Int. Journal of Business Science and Applied Management, Volume 18, Issue 1, 2023

High-Performance Work System and Employee Work

Performance: A Moderated Mediation Model of

Ambidextrous Leadership and Employee Ambidexterity

Amare Werku Ijigu

Business Leadership, School of Commerce, Addis Ababa University

Addis Ababa, PO Box 1176, Addis Ababa University, Ethiopia

Tel: +251920773889

Email: amarew.john@gmail.com

Abebe Ejigu Alemu

Logistics Management, International Maritime College, National University Science and Technology

PO Box 532, National University Science and Technology, Oman

Tel: +251986558960

Email: abebe@imco.edu.com/abebe.ejigu@mu.edu.com

Abdurezak Mohammed Kuhil

Business Leadership, School of Commerce, Addis Ababa University

Addis Ababa, PO Box 1176, Addis Ababa University, Ethiopia

Tel: +251911238889

Email: abdurazak.mohammed@aau.edu.et

Abstract

The purpose of this study is to explore a moderated mediation model of ambidextrous leadership and

employee ambidexterity in the relationship between a high-performance work system and employee

work performance. A census approach is used to collect data from target employees. Hence, using a

cross-sectional design, 387 non-supervisory sales representative employees of Ethio-Telecom in

Ethiopia participated in this study. Structural equation modelling with the help of SPSS plus AMOS

was used to analyze the proposed hypotheses. By integrating social exchange theory and the AMO

model, the result indicated that ambidextrous leadership moderated in the relationship between a high-

performance work system and employee ambidexterity. At the high level of ambidextrous leadership,

the relationship between a high-performance work system and employee ambidexterity was stronger.

Furthermore, ambidextrous leadership moderated the indirect effect of employee ambidexterity in the

relationship between a high-performance work system and employee work performance. The study led

to an additional understanding of the significant role of ambidextrous leadership in unlocking the black

box between HPWS and employee work performance.

Keywords: high-performance work system, employee work performance, employee ambidexterity,

ambidextrous leadership, AMO model, ethio-telecom

Amare Werku Ijigu, Abebe Ejigu Alemu and Abdurezak Mohammed Kuhil

1. INTRODUCTION

The success of organizations depends on the effective and efficient utilization of organizational resources.

Over the past few years, human resources (HR) have continued to be the most valuable resource in these modern

organizations (Jiang & Messersmith, 2017). In fact, the term high-performance work system (HPWS) refers to

separate but interconnected HR practices designed to achieve business objectives (Boxall & Macky, 2009).

HPWS can significantly aid in the achievement of organizational objectives as well as boost productivity and

success. As a result, the field of human resources management (HRM) has extensively explored the relationship

between HPWS and performance (Li et al., 2019).

In the global context, studies on high-performance work systems revealed that human resource practices

positively influence individual and organizational performance. However, there are theoretical inconsistencies

that still existed concerning the concept of a high-performance work system (e.g., Cai, 2020; Ingvaldsen et al.,

2014; Jiang & Messersmith, 2017; Kaufman, 2015; Lepak et al. 2006; van Esch et al., 2018). Likewise, there are

also empirical research gaps that are rarely reported in a non-western context, particularly in developing

countries like Ethiopia (Tensay & Singh, 2020). In fact, human resource management practices should be

viewed as a system (Lepak et al., 2006). Hence, scholars such as Ismail et al. (2020), recommend adding a

suitable mediator or moderator to help explain the relationship that exists between the two conceptions. Thus, in

order to solve the mystery surrounding the connection between HPWS and employee work performance, this

study presents a new theoretical framework with the inclusion of ambidextrous leadership and employee

ambidexterity constructs in the proposed research model.

Prior studies confirmed that at the organizational level a high-performance work system positively

influences organizational ambidexterity, a high-performance work system results in better organizational

performance (Úbeda-garcía et al.., 2017), and, subsequently, organizational ambidexterity positively influences

organizational performance (Peng et al., 2019). At the micro-level, more recent work by Zhang et al. (2018)

confirmed that high-performance work systems indirectly influence employee task performance. Likewise,

employee job engagement and job performance are positively influenced by a high-performance work system

(Zafar et al., 2019). There is also a positive relationship between individual ambidexterity and individual

performance in the public sector (Kobarg et al., 2015). In the context of Ethio-Telecom in Ethiopia, this study

aims to investigate the causal effects of HPWS on employee work performance given the moderating effect of

ambidextrous leadership and the moderating role of employee ambidexterity. By doing so, this study answers

the call made by earlier research, which calls for the inclusion of employee ambidexterity as a mediating

variable in the HPWS-employee work performance relationship and whether the existence of such a relationship

should be accepted or rejected. Another purpose of the research is to explore the moderating effect of

ambidextrous leadership to strengthen the relationship between HPWS and employee work performance. The

study mainly aims to find out whether ambidextrous leadership reinforces the indirect effect of employee

ambidexterity in the relationship between HPWS and employee work performance. The following sections of

this article go on to describe the research techniques employed to generate the research findings. The study's

conclusions, implications, and limitations are discussed in the final section.

2. LITERATURE REVIEW

2.1. Social Exchange Theory and AMO Model

The bulk of existing work on high-performance work systems and employee performance is based on

social exchange theory and the AMO model, which shed some light on the mystery of HPWS-performance

linkage (Diogo & Costa, 2019). In fact, social exchange theory proposes that in the norm of reciprocity, there is

the social form of exchange where employees perceive HPWS as benefits received from the organization, and,

thus, in return employees show outstanding performance. (J. Zhang, Bal, et al., 2018). Similar work was also

carried out by Gong et al. (2010), who claim that social exchange theory provides an appropriate lens for

understanding employee responses to the organization. Likewise, a meta-analysis conducted by Diogo and Costa

(2019) revealed social exchange theory as one of the most appropriate theoretical lenses that explore the impact

of HPWS on employee outcomes. Researchers in other study areas have adopted the same approach too

(Memon et al., 2020). The AMO model is rooted in the notion of social exchange theory (Diogo & Costa, 2019).

