The influence of HRM and leadership on employee well-being

Abstract

High-performance work systems (HPWS) and transformational leadership (TL) are dominant fundamental explanations of organizational behavior. Although both are assumed to have a strong influence on the same employee outcomes, research has only recently began to theorize and study their simultaneous independent and joint effects. We extend this research, first, by adopting a multilevel perspective and arguing that their relative main effects differ depending on the level of analysis. Second, we develop the conceptualization of the interdependencies of leadership and human resource management (HRM) more generally, and argue for level-specific interaction effects of HPWS and TL. To test our hypotheses, we use data collected in two waves from 730 employees working in 99 teams. The results indicate that HPWS is more important for individual employee outcomes, exemplified by engagement, stress and turnover intention, while TL is more important for team functioning, exemplified by serving climate and service performance climate. We found only weak support for their interaction effects. Our study provides important theoretical and practical insights about the multilevel complementarity of the main effects of HPWS and TL, and the need to sharpen the theoretical arguments for interaction effects of leadership and HRM that have dominated past joint research on them. The sudden and extensive implementation of teleworking in the beginning of the COVID-19 pandemic has threatened employees’ well-being. Based on the challenges that particularly threatened such well-being in the beginning of the pandemic, we identify sets of telework-specific HRM practices and leadership behaviors, and examine their joint relationships with teleworkers’ happiness well-being in terms of work engagement and job satisfaction. Thus, we also consider the mediating roles of social isolation (as an indicator of social well-being) and psychological strain (as an indicator of health well-being). We also expect that HRM and leadership should interact and reinforce each other. Our analyses are based on data from German teleworkers at two consecutive points in time. Our findings reveal differentiated and complementary effects of telework-oriented HRM and leadership. In particular, we identified the provision of health care to contribute most to telework-oriented HRM’s relationship with social isolation and happiness well-being. Telework-oriented leadership mainly affected teleworkers’ happiness well-being via strain by ensuring communication and information exchanges between teleworkers. In a critique of traditional concepts of human resource management (HRM), which are designed to enhance performance rather than well-being (i.e., high-performance work system, HPWS), scholars have proposed well-being focused HRM systems (WBHRM). However, so far it is unclear whether these WBHRM are indeed a better predictor of employee well-being than the traditional HPWS. Therefore, we tested the relationship between WBHRM and employees’ happiness and health well-being and compared its predictive power with that of the HPWS. Our analyses are based on data from 1510 employees at two consecutive survey dates. Our results show positive relationships between both HRM systems and employee well-being, as well as a significant but small advantage of WBHRM in predicting employee well-being. However, we also found shifts in the relative contribution of HRM practices between both models. This suggests that by failing to account for well-being-specific HRM practices within the HPWS, explained variance in employee well-being is misattributed to other HRM practices within the HPWS, obscuring their true relationship with employee well-being.