The Moderating Effect of Internal Fit in the Relationship between HPWS and Financial Performance in Public Enterprises in Ethiopia

This research determined the moderating effect of internal fit in the relationship between the high performance work system (HPWS) and financial performance of public enterprises in Ethiopia. The participants of the study were top, middle, and lower level managers of the public enterprises. Stratified random sampling was used since the population consists of different organizations. Then simple random sampling was employed to ensure that all managers of the public enterprises had equal chance of being selected to avoid sample bias and ensure that the results were reliable enough to be generalized. The researcher used structured questionnaire to collect data from the respondents. Structural equation modeling (SEM) technique was used to perform the data analysis of the study. The data were analyzed by using statistical package for the social sciences (SPSS) 27 and analysis of moment structures (AMOS) 26 software. Issues related to the ethical conduct of research such as informed consent and confidentiality were upheld. The findings of the study show that internal fit does not have significant moderating effect in the direct relationship between HPWS and human resource (HR) outcome, operational outcome, and financial performance of the public enterprises; moreover, the moderating construct does not moderate the indirect relationship between the HPWS and financial performance of the public enterprises via HR outcome and operational outcome.