According to the social exchange theory, in particular, human resource management (HRM) practices that are

seen as supportive by employees would be returned with favourable attitudes and behavior, such as good

performance (Jyoti & Dev, 2016). Likewise, the underlying principles of abilities, motivation, and opportunity

(the AMO model of HRM) suggest that every HR system works through its impacts on the skills and knowledge

of individual employees, their willingness to exert effort, and their opportunities to express their talents in their

work (Boxall & Macky, 2009). Therefore, based on the purpose of this study, both social exchange theory and

the AMO model will be used as a theoretical base for explaining the link between perceived HPWS and

employee work performance.

Int. Journal of Business Science and Applied Management / Business-and-Management.org

2.2. High-Performance Work System

Marathe & Pathak (2013) conceptualize HPWS as it is deliberate work system design that boosts an

organization's performance by combining direct, system, and interaction effects. It comprises the initial sensible

choice of HR practices having an immediate impact on employees’ abilities, motivation, and opportunities.

Also, it involves external fit with other context contributes to interaction effect of strategic advantage. Then,

internal fit among HR practices leads to system effect through strong signaling by consistent organizational

climate. Similarly, according to Lepak et al. (2006), HPWS is one method of conceiving HR systems that are

more expansive in nature but include components of both the high-commitment and high-involvement HR

system approaches. These systems emphasize the potential competitive advantages that might be realized by

employees via HR practices that treat workers with respect, invest in their development, and foster trust in

management and commitment toward achieving organizational goals. Other similar studies also view HPWS as

high involvement/ commitment HR practices. This approach is based on the configurational perspective and

reflects the notion of fit and the belief that bundles or distinctive patterns of HR practices are horizontally

integrated, leading to superior organizational performance (M. Zhang et al., 2014).

2.3. Employee Work Performance

Organizations need highly performing individuals to meet their goals, deliver the products and the services

they specialized in, and finally achieve competitive advantage. Several studies and reviews have viewed

employee performance from different contexts (Y. Li & Lu, 2009; Sonnentag & Frese, 2002). However, a recent

review conducted by Koopmans et al. (2013) revealed that four broad and generic dimensions constitute

individual work performance. The first dimension, task performance, refers to the proficiency with which an

employee performs central job tasks. The second dimension, contextual performance, refers to employee

behaviours that support the organizational, social, and psychological environment in which the central job tasks

are performed. The third dimension, adaptive performance, refers to an employee’s proficiency in adapting to

changes in work roles or environments. The fourth dimension, counterproductive work behaviour, refers to

behaviour that is harmful to the well-being of the organization. A systematic review conducted by Koopmans et

al. (2011) further illustrated separate employee work performance dimensions that are related to the general

factor of work performance.

2.4. Employee Ambidexterity

One of the more persistent concepts in organization science is that a company's long-term success is

dependent on its capacity to maximize its existing strengths while simultaneously pursuing fundamentally new

competencies (Raisch et al., 2009). The term ambidexterity involves two competing demands: exploitation and

exploration (O’Reilly III & Tushman, 2013; Raisch & Birkinshaw, 2008). Most academics' top research

priorities included previous studies that were extensively examined at the organizational level and the

organizational outcomes of ambidexterity (Caniels et al., 2017). There are two ways of implementing

ambidexterity in organizations: structural ambidexterity and contextual ambidexterity (Y. I. Zhang, Wei, et al.,

2018). Contextual ambidexterity is a business-unit or bottom-up approach to ambidexterity, where individuals

based on their units demonstrate behaviours of alignment and exploitation and/or behaviours of adaptation and

exploration (Gibson & Birkinshaw, 2004). Accordingly, Good and Michel (2013) define individual/employee

ambidexterity as the cognitive abilities necessary to balance efforts of exploration and exploitation. Similarly,

the concept of employee ambidexterity is rooted in the micro-foundations of organizational ambidexterity,

which implies a multidimensional construct that refers to the behavioural orientation of employees to syndicate

exploitation and exploration-related activities over a particular duration of time (Caniëls & Veld, 2019).

2.5. Ambidextrous Leadership

Leadership is a key factor in ensuring employee ambidexterity in enterprises, as is commonly

acknowledged. Today’s organizations are characterized by leaders' complexity due to high pressure for

innovation in today’s markets and continuing internalization (Bledow et al., 2011). Extant research confirmed

that ambidextrous theories of leadership support innovation and the results revealed that leader opening and

closing behaviours positively predicted employee exploration and exploitation behaviours (Alghamdi, 2018;

Zacher & Rosing, 2015). According to Rosing, Frese, and Bausch (2011), “ambidextrous leadership refers to the

ability to foster both explorative and exploitative behaviors in followers by increasing or reducing variance in

their behavior and flexibly switching between those behaviors. That is, ambidextrous leaders can support their

followers in the attempt to be ambidextrous” (p. 957). Moreover, the reform of public organizations is facilitated

by ambidextrous leadership (Trong Tuan, 2016). A meta-review conducted by Mueller et al. (2018) indicated

that ambidextrous leadership is a multi-level concept that involves the micro and macro level and meets the idea

of ambidextrous leadership.

