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The Diffusion of High Performance Workplace Practices in Pakistan and their Performance Associations

Ahmad, Mansoor

[Thesis]. Manchester, UK: The University of Manchester; 2013.

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Abstract

The University of ManchesterMansoor AhmadDoctor of Philosophy (PhD)August 2012The Diffusion of High-Performance Workplace Practices in Pakistan and their Performance AssociationsThe topic of high performance workplace practices and their impact on organizational performance has been extensively researched in US and UK. Increasingly evidence with regard to diffusion of high performance workplace practices is emerging from fast developing Asian economies. However, very little is known about the state of diffusion of high performance workplace practices in Pakistan, a South Asian economy on route to industrialization. This study attempts to explore the diffusion of high performance workplace practices among the multinational and local firms in the important industrial sectors of banking, information technology and pharmaceutical in Pakistan that are characterized by high level of inward foreign direct investment. Recently the Pakistani Government has passed laws to encourage greater use of HPWS practices amongst domestic firms. This study compares the prevalence of HPWS practices in domestic firms to that in multinationals. MNCs are chosen as a competitor because they have been seen as being at forefront of HPWS use. First of all, the study explored an overall diffusion of high performance workplace practices in Pakistan and determined the state of differences with regard to diffusion of the practices between the establishments of multinational and local firms. Secondly, the study further explored the differences by taking into account the role of control variables such as age, size, percentage of non-managerial employees and nature of business at the establishment. The most important argument underpinning the high performance paradigm is that practices have substantial impact on human resource and performance outcomes of a firm. Thus the third objective of the study was to test and report the association of individual practices with various performance outcomes for a sample of local firms in Pakistan. The study observed whether such claims are valid for the local Pakistani establishments that implement such practices in hope of achieving better performance outcomes. The study found that a number of practices had a consistent and significant association with various performance outcomes across the industrial sectors in Pakistan. The results of the study suggest that latest innovations in human resource management in advanced industrial economies have fast spread among establishments in Pakistan. Moreover the results also suggest that arguments of high performance theory, in particular the universalistic/ best practice model hold ground when it comes to the diffusion of such practices in developing economies such as Pakistan with some caveats.

Layman's Abstract

Within the human resource management literature, there has been increased interest among the management scholars to explore the effects of HRM practices often termed as high performance workplace practices on organizational performance outcomes. The topic has been hotly researched and debated in advanced industrial economies in particular in the US and the UK. A lot of evidence is emerging from Asian context with regard to successful implementation of such practices in countries such as China, India, Singapore, Taiwan and Korea. This study seeks to assess the diffusion/adoption of high performance workplace practices in Pakistan and addresses the following questions. The overall state of diffusion of high performance workplace practices in Pakistan. Are there any differences between the establishments of multinational and local firms with respect to diffusion/adoption of high performance workplace practices? Do the differences hold when explored alongside the control variables as size, age and nature of the businesses? Is there evidence to suggest that local establishments that adopt high performance workplace practices in Pakistan have better performance outcomes as measured by absenteeism, quit rates, labour productivity, change in labour productivity and financial performance. The thesis weighs the arguments of universalistic best practice and contingency best fit perspectives and evaluates evidence with respect to their applicability to firms operating in Pakistan. In light of its findings the study makes important recommendations for firms and policy makers in Pakistan.