Abstract:
In today’s business environment, establishing a positive climate is becoming increasingly important for
organizational growth and performance. A positive employee relations climate creates a social atmo sphere, which encourages high employee involvement and an employee-centered culture. In response,
employees feel comfortable and contribute positively to organizational performance. Given the inten sity of competition in the service industry, banks must understand how the employee relations climate
and HRM practices affect organizational performance. Banks also need to know which employee rela tions climate best meets the needs of the organization. Accordingly, this study examined the way the
employee relations climate mediates the relationship between strategic HRM practices and organiza tional performance in Chinese banks. Senior employees of Chinese banks based in Shanghai provided
data by responding to a survey questionnaire. CFA and SEM in AMOS 18 were used to test the hypotheses
and evaluate measurement validity. The results indicate that strategic HRM has a significant positive
relationship with operational performance. In addition, the employee relations climate was found to
mediate the relationship between strategic HRM and organizational performance. Cross-sectional data, a
restricted target sample (i.e., bank employees), and a restricted target area (i.e., Shanghai) are limitations
of this study. In addition, the dimensions of organizational performance were not identified in detail.
Finally, the hypothesized relationship was explored only for a specific sector (i.e., the banking sector).