Amare Werku Ijigu, Abebe Ejigu Alemu and Abdurezak Mohammed Kuhil

2.6. High-Performance Work System and Employee Work Performance

Several studies have explored the effects of HPWS on organizational and individual outcomes. For

instance, Huselid (1995) confirmed that systems of high-performance work practices have an economically and

statistically significant impact on both intermediate employee outcomes (turnover and productivity) and short-

and long-term measures of corporate financial performance. Employee creativity is also enhanced by HPWS

(Tang et al., 2017). At the organizational level, high-performance human resource practices directly impact firm

performance (van Esch et al., 2018). At the employee level, prior study shows that HPWS positively relates to

job satisfaction, physiological job demand and job search behaviour (Behravesh et al., 2019), employee service

performance, and organizational citizenship behaviour (Nadeem, Riaz, Iftikhar, et al., 2019), and job

engagement (Arefin et al., 2019). Most importantly, perceived HPWS has a positive relationship with work-to-

family enrichment (Carvalho & Chambel, 2015), job resources (Kloutsiniotis & Mihail, 2020), and employees’

work well-being (Su et al., 2019). Furthermore, the AMO model of HRM is a significant predictor of employee

proactive behaviour (Al-tit, 2020). This stream of discussion leads to the following hypothesis:

Hypothesis 1: High-performance work systems have a positive effect on employee work performance.

2.7. High-Performance Work System and Employee Ambidexterity

Scholars have emphasized the effectiveness of strategic HR systems in supporting individual and

organizational ambidexterity (Mom et al., 2018). In particular, high-performance work systems are a significant

predictor of organizational ambidexterity (Gürlek, 2020).

A study conducted in Spain found that high-involvement HR systems support ambidextrous learning,

which in turn generates ambidextrous employees Prieto-Pastor & Martin-Perez, 2015). Also, the simultaneous

pursuit of exploration and exploitation is enhanced through the present HRM practices (Swart et al., 2016).

However, Stokes et al. (2018) underline the managerial challenges in handling organizational ambidextrous

dynamics and the tensions surrounding resilience and positive and sckeptical approaches about individual and

organizational stances toward HRM practices. In order to create contextual ambidexterity in case organizations,

sets of high-involvement HRM practices for the exploration of new ideas and efficiency-driven HRM practices

are used (Malik, Boyle, et al., 2017). As a result, HPWS is viewed as a systematic tool for enhancing

organizational ambidexterity (Patel et al., 2013). Thus, Hypothesis 2 is stated as follows:

Hypothesis 2: High-performance work systems have a positive effect on employee ambidexterity.

2.8. Employee Ambidexterity and Employee Work Performance

According to Dutta (2013), an empirical study conducted across firms in India suggested that contextual

ambidexterity significantly mediates the relationship between dynamism in the environment, organization

context, and renewal. Organizational ambidexterity has been established as an important antecedent of

organizational innovation and performance (Rosing & Zacher, 2016). In other words, ambidexterity and

generative learning are found to be significantly associated with innovative firm performance (Çömez et al.,

2011). Also, ambidexterity and its interaction with market orientation were found to have a positive influence on

organizational performance (Peng et al., 2019). These findings are consistent at the individual level. In

particular, employee exploration-exploitation significantly influences task performance (J. A. Zhang et al.,

2020). Similarly, the individual balanced pursuit of exploitative and explorative activities positively related to

the performance of the public sector (Kobarg et al., 2015). To sum up, balancing the exploration of new

opportunities with the exploitation of existing capabilities is increasingly viewed as a promising approach to

adapting to technological and environmental change (Schnellbacher et al., 2019). Hence:

Hypothesis 3: Employee ambidexterity has a positive effect on Employee Work Performance.

2.9. The Mediating Role of Employee Ambidexterity in the Relationship between High-Performance

Work System and Employee Work Performance

Prior studies insist that various mediators regulate the relationship between high-performance work

systems and performance. For instance, Beltran-Martin et al. (2008) insisted that human resource flexibility

mediates the association between high-performance work systems and organizational performance.

Alternatively, high-performance human resource practices and firm performance are partially mediated by

employees’ competencies (van Esch et al., 2018). In particular, high-performance work systems and employee

performance is mediated by social exchange and thriving (J. Zhang, Bal, et al., 2018). However, psychological

capital and resilience play a mediating role in the relationship between a high-performance work system and

employee service performance (Nadeem, Riaz, Iftikhar, et al., 2019). In public organizations, service-oriented

high-performance work systems, and service-oriented behaviours, are regulated by work engagement (Luu,

2018). Collective human capital serves an intervening role in the influence of high-performance work systems

Int. Journal of Business Science and Applied Management / Business-and-Management.org

on unit performance and perceived HPWS at the employee level (Ali et al., 2019). Based on the above-

mentioned literature and the discussion, the following hypothesis is proposed:

Hypothesis 4: Employee ambidexterity mediates the relationship between high-performance work systems

and employee work performance.

2.10. The Moderating Effect of Ambidextrous Leadership in the Relationship between High-

Performance Work System and Employee Ambidexterity

A review conducted by Raisch & Birkinshaw (2008) revealed a comprehensive model of understanding

organizational ambidexterity research. Accordingly, environmental dynamism and competitive dynamics are the

main moderators that explain the organizational ambidexterity–performance linkage. Indeed, some other

scholars, such as Günsel et al. (2017), indicated that the greater the networking the greater the relationship

between exploitation capability and firm performance. In particular, management support plays a moderating

role in ensuring and sustaining ambidextrous learning through high-involvement HR systems (Prieto-Pastor &

Martin-Perez, 2015). Finally, a study conducted by Alghamdi (2018) showed that the interaction between

leaders’ opening and closing behaviours predicts employee innovative performance to such an extent that

employee innovative performance is highest when both opening and closing leadership behaviours are high.

