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The significant role that human resource management (HRM) can play in allowing a firm to remain competitive has been increasingly recognised by scholars and practitioners alike in recent years (Ubeda-García et al., 2013). The preoccupation with high performance, often referred to as the “high-performance paradigm”, has developed into a dominant theme within the HRM discipline (Ramdani et al., 2014; Gilman and Raby, 2013). With the advent of strategic HRM (SHRM) paradigm, a substantial body of HRM research has examined the potential for bundles or systems of human resource policies and practices, otherwise called as high-performance work systems (HPWS) to influence firm performance (Mihail et al., 2013; Becker and Gerhart, 1996; Pfeffer, 1995).
Further, despite the documented relationship between HPWS and organizational performance (OP), the mechanism underlying this relationship remains a “black box” (Sun et al., 2007). The past decade has witnessed a number of research addressing the “black box” through several mechanism including job satisfaction, affective commitment (Gong et al., 2009), service-oriented citizenship behaviours (Sun et al., 2007) and social exchange (Takeuchi et al., 2009), psychological contract (Raeder et al., 2012), competitive strategies (Shin, 2014) and contingent labour (Luigi et al., 2014). However, the assumption that HPWS impact the OP, through various social processes including culture and climate, more specifically through human resource development (HRD) Climate has remained largely untested.
Again, the researcher observed that most of the studies relating to HPWS have been conducted in Anglo-American, Confucian and European countries (Ramdani et al., 2014; Posthuma et al., 2013; Muduli et al., 2012). In the Indian context, HRM research is pre-dominantly concentrated on traditional HRM rather than on the interaction between HRM and strategy (Amba-Rao, 1994; Mathur et al., 1996; Budhwar et al., 2006; Azmi, 2011). In recent years, research in SHRM in India are reported on various theme including SHRM and outcome (Muduli, 2012), HR strategy and innovation (Cooke and Saini, 2010), HR flexibility and firm-level outcomes (Ketkar and Sett, 2009), Innovative HRM (Som, 2008), or individual HRM practice such as employee commitment (Bhatnagar, 2007), performance management system (Shrivastava and Purang, 2011), career management practices (Budhwar and Baruch, 2003), recruitment and selection, pay and benefits, training and development and employee...