THE IMPACT OF HIGH-PERFORMANCE HRM PRACTICES ON EMPLOYEE PERFORMANCE THROUGH CHANGE READINESS BANKING IN INDONESIA

Abstract

This study aims to analyze the influence of High Performance HRM Practices (HPHRMP) on employee performance, with readiness to change as a mediating variable in banking employees in Indonesia. The banking sector is currently facing digital transformation that requires the psychological readiness of employees to adapt to changes in the work system. This study uses a quantitative approach with a causal design. Data was collected through an online questionnaire that was distributed to 109 selected banking employees using purposive sampling techniques. Data analysis was carried out using Partial Least Square-Structural Equation Modeling (PLS-SEM) with the help of SmartPLS software. The results of the study show that HPHRMP has a positive and significant effect on employee performance and readiness to change, readiness to change also has a positive and significant effect on employee performance, and readiness to change has been proven to partially mediate the influence of HPHRMP on employee performance. These findings reinforce the role of Social Exchange Theory in explaining how high-performance human resource management practices are able to simultaneously drive psychological readiness and employee performance. This research provides a theoretical contribution to the development of strategic human resource management literature, as well as a practical contribution in the form of recommendations for banking management in designing HRM policies that are able to build employee psychological readiness in the midst of digital transformation.