Based on the above-mentioned literature and the discussion, the following hypothesis is proposed:

Hypothesis 5: Ambidextrous leadership has a moderating effect on the relationship between a high-

performance work system and employee ambidexterity.

Furthermore, a more complex theoretical model can be shown by combining the mediation effect with the

moderation effect. Specifically, employee ambidexterity mediates the positive relationship between a high-

performance work system and employee work performance, but the size of the mediation effect depends on the

level of ambidextrous leadership. Generally speaking, when employees perceive a higher level of ambidextrous

leadership, the positive relationship between a high-performance work system and employee ambidexterity is

stronger, thus the employee ambidexterity will transmit the effect of a high-performance work system onto

employee work performance. Conversely, when employees perceive a lower level of ambidextrous leadership,

the positive relationship between a high-performance work system and employee work performance is weaker.

Thus the effect that a high-performance work system can have on employee work performance will be less

transmitted through employee ambidexterity. Thus,

Hypothesis 6: Ambidextrous leadership moderates the mediation effect of employee ambidexterity between

a high-performance work system and employee work performance.

3. RESEARCH MODEL

The reason for developing a research model is to enable researchers to integrate different ideas from

different theories and then integrate them with research questions (Adams et al., 2014). Indeed, the research

model is derived from the theoretical framework and relates to specific research problems (Kumar, 2011). The

conceptual framework is presented in two forms. In one way, it identified the research variables. On the other

hand, it clarifies relationships among variables (McGaghie et al., 2001). Thus, based on the theoretical

underpinnings that are explained above, this hypothesized research model is developed.

Figure 1. Research Model

Amare Werku Ijigu, Abebe Ejigu Alemu and Abdurezak Mohammed Kuhil

4. RESEARCH METHODOLOGY

4.1. Research Setting and Sample Procedures

Ethio telecom is state-owned and the only telecom operator in Ethiopia. Currently, the company provides

various telecom services to customers. Ethio telecom has a large number of telecom subscribers in Addis Ababa

city. According to information gathered from the company's human resources department, Ethio Telecom is

expected to have more than 20,000 employees in Addis Abeba city as of the year 2022. Of these, the total

number of permanent employees working in Addis Ababa city is 9277 across 24 divisions. Out of this number,

517 are sales representative employees working in the capital. The study employed a census approach to

gathering data since it is challenging to control all divisions and incorporate them into the study (Draugalis &

Plaza, 2009).

Rooted in the positivism research paradigm, the deductive approach is appropriate for this study as it is

intended to evaluate propositions or hypotheses related to an existing theory. From a methodological

perspective, this study was quantitative by nature as there was a single data collection technique, that is, a

standardized questionnaire adapted from prior studies. Explanatory research was adopted to examine and

investigate how and why HPWS influences employee work performance through employee ambidexterity given

the moderating effect of ambidextrous leadership (Babbie, 2016; Saunders et al., 2016). This study used

Statistical Package for Social Science (SPSS) plus AMOS software Version 23. The reason is that Cronbach’s

alpha can be calculated using SPSS, whereas assessment of composite reliability can be done through AMOS

(Field, 2009; Hinton et al., 2014). Likewise, covariance-based structural equation modelling (CB-SEM) has

been widely applied in the field of social science during the past several decades and is still the preferred data

analysis method today for confirming or rejecting theories through the testing of hypotheses, particularly when

the sample size is large, the data is normally distributed, and, most importantly, the model is correctly specified.

That is, the appropriate variables are chosen and linked together in the process of converting a theory into a

structural equation model (Hair Jr. et al., 2014). AMOS is one of the statistical packages widely used for

covariance-based structural equation modelling (Asyraf & Afthanorhan, 2013).

The study participants were non-supervisory permanent sales representative employees working in Addis

Ababa city. The reason is that compared to other areas, a large number of employees are working in Addis

Ababa city and, it is also more accessible and easier to gather data. Likewise, the literature on HRM at the time

placed more emphasis on a management-centric approach than it did on how to deal with employee outcomes

like employee work performance (Diogo & Costa, 2019). After gaining consent or acceptance from Ethio

telecom, a list of employees and other related information were obtained, and then orientation was given about

the purpose of the study orally. Their consent was also requested without coercion. In total, 412 employees

responded to the self-administered survey (85.12%). After excluding invalid responses, 387 responses were

included in the final analysis.

4.2. Scale and Measures

Drawing on the AMO model, HPWS was measured by using a seven-point Likert-type scale adapted from:

Jensen, Patel, and Messersmith (2013); Jeevan Jyoti and Rani (2017); Jeeven Jyoti and Dev, (2016),

respectively. Before exploratory factor analysis (EFA), the scale consisted of 15 items. Each item was evaluated

by using a seven-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree). To measure

employee work performance, a 31-item scale was adapted from Koopmans et al., (2014). Pradhan and Jena

(2017) were also used. The latent variable EWP has four dimensions, namely task performance, adaptive

performance, contextual performance, and counterproductive work behaviour. Each item was evaluated by

using a seven-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree). To examine the

perceived level of employees’ ambidexterity, an 11– item scale was adapted from Zhang et al., (2020).

Employee ambidexterity is reflected through both employee exploration and exploitation activities. Responses

were scored on a seven-point Likert-type scale ranging from 1 (strongly disagree) to 7 (strongly agree).

Ambidextrous leadership was measured by using a seven-point Likert-type scale ranging from 1(strongly

disagree) to 7 (strongly agree), which was adapted from: Rosing et al., (2011); Tuan Luu, (2017); Zacher and

Rosing (2015), respectively. The scale consisted of 14-items with two dimensions, namely, leader-opening

behaviours and leader-closing behaviours.

