The Indirect Effect Of High Commitment Hr Practices And Charismatic Leadership On Firm Performance

Abstract

In this study, I examine the simultaneous effect of high commitment HR practices (HCHR) and charismatic leadership on firm performance through employee attitudes (affective commitment) and behaviors (customer service orientation and helping). I posit that HCHR practices and charismatic leadership are key drivers of employee attitudes and behaviors and need to be examined together given that they operate simultaneously in organizations. Further, when examined together I posit that HCHR practices and charismatic leadership will have a positive and additive effect on employee attitudes and behaviors, which will affect firm performance. I analyzed data collected in small firms using structural equation modeling. Results show that both HCHR practices and charismatic leadership affect employee attitudes and behaviors. Further, HCHR practices and charismatic leadership affected firm performance through affective commitment and customer service orientation; results did not support the link between helping and firm performance. Lastly, charismatic leadership appeared to have a larger effect on employee affective commitment than HCHR practices.