientation and service climate), respectively. The proposed
mediation effects were examined through estimating the three indirect effects linking
service-oriented HPWS and employee service performance: a1*b1, a2*b2, and a3*b3
respectively. To examine the significance of each indirect effect we estimated, we followed Selig
and Preachers (2008) method and conducted a Monte Carlo simulation (i.e., a form of parameter
bootstrapping) with 20,000 replications, which provided an estimate of the confidence interval
H4a-4c proposed three moderated mediation models. Following the methods as were
suggested in Preacher et al. (2007), we conducted three separate path-analytical models through
20
Mplus 7.0 to estimate the conditional indirect effects we hypothesized. Specifically, we built
upon the 2-1-1 model as was used in testing H1, H2 and H3, and added the moderator (i.e.,
examining the conditional indirect effects, we computed the indirect effects at higher (+1 SD) and
lower (-1 SD) levels of the moderator following the equations given in Preacher and coauthors
(2007) and compared the conditional indirect effects. Following the recommendations in
Hofmann and Gavin (1998), we centered the predictor (i.e., service-oriented HPWS) and the
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moderator (i.e., service-oriented HPWS consensus) according to its grand mean (i.e., grand mean
centering) in doing these analyses, which helps reduce potential problems associated with
multicollinearity.
4. Results
We conducted confirmatory factor analyses (CFAs) to compare the measurement model and to
examine the distinctiveness of the six variables (service-oriented HPWS, servant leadership,
service ability, customer orientation, service climate perception, and service performance). The
results indicated that the theorised six-factor model provided a good fit with the data (2 =
2570.85, df = 614, CFI = 0.97, TLI = 0.97, RMSEA = 0.08, SRMR = 0.05) and showed a
significantly better fit than the five-factor model (2(5) = 927.16, p < 0.01), four-factor model
(2(9) = 1930.69, p < 0.01), three-factor model (2(12) = 2897.72, p < 0.01), two-factor model
(2(14) = 3764.04, p < 0.01), and single factor model (2(15) = 4985.77, p < 0.01). Given these
21
results, the theorised six-factor model was superior in fit to all the alternative models, and
-------------------------------------------------------------
Insert Table I about here
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The means, standard deviations, and correlations among variables are presented in Table II.
-------------------------------------------------------------
Insert Table II about here
-------------------------------------------------------------
Before testing our hypotheses, we examined whether there was significant between-group
(2 = 0.20,00 = 0.13, 2 = 431.24, p < 0.01; ICC1 = 0.39, indicating that 39% of the variance
can be attributed to the group level), justifying the appropriateness of using hierarchical linear
modeling. We first tested the effect of service-oriented HPWS on employee service performance
with previous studies (e.g., Aryee et al., 2016; Liao et al., 2009), service-oriented HPWS
significantly predicted frontline employees service performance (B = 0.37, p < 0.01, Model 1 in
Table III), even after controlling for the variables at both the individual level (employee age,
22
gender, education) and the group level (supervisor age, gender, education, and servant
leadership).
-------------------------------------------------------------
Insert Table III about here
-------------------------------------------------------------
H1H3 proposed that employees service ability, customer orientation, and service climate
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perception (level 1) would mediate the relationship between service-oriented HPWS (level 2) and
service performance (level 1). Results indicated that the indirect effect of service-oriented HPWS
on service performance through service ability (estimate = 0.08, 95% Monte Carlo CI = [0.03,
0.14]), customer orientation (estimate = 0.06, 95% Monte Carlo CI = [0.02, 0.11]), and service
climate (estimate = 0.17, 95% Monte Carlo CI = [0.10, 0.25]) were significant, respectively
supporting H1, H2 and H3. Further, we compared the indirect effects of the three mediating
effects. The results showed that the indirect effect through service climate perception was
significantly higher than that through service ability (difference = 0.09, 95% CI = [0.00, 0.19])
and customer orientation (difference = 0.11, 95% CI = [0.02, 0.21]); the indirect effect through
service ability and that through customer orientation were not significantly different (difference =
0.02, 95% CI = [-0.08, 0.04]). That suggested, the indirect effect of service oriented HPWS was
H4 suggested that service-oriented HPWS consensus would moderate the indirect effects
proposed in H1H3. The results showed (Table IV) that the indirect effect of service-oriented
23
HPWS on service performance via service ability was significant when HPWS consensus was
higher (estimate = 0.10, 95% CI = [0.04, 0.16]) and insignificant when HPWS consensus was
lower (estimate = 0.05, 95% CI = [-0.002, 0.10]). Similarly, the indirect effect via customer
orientation was significant when HPWS consensus was higher (estimate = 0.07, 95% CI = [0.02,
0.12]) and insignificant when HPWS consensus was lower (estimate = 0.05, 95% CI = [-0.01,
0.10]). In contrast, the indirect effect via service climate perception was significant when HPWS
consensus was either higher (estimate = 0.18, 95% CI = [0.10, 0.26]) or lower (estimate = 0.18,
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95% CI = [0.09, 0.27]), and the difference was not significant (estimate = -0.02, 95% CI = [-0.25,
0.21]). Therefore, H4a and H4b were supported, whereas H4c was not. Overall, the findings
suggested that service-oriented HPWS consensus was an important boundary condition of the
-------------------------------------------------------------
Insert Table IV about here
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5. Discussion
Relying on divergent theoretical underpinnings, prior studies have given some insight into how
research is still far from mature because of its failure to present a complete understanding of the
underlying mediating mechanisms as well as the boundary conditions that shape the relationship.