4.3. Control Variables

Prior studies confirmed that variables such as gender, age, education level, and tenure affect the constructs

of employee performance based on the immediate contexts in which employees operate (J. Zhang, Bal, et al.,

2018). In other words, controlling all these variables was found to be related to employee performance

(Kloutsiniotis & Mihail, 2018). Therefore, we controlled for gender, age, educational level, and organizational

tenure during the present study.

Int. Journal of Business Science and Applied Management / Business-and-Management.org

4.4. Test of Common Method Bias (CMB)

Common method bias is the inflation of true correlation among observable variables in a study (Podsakoff

et al., 2003). To mitigate this problem, Harman’s one-factor test was performed with confirmatory factor

analysis, where all indicators are purposely loaded on one factor to determine model fit. Accordingly, the first

factor explained 22.3%, which, as less than 50%, confirmed that there was no issue of bias. This aligns with

notions expounded by (Podsakoff et al., 2003) and thus confirmed the data’s suitability for subsequent statistical

analysis.

5. RESULTS

5.1. Descriptive Analyses

The demographic characteristics of the respondents consisted of 238 men (61.50%) and 149 females

(38.50%). The most dominant age group was found between 26-35 years (60.72%). More than half of the

respondents possessed a bachelor’s degree (n = 272, 70.3%), followed by respondents who possessed a master’s

degree (n = 91, 23.5%), and diploma holders (n = 24, 6.2%), respectively. Lastly, the highest percentage of the

respondents have been in service for 1 to 3 years in the present organization (n = 181, 46.8%) whereas

respondents whose length of service is of 8 to 10 years are small in number (n = 32, 8.3%).

Table 1 presents the descriptive statistics and correlations. As seen in Table 1, High-performance work

system was positively related to employee work performance (r = 0.361, p < 0.01) and employee ambidexterity

(r = 0.255, p < 0.01). Furthermore, employee ambidexterity was positively associated with employee work

performance (r = 0.365, p < 0.01).

Table 1. Mean, Standard Deviation, and Correlations among the Study Variables

Variables

Mean

High-Performance Work Systems

5.565

0.888

Employee Work Performance

5.581

0.599

0.361**

Employee Ambidexterity

5.924

0.731

0.255**

0.365**

Ambidextrous Leadership

5.645

0.793

0.315**

0.382**

0.579**

Gender

1.39

0.487

0.155**

0.067

0.059

0.034

Age

1.99

0.681

-0.133**

-0.184**

-0.065

-0.130**

-0.155**

Educational Level

2.17

0.518

-0.107*

-0.012

-0.082

-0.006

-0.152**

0.026

Experience

2.02

1.166

-0.236**

-0.183**

-0.030

-0.142

-0.135**

0.711**

-0.001

**. Correlation is significant at the 0.01 level (1-tailed).

*. Correlation is significant at the 0.05 level (1-tailed).

Note: N = 387. Gender (1 = Male, 2 = Female); Age (1 = 18-25, 2 = 26-35, 3 = 36-45, 4 = Above 45); Educational Level (1

= Diploma, 2 = BA/BSc Degree, 3 = MA/MSc Degree, 4 = Ph.D. Degree); Experience (1 = 1-3 years, 2 = 4-7 years, 3 = 8-

10 years, 4 = Above 10 years).

5.2. Measurement Model

To run the statistical analysis, covariance-based structural equation modelling (CB-SEM) was used in

testing the model. CB-SEM can facilitate the assessment of the measurement model and the structural model.

Additionally, each study variable is a reflective construct that complies with CB-SEM standards (Collier, 2020;

Hair et al., 2014).

5.2.1. Exploratory Factor Analysis

Exploratory factor analysis (EFA) has been applied for factor identification of the HPWS (the AMO model)

scale in Ethiopian settings. An EFA was performed using a principal component analysis and varimax rotation.

The minimum factor loading criterion was set to 0.50. The communalities of the scale, which indicates the

amount of variance in each dimension, were also assessed to ensure an acceptable level of explanation. Also in

factor analysis, the Eigen value represents the total variance explained by each factor. Factors with Eigen values

over one (1) are selected for further study (Hair et al., 2014). The result shows The Kaiser – Meyer – Olkin

measure of sampling adequacy was 0.896. The nine dimensions explained a total of 64.493 percent of the

variance among items in the study. The Bartlett’s Test of Sphericity proved to be significant, and all

communalities were over the required values of 0.500. The nine factors identified as part of this EFA aligned

with the theoretical proposition in this research.

5.2.2. Confirmatory Factor Analysis (CFA)

Confirmatory factor analysis (CFA) was computed using AMOS to test the measurement models. Collier

(2020) pointed out that a second-order CFA is also named a higher-order construct that is measured by latent

constructs. According to Hair et al. (2014), factor loadings greater than 0.50 are better to explain unobserved

constructs in the study. Therefore, after the variables are validated through EFA, as part of confirmatory factor

Amare Werku Ijigu, Abebe Ejigu Alemu and Abdurezak Mohammed Kuhil

analysis, factor loadings were assessed for each item. Hence, 24 items were removed due to low factor loadings

(< 0.50). The model fit measures were used to assess the model’s overall goodness of fit; Model Chi-Square

Test (CMIN/df,), Comparative Fit Index (CFI), Tucker Lewis Index (TLI), Standardized Root Mean Square

Residual (SRMR), and Root Mean Square Error of Approximation (RMSEA) and all values were within their

respective common acceptance levels (Bentler, 1990; Hu &Bentler, 1998; Schumacker & Lomax, 2004). Hence,

in testing the measurement model, the four-factor model (high-performance work system, employee work

performance, employee ambidexterity, and ambidextrous leadership) yielded good fit for the data: CMIN/df =

2.605, CFI = 0.923, TLI = 0.910, SRMR = 0.071, and RMSEA = 0.064.

