Relational Coordination Among Service Providers: Impact of HPWS on Functional and Unit-Level Banking Performance

Abstract

This paper seeks to identify a potential mechanism over which HPWS influences performance. Using relational coordination theory, this paper assesses communication and relational ties of relational coordination as a potential link over which HPWS can affect unit-level performance in banks which are characterized as highly uncertain, interdependent, as well as time-bound. Primary data were collected from bank officers about the strength of HPWS and relational coordination among employees. Results indicate that HPWS was significantly associated with bank performance outcomes, including branch levels of deposits, loans, and net profit. Results also indicate that RC significantly mediated the linkages between HPWS and unit-level performance outcomes. These results suggest new insights for top management and HR leaders in the banking industry regarding the design of HPWS.