To address this gap, we drew on AMO theoretical framework and integrated both content-based
24
and process-based approach of HRM research to propose and test a integrated moderated
meidation model wherein service ability, customer orientation and service cliamte as the
mediators and service-oriented HPWS consensus as the moderator. Our results based on the
sample of 568 frontline service employees across 92 branches of a large bank showed that
service-oriented HPWS affected employees service performance via its simultaneous impacts on
employees service ability, customer orientation and service climate perception. Further, the
indirect effects via employees service ability and customer orientation were significant only
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when service-oriented HPWS consensus was high. We discuss the implications, limitations, and
First, through a simultaneous examination of the three AMO mediating paths, this study provides
a more holistic insight into the question of how service-oriented HPWS fosters employee service
performance. Notwithstanding recent research efforts to unravel the mechanisms behind this
employees service performance is still unknown due to the lack of an integrated theoretical
framework. The current study synthesised the fragmented theoretical explanations into AMO
theory and found that service-oriented HPWS affects employee service performance through its
simultaneous impact on employees service ability, customer orientation, and service climate
motivation, and opportunity, making them able to, willing to, and having the chance to perform
high-quality service performance. By finding these, this study is the first to demonstrate the
25
critical roles of all service-specific ability, motivation, and opportunity in translating
service-oriented HPWS into service performance. In addition, we found that service climate
(opportunity) is the most important intermediate process. This concurs with the views held by a
large body of service management researchers that service climate is one of the most pivotal
linkages in translating internal management philosophy into service performance (Bowen and
Second, the study identifies an important boundary condition that shapes the impact of
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service-oriented HPWS on employee service performance. Although a fair number of efforts have
been devoted to this relationship, few studies have explored its boundary conditions, and
consequently, we still know little about when service-oriented HPWS is more or less likely to
affect employee service performance (Hong et al., 2013). Indeed, HRM researchers have pleaded
for more insight into the boundary conditions of HRM practices along with their connection to
HR-related outcomes (Jackson et al., 2014). The current study is a timely response to these calls.
(Bowen and Ostroff, 2004; Ostroff and Bowen, 2016), we illustrated a situational dynamic that
shapes the indirect impact of service-oriented HPWS on service performance through service
ability and customer orientation. Specifically, service-oriented HPWS level and service-oriented
HPWS consensus synergistically influence service performance- that is, service-oriented HPWS
exerts a positive influence on service performance via service ability and customer orientation
when employees have a higher level of consensus on this HPWS, and has no significant impact
when the consensus is lower. This echoed the recent contention that HRM practices are likely to
26
have desired consequences on employees attitudes and behaviours only to the extent that they
are consistently experienced and perceived by employees (Bowen and Ostroff, 2004; Kehoe and
Wright, 2013, p. 367). Also, since the service-oriented HPWS level and service-oriented HPWS
consensus represent the HRM content and HRM process respectively, the findings demonstrate
again the necessity and validity of integrating content-based and process-based approaches of
HRM research. It should be mentioned that we did not find support for the contingent effect of
service-oriented HPWS consensus on the indirect effect via service climate perception. The
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strong, close association between HRM and climate perception might be a reason for this finding.
In the eyes of employees, both service-oriented HPWS and service climate convey a direct
message about service and highlight the service policies and culture in their working groups
(Bowen and Ostroff, 2014). This overlap encourages employees to perceive a favourable service
climate once their working groups formulate a shared HPWS perception for service. By and large,
our investigation of the moderating effect of HPWS consensus helps fill the void in current
research and enriches our understanding of the situation in which service-oriented HPWS works.