5.3. Instrument Validity and Reliability

Construct reliability was assessed using Cronbach’s alpha and composite reliability. Cronbach’s Alpha for

each construct in the study was found to be over the required limit of 0.70 (Hinton et al., 2014). Composite

reliability ranged from 0.792 to 0.854, above the 0.70 benchmarks (Hair et al., 2014). Hence, construct

reliability was established for each construct in the study (Table 2). Convergent validity of the scale items was

estimated using Average Variance Extracted (AVE) (Fornell & Larcker, 1981). The average variance extracted

was above the required threshold value of 0.50 (Fornell & Larcker, 1981). Therefore, the scales used for the

present study have the required convergent validity (Table 2).

Table 2. Loadings, Reliability, and Convergent Validity

Items

Label

Loadings

AVE

High-performance work system

0.860

0.854

0.541

The appraisal system provides me with an accurate assessment of my

strengths and weaknesses

HPWS14

0.842

I have the opportunities I want to be promoted

HPWS13

0.726

The rewards I receive are directly related to my performance at work

HPWS11

0.746

Communication between departments is good

HPWS9

0.712

Communication within the department is good

HPWS8

0.638

Employee work performance

0.850

0.801

0.599

I know I can handle multiple assignments for achieving organizational

goals

TP4

0.763

I usually complete my assignments on time

TP5

0.776

I could manage change in my job very well whenever the situation

demands

AP2

0.652

I always believe that mutual understanding can lead to a viable solution in

the organization

AP4

0.815

I usually share knowledge and ideas among my team members

CP7

0.831

I usually maintain good coordination among fellow workers

CP8

0.782

I make problems greater than they were at work

CPWB2

0.814

I focus on the negative aspects of a work situation, instead of on the

positive aspects

CPWB3

0.849

I speak with colleagues about the negative aspects of my work

CPWB4

0.728

I speak with people from outside the organization about the negative

aspects of my work

CPWB5

0.790

I do less than was expected of me

CPWB6

0.890

I manage to get off from a work task easily

CPWB7

0.797

I sometimes do nothing, while I should have been working

CPWB8

0.905

Employee ambidexterity

0.845

0.792

0.657

Searching for new possibilities concerning

products/services, processes, or markets

EXPR1

0.815

Focusing on strong renewal of products/services or processes

EXPR2

0.892

Activities of which a lot of experience has been accumulated by yourself

EXPL1

0.726

Activities that serve existing (internal) customers with existing

services/products

EXPL3

0.886

Activities of which it is clear to me how to conduct them

EXPL4

0.755

Ambidextrous leadership

0.858

0.851

0.744

Allows different ways of accomplishing a task

LOB1

0.816

Encourages experimentation with different ideas

LOB2

0.880

Gives possibilities for independent thinking and acting

LOB4

0.715

Takes corrective action

LCB3

0.889

Controls adherence to rules

LCB4

0.807

Note: CA- Cronbach’s Alpha, CR- Composite Reliability, AVE- Average Variance Extracted

Int. Journal of Business Science and Applied Management / Business-and-Management.org

Discriminant validity in the study was assessed using the Fornell and Larcker criteria. Accordingly,

discriminant validity is established when the square root of AVE for the construct is greater than its correlation

with other constructs in the study (Fornell & Larcker, 1981). In the present study, discriminant validity was

established. The results of discriminant validity are presented in Table 3.

Table 3. Discriminant Validity of Study Variables

HPWS

EWP

HPWS

0.736

0.353***

0.862

0.211**

0.656***

0.810

EWP

0.289***

0.423***

0.647***

0.774

Note: HPWS – High-performance work system; AL – Ambidextrous leadership; EA – Employee ambidexterity; EWP –

Employee work performance

Significance of correlations: **P < 0.010 ***P < 0.001

5.4. Structural Model Assessment

A structural equation model generated through AMOS was used to test the relationship among the study

variables. A good fitting model is accepted if: the value of the CMIN/df is < 5, the model overall goodness of

fit; the Tucker Lewis Index (TLI), and the Comparative Fit Index (CFI) is > 0.90 (Hair et al., 2014). In addition,

an adequate fitting model was accepted as the AMOS computed value of the Standardized Root Mean Square

Residual (SRMR), and Root Mean Square Error of Approximation (RMSEA) is < 0.08 (Hu & Bentler, 1998).

Thus, to examine the cause-effect relationships, we tested the proposed model by using the AMOS Graphical

approach for structural equation modelling (SEM), which is shown in Table 4. Hence, the resulting model

provided a good fit for the data: CMIN/df = 3.133, CFI = 0.981; TLI = 0.90; SRMR = 0.026; RMSEA = 0.074.

Likewise, according to Collier (2020), common control variables can add value to model fit and can help to

retain significant relationships among study constructs. Thus, including control variables can be essential in

supporting the findings of the analysis. Therefore, the first step in SEM is to verify the effect of controlling

variables (Gender, Age, Education Level, and Experience) on employee work performance.

Table 4. Structural Model Assessment

Relationships

Estimate

S.E.

C.R.

