In today's business environment, establishing a positive climate is becoming increasingly important for organizational growth and performance. A positive employee relations climate creates a social atmosphere, which encourages high employee involvement and an employee-centered culture. In response, employees feel comfortable and contribute positively to organizational performance. Given the intensity of competition in the service industry, banks must understand how the employee relations climate and HRM practices affect organizational performance. Banks also need to know which employee relations climate best meets the needs of the organization. Accordingly, this study examined the way the employee relations climate mediates the relationship between strategic HRM practices and organizational performance in Chinese banks. Senior employees of Chinese banks based in Shanghai provided data by responding to a survey questionnaire. CFA and SEM in AMOS 18 were used to test the hypotheses and evaluate measurement validity. The results indicate that strategic HRM has a significant positive relationship with operational performance. In addition, the employee relations climate was found to mediate the relationship between strategic HRM and organizational performance. Cross-sectional data, a restricted target sample (i.e., bank employees), and a restricted target area (i.e., Shanghai) are limitations of this study. In addition, the dimensions of organizational performance were not identified in detail. Finally, the hypothesized relationship was explored only for a specific sector (i.e., the banking sector).
The concept of strategic human resource management (SHRM) is developed in the late 1970s and the 1980s as a way of managing employees in an increasingly turbulent and fast-changing, uncertain environment. The wordSHRMhas defined in several ways by different researchers and practitioners under the management context, whereas, the most simple definition and understanding is; “pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals” (Wright & McMahan, 1992). It includes all of the activities to implement the strategic needs of business to affect the behavior of employees, implemented by a business unit or an organization (Nishii & Wright, 2007). Whereas, Delery and Shaw (2001) stated that there are at least two main features comparatively differentiate the SHRM research from more traditional HRM research. First, it focuses on the enlightening strategic role to enhance organizational effectiveness through the human resource; and second feature is about the level of analysis. Usually, researchers belongs to HRM have individual level analysis and examining the impact of HRM-practices on employee-level performance, for example, task performance, absenteeism, and turnover (Griffeth, Hom, & Gaertner, 2000; Harrison & Martocchio, 1998); whereas, SHRM researchers have business-unit or organizational level analysis with primary focus on higher level performance outcomes, for example, return on assets, return on equity, firm market value (Delery & Doty, 1996; Huselid, 1995; Rogers & Wright, 1998; Wright, 1998). It is more appropriate to understand that how HR enhance organizational outcomes (Lepak, Liao, Chung, & Harden, 2006), as it assumes a system view to inspect the effects of bundles of HR practices (Wright & McMahan, 1992).
Discussion and conclusion
The past few years have witnessed dramatic developments in strategic HRM practices in Chinese enterprises. Not only have foreign international enterprises (FIEs) adopted these practices, but large and reformed state owned enterprises (SOEs) are also in the forefront of making these changes. Beside these practices concerning performance, the work environment is also important to consider for organizational effectiveness. For example, research shows that an employee spent about a quarter to a third of their waking life at work (Harter, Schmidt, & Keyes, 2003), So its responsibility of the organization to provide such working environment in which employee feels good, motivates and involved themselves; because a climate in which employee involved or perceived will be positively associated with organizational effectiveness in a hypercompetitive world (Huselid, 1995; Lawler, 1996; Riordan et al., 2005).