Finally, by considering both the level and the consensus of HPWS perceptions, we extend
the growing but still limited body of group-level HRM research. Since employees within the
same group are more likely to develop a shared experience with HRM, thus making employees
HRM perceptions differ across groups (e.g., jobs, teams, branches, stores, units) within an
organisation (Nishii and Wright, 2008), recent years have witnessed an increasing number of
studies on group-level HRM (see Lepak et al., 2012; Pak and Kim, in press). However, earlier
research often assumes no variation in HRM perceptions within a group, and hence only uses the
27
level of aggregated HRM perceptions to represent group-level HRM quality. This assumption and
failing to examine the potential role of variability in SHRM research, we miss a very interesting
and important part of the picture (Nishii and Wright, 2008, p. 226). Indeed, in their seminal work,
Nishii and Wright (2008) contended that there is variability of HRM at all relevant levels of
analysis, but particularly within organisations (i.e., individual and group levels) (p. 226). From
this perspective, recent group-level research that investigates the effect of group members
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collective HRM experiences addresses only the variability at group level within an organisation,
paying no attention to the variability at individual level within a group. By examining both the
group-level (HPWS level) and the individual-level (HPWS consensus) variability of HRM and
illustrating their synergistic effect, our study presents a more integrated model through which to
evaluate the effectiveness of group-level HRM, thus contributing to this emerging stream of
Our study has several practical implications for service organisations. First, our findings about
the multiple mediation effects indicate that enhancing all of the three domain-specific AMO
service climate perception (opportunity) via implementing service oriented HPWS would be
associated with increased employee service performance. Therefore, organisations should invest
in all of the service-oriented skill-, motivation-, and opportunity- enhancing HRM practices (e.g.,
Second, our findings about the contingent effect of service-oriented HPWS consensus suggest
that when applying HRM practices to enhance employees service ability, customer orientation
and subsequently service performance, organisations should not only highlight the importance of
the content of HRM practices, but also their implementation. A strong consensus among
employees regarding their perception of the content of HRM practices must be achieved in order
to allow service-oriented HPWS to exert its desirable effects. To arrive at such a consensus,
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agreement among principal HRM decision-makers and fairness of the HRM system are required
The current research has several limitations. First, although we have delineated the causal
relationships among variables from theoretical perspective, the cross-sectional nature of the data
still limited us in establishing causal relations. Future research should consider using multi-phase
data to examine the causal relationship. Second, although it is reasonable to use HPWS consensus
to represent the HRM process (e.g., Russo et al., in press; Suess et al., 2014), the process of
consistency, and consensus (Bowen and Ostroff, 2004). Future study can assess all these
elements to reflect the HRM process in a more comprehensive manner. The last limitation
concerns the generalisability of our findings to other industries, as we only collected data from a
single industry. However, the findings are largely consistent with previous theoretical and
29
empirical work, suggesting our results are not sample-specific. Future research can address these
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Service-oriented HPWS
consensus
Service-oriented
HPWS
Branch Level
(Motivation) Service
Customer orientation performance
(Opportunity)
Service climate perception
1
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2
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M SD 1 2 3 4 5 6
Branch level
1. Supervisor age 40.09 5.90
2. Supervisor gender 1.48 0.50 -0.17
3. Supervisor education 2.93 0.44 -0.29** 0.04
4. Servant leadership 3.82 0.60 -0.30** 0.19 0.07
5. Service-oriented HPWS 3.95 0.47 -0.31** 0.17 0.12 0.68**
6. Service-oriented HPWS consensus -0.47 0.27 -0.08 0.02 -0.13 0.07 0.09
Individual level
1. Employee age 31.95 6.65
2. Employee gender 1.61 0.49 0.01
3. Employee education 2.96 0.53 -0.29** -0.04
4. Service ability 4.03 0.67 -0.12** -0.10* -0.02
5. Customer orientation 4.27 0.57 -0.07 -0.03 0.01 0.60**
6. Service climate perception 4.02 0.68 -0.25** -0.03 0.00 0.49** 0.52**
7. Service performance 4.28 0.56 -0.07 -0.03 -0.01 0.52** 0.57** 0.59**
Note: ** p0.01 * p0.05.
3
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4
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Moderator 95%
Independent Indirect
Mediator Service-oriented Confidence
variable effect
HPWS consensus interval
Higher 0.10 [0.04, 0.16]
Service ability
Lower 0.05 [-0.002, 0.10]
Service-oriented Higher 0.07 [0.02, .012]
Customer orientation
HPWS Lower 0.05 [-0.01, 0.10]
Higher 0.18 [0.10, 0.26]
Service climate perception
Lower 0.18 [0.09, 0.27]