InteractionHPWSxAL → EA

.109

.030

3.649

***

AL → EA

.452

.041

10.960

***

HPWS → EA

.043

.031

1.382

.167

EA → EWP

.253

.038

6.722

***

HPWS → EWP

.134

.027

4.985

***

Gender → EWP

.017

.059

.283

.777

Age → EWP

-.052

.059

-.893

.372

Education → EWP

.095

.055

1.725

.085

Experience → EWP

-.039

.035

-1.125

.261

Note: HPWS – High-performance work system; EWP – Employee work performance; EA – Employee ambidexterity; AL –

Ambidextrous leadership. *** - p < 0.01

As noted in Table 4, gender, age, education, and experience do not have a significant relationship with

employee work performance. In other words, the control variables for this study have an inconsequential

influence on the model. Therefore, the demographic variables for this study are excluded from further analysis

(Collier, 2020).

5.5. Hypothesis Testing

5.5.1. Discussion of Direct, Indirect, and Interaction Effects

The next part of the data analysis was testing the proposed hypotheses. Taking into account the moderation

mediation analysis, first, we tested the direct relationship among the study variables. Hence, three hypotheses

were proposed by the researchers. As shown in Table 4, a high-performance work system has a significant

positive effect on employee work performance (β = 0.134, t = 4.985, p < .001), supporting Hypothesis 1.

Likewise, employee ambidexterity has a significant positive effect on employee work performance (β = 0.253, t

= 6.722, p < .001), supporting Hypothesis 3. However, taking the moderation mediation into consideration, a

high-performance work system was not significantly affected by employee ambidexterity (β = 0.043, t = 1.382,

p > 0.05), and failed to support Hypothesis 2. In addition, the study assessed the indirect effect of employee

Amare Werku Ijigu, Abebe Ejigu Alemu and Abdurezak Mohammed Kuhil

ambidexterity on the relationship between a high-performance work system and employee work performance.

The results revealed that the indirect effect of employee ambidexterity in the relationship between a high-

performance work system on employee work performance in the presence of the moderator (Ambidextrous

leadership) was positive and but not significant (β = 0.011, p > 0.05), and the result failed to support Hypothesis

The study assessed the moderating effect of ambidextrous leadership on the relationship between a high-

performance work system and employee ambidexterity. The moderation analysis summary is presented in Table

Table 5. Moderation Analysis Summary

Relationship

Beta

P-Value

HPWS→EA

0.043

1.382

0.167

AL→EA

0.452

10.960

0.000

InteractionHPWS*AL→EA

0.109

3.649

0.000

Note: HPWS – High-performance work system; EA – Employee ambidexterity; AL – Ambidextrous leadership

The result revealed a positive and significant moderating effect of ambidextrous leadership on the

relationship between a high-performance work system and employee ambidexterity (β = 0.109, p = 0.000),

supporting Hypothesis 5.

The final analysis part was testing the moderated mediation analysis. As presented in Table 6, the last test

we need to assess is if the construct of ambidextrous leadership is significantly moderating the indirect effect.

That means, we need to assess if the indirect effect is being moderated. This is assessed by the index of

moderated mediation value. The bootstrap analysis examines if the slope is significantly different from zero,

which indicates that moderated mediation is taking place (Collier, 2020). The analysis result of the above table

gives the lower and upper bound of the bootstrap test. In the unstandardized indirect effects, the findings

indicated that there was an indirect effect of the interaction term (through employee ambidexterity) on employee

work performance (β = 0.027, p = 0.008), which is less than 0.05, supporting Hypothesis 6. Thus, we can

conclude that the indirect effect of employee ambidexterity in the relationship between a high-performance

work system and employee work performance moderated by ambidextrous leadership.

Table 6. Reporting Moderated Mediation

Direct Relationship

Unstandardized

Coefficient

T-Values

High-performance work system→ Employee ambidexterity

0.043

1.382

InteractionHPWS*AL→ Employee ambidexterity

0.109

3.649

Ambidextrous leadership →Employee ambidexterity

0.452

10.960

High-performance work system →Employee work performance

0.134

4.985

Employee ambidexterity → Employee work performance

0.253

6.722

Moderated Indirect Relationship

Direct

Effect

Indirect

Effect

Confidence Interval

Low/High

P-Values

HPWS→EA→EWP

0.043

0.011

-0.002/0.032

0.103

Probing Moderated Indirect Relationships

Low level of Ambidextrous leadership

-0.021

-0.055/0.004

0.090

High level of Ambidextrous leadership

0.043

0.016/0.084

0.001

Index of Moderated Mediation

0.027

0.008/0.053

0.008

6. DISCUSSION

The purpose of this study is to examine the moderating effect of ambidextrous leadership and the mediating

role of employee ambidexterity in the relationship between HPWS and employee work performance. Hence, the

study findings indicate that the effect of a high-performance work system on employee work performance was

positive and significant. In other words, the advantages of HPWS are frequently attributed to the abundance of

opportunities for performance enhancement that they offer. Then, these rewards are viewed favourably by

employees, who then take constructive action by exerting more effort. These findings are consistent with prior

studies (Behravesh et al., 2019; Bhatti et al., 2021; Carvalho & Chambel, 2015; de Reuver et al., 2019; Imran &

Atiya, 2020; Kloutsiniotis & Mihail, 2020; Nadeem, Riaz, & Danish, 2019; Su et al., 2019). In particular, job

performance is positively and significantly influenced by HPWS (Imran & Atiya, 2020). In addition, the effect

Int. Journal of Business Science and Applied Management / Business-and-Management.org

of a high-performance work system on employee ambidexterity was positive but not significant. This suggests

that increased HPWS encourages employees to participate in exploitative and exploratory behaviours by sending

them a signal that their concerns are taken seriously. This finding is compatible with prior studies (Huang &

Kim, 2013; Malik, Pereira, et al., 2017; Zheng et al., 2020). Furthermore, the effect of employee ambidexterity

on employee work performance was positive and significant. This finding is congruent with prior studies

(Kobarg et al., 2015; J. A. Zhang et al., 2020). Particularly, employees' balanced pursuit of exploitative and

exploratory activities has a positive impact on individual performance in the public sector (Kobarg et al., 2015).

Moreover, with the presence of the moderator, the study results confirmed that employee ambidexterity failed to

mediate significantly the relationship between a high-performance work system and worker work performance.

Also, the findings of this study indicated that the excessive stage of ambidextrous leadership had a noticeably

better effect on the relation with employee ambidexterity compared to the impact of a low degree of

ambidextrous leadership (Alghamdi, 2018). Finally, ambidextrous leadership moderates the mediation effect of

employee ambidexterity between a high-performance work system and employee work performance in such a

way that the mediation effect is enhanced when ambidextrous leadership is high compared to when it is low.

This result implies that given ambidextrous leadership interacted significantly with HPWS towards employee

work performance, this supports the notion that high ambidextrous leadership is better able to leverage

employee ambidexterity to achieve a greater employee work performance. This result was consistent with prior

studies, such as a study conducted in Korean manufacturing firms that disclosed that the interaction effect of

external search breadth and depth on a firm’s innovation performance through the simultaneous pursuit of

exploitation and exploration of innovation is stronger in the presence of higher levels of absorptive capacity

(Kim et al., 2019). Similarly, a study conducted on Chinese firms revealed that high levels of exploration

(exploring new resources) and exploitation (exploiting existing resources) or that had a high level of exploration

experienced higher performance (Fu et al., 2015).

7. CONCLUSION

In this turbulent work environment, it is obligatory to ensure a high-performance work system to enhance

employee work performance to assist the company to meet the desired goals. This study aimed to expand our

appreciation of the role of HPWS in overall employee work performance by way of investigating the mediating

impact of employee ambidexterity. Hence, the results confirmed that employees’ understanding of ambidextrous

leadership plays a substantial role as a moderator in the relationship between a high-performance work system

and employee work performance. Moreover, excessive stages of ambidextrous leadership beef up the interaction

between HPWS and employee work performance. Therefore, the distinct position of employee ambidexterity

and ambidextrous leadership must be taken into account to wholly understand the technique through which

high-performance work system enhances worker work performance.

8. THEORETICAL AND PRACTICAL IMPLICATIONS

8.1. Theoretical Implications

Overall, our research makes four contributions to the current theory. First, it is presumed that employee

work performance is significantly influenced by employee ambidexterity and HPWS. In fact, little research has

examined the impact of HPWS on employee work performance, even though it offers an effective structure that

promotes improved organizational performance (Edgar et al., 2020). Second, in response to the demand for

more research, the current study reveals a potential mediator, employee ambidexterity, as well as a moderating

factor, ambidextrous leadership, that may be useful in revealing the connection between HPWS and employee

work performance. Hence, the significance of some undiscovered mediators and moderators, in particular,

controls the link between HRM and performance. Third, the study broadens the understanding of the link

between HPWS and performance and offers sufficient empirical evidence for social exchange theory and the

AMO framework (Huselid, 1995; Jyoti & Dev, 2016; J. Zhang et al.,2018). In other words, within the context of

social exchange theory and the AMO framework, HPWS can develop a superior workforce and HPWS can

continue to enhance knowledge, skills, and abilities (KSAs), enabling better performance than competitors.

Thus, the research offers sufficient justification for recognizing social exchange theory as an academic model

for the potential relationship between the HPWS and employee work performance. Finally, this study was done

in a state-owned enterprise, which fills the research gap that existed in public organizations.

8.2. Practical Implications

Our study has three practical implications. First, the results of the study revealed that both the AMO-based

HPWS and employee exploitation and exploration activities play an essential role in regulating employee work

performance. Second, Ethio-Telecom leaders should balance and leverage their opening and closing behaviour

since high ambidextrous leadership is more responsive to employee work performance. Finally, this study serves

Amare Werku Ijigu, Abebe Ejigu Alemu and Abdurezak Mohammed Kuhil

as input for Ethio-Telecom to devise policies to compete with incoming firms and capture the highest market

share. To sum up, the study result reveals that the supervisors' highly ambidextrous leadership behaviours and

well-crafted HPWS enhance the sales representatives' desire to engage in both exploitative and exploration

activities, which in turn enhances employee work performance. In light of this, to keep employee work

performance, it makes sense to ensure employees engage in simultaneous pursuit of exploitation and exploration

activities and preserve the good practice of HPWS. Moreover, to significantly impact employee work

performance, ambidextrous leadership is required. This empowers the organization to lead its staff to the

required level of performance.

9. LIMITATIONS AND FUTURE RESEARCH DIRECTIONS

Although our study does make some contributions, there are still several flaws. First, this study was purely

quantitative by nature, which may jeopardize the findings of the study. Second, the study was cross-sectional,

with data being collected once from sales representatives, which may affect the research output. Therefore,

taking these limitations into account, we call on future researchers to undertake a study in one of the following

future research directions. First, explore the effect of HPWS on employee work performance at the various

levels of analysis such as a team and/or organizational level. Second, a longitudinal research design is better to

figure out the level of employee work performance by collecting data over time. Third, future research should

incorporate qualitative data that allow triangulation with quantitative information. Finally, to further

comprehend the indirect and interaction effects on the relationship between HPWS and employee work

performance, a possible researcher may locate another pertinent mediator, such as Hofstede's theory of culture,

and a moderating variable, such as leader-member exchange (LMX).

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