Mutual Gains? Health-Related HRM, Collective Well-Being and Organizational Performance

Abstract

Research on the effects of HR management on employees’ psychological well‐being has yielded inconclusive results. Moreover, prior works remain unclear on whether human resource practices specifically aimed at enhancing employee well‐being also benefit organizational performance. Building on signaling theory and conservation of resources theory, our study investigates the relationship between health‐related human resource management (HHRM), employees’ collective well‐being (in terms of collective emotional exhaustion and collective engagement) and organizational performance. Results from a multi‐source field study of top management team members, HR representatives, and 15,952 employees in 88 organizations reveal a positive indirect relationship between HHRM and employees’ collective well‐being, which is mediated by employees’ positive stress mindset. In addition, we find this positive indirect association to depend on the level of transformational leadership climate in organizations. Finally, our findings also show a positive indirect relationship between HHRM and company performance, mediated by employees’ positive stress mindset and collective engagement.

Full text

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE
MUTUAL GAINS?
HEALTH-RELATED HRM, COLLECTIVE WELL-BEING AND
ORGANIZATIONAL PERFORMANCE
Hendrik Huettermann & Heike Bruch
University of St. Gallen
Author Note
Hendrik Huettermann, Institute for Leadership and Human Resource Management,
University of St. Gallen, Switzerland; Heike Bruch, Institute for Leadership and Human Resource
Management, University of St. Gallen, Switzerland.
Correspondence concerning this article should be addressed to Hendrik Huettermann,
University of St. Gallen, Institute for Leadership and Human Resource Management,
Dufourstrasse 40a, 9000 St. Gallen, Switzerland, Phone: +41 71 224 2377, Fax: +41 71 224
2374, E-mail: hendrik.huettermann@unisg.ch

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE
This article has been accepted for publication and undergone full peer review, but has not been
through the copyediting, typesetting, pagination and proofreading process which may lead to
differences between this version and the version of record
(https://doi.org/10.1111/joms.12446).
Please cite this article as: Huettermann, H., & Bruch, H. (2019). Mutual gains? Health-related
HRM, collective well-being and organizational performance. Journal of Management Studies, 56,
1045–1072.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE
MUTUAL GAINS?
HEALTH-RELATED HRM, COLLECTIVE WELL-BEING AND
ORGANIZATIONAL PERFORMANCE
Abstract
Research on the effects of HR management on employees’ psychological well-being has yielded
inconclusive results. Moreover, prior works remain unclear on whether human resource practices
specifically aimed at enhancing employee well-being also benefit organizational performance.
Building on signaling theory and conservation of resources theory, our study investigates the
relationship between health-related human resource management (HHRM), employees’ collective
well-being (in terms of collective emotional exhaustion and collective engagement) and
organizational performance. Results from a multi-source field study of top management team
members, HR representatives, and 15,952 employees in 88 organizations reveal a positive indirect
relationship between HHRM and employees’ collective well-being, which is mediated by
employees’ positive stress mindset. In addition, we find this positive indirect association to depend
on the level of transformational leadership climate in organizations. Finally, our findings also show
a positive indirect relationship between HHRM and company performance, mediated by
employees’ positive stress mindset and collective engagement.
Keywords: health-related human resource management; stress mindset; employee well-being;
organizational performance.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 1
Given the increasing number of work-related psychological illnesses, creating a
psychologically healthy workplace is considered a major challenge for organizations to sustain a
long-term competitive advantage (Grawitch et al., 2015). One factor that is considered to play a
key role for enhancing employee well-being is human resource (HR) management (Guest, 2017).
However, research on the effects of HR management on employees’ psychological well-
being has yielded inconclusive results (for two comprehensive reviews, see Peccei et al., 2013; van
de Voorde et al., 2012). Moreover, prior works have developed contradictory theoretical
perspectives on the relationship between HR management, employee well-being and company
performance: On the one hand, a “mutual gains” perspective considers HR management to benefit
both employee well-being and organizational performance (e.g., Appelbaum et al., 2000).
On the other hand, a “conflicting outcomes” view suggests that well-being and performance are
distinct organizational goals, which can be achieved by different sets of HR practices (e.g., Godard,
2004).
Existing empirical studies thus provide ambiguous evidence and call for further research to
investigate how (i.e., through what mechanisms) and when (i.e., depending on what contingencies)
HR management may positively relate to employee well-being (van de Voorde et al., 2012).
Moreover, empirical analyses are needed to assess whether HR practices that specifically aim at
enhancing employee well-being are also positively associated with organizational performance
(Guest, 2017; Paauwe et al., 2013). Our study addresses these research gaps by shedding light on
the relationship between HR management, employee well-being and organizational performance.
For this purpose, we develop and test an organizational-level model that is reflective of the “mutual
gains” perspective and investigates the role of health-related human resource management
(HHRM), a system of HR practices and principles that is specifically aimed at maintaining and
promoting employees’ psychological well-being.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 2
Guided by general frameworks for the effects of HR management (Nishii and Wright, 2008;
Ostroff and Bowen, 2000) and building on signaling theory (Spence, 1973) as well as conservation
of resources theory (Hobfoll, 1988), we posit that HHRM positively relates to employees’ positive
stress mindset—the extent to which employees in an organization hold the mindset that stress can
be a source of personal growth, well-being, and performance (Crum et al., 2013). Such a positive
stress mindset, in turn, is assumed to be positively linked to collective well-being in terms of lower
levels of collective emotional exhaustion (i.e., employees’ shared perceptions of how emotionally
drained their colleagues are from their work; Gonzalez-Morales et al., 2012) and higher levels of
collective engagement (i.e., employees’ shared perceptions of how physically, cognitively, and
emotionally invested their colleagues are in their work; Barrick et al., 2015). Due to the beneficial
association with employees’ positive stress mindset and collective well-being, we expect HHRM
to also show a positive indirect relationship with company performance (see Figure 1).
------ INSERT FIGURE 1 ABOUT HERE ------
Taking a contingency perspective, we furthermore examine the moderating role of
transformational leadership climate. Consistency in messages sent across organizational sources
has been argued to be essential for creating strong situations in which employees unambiguously
interpret the signals sent by HR management (Bowen and Ostroff, 2004). Thus, we expect that the
positive relationships of HHRM with employees’ positive stress mindset and collective well-being
depend on the degree to which the signals sent by organizational leadership are consistent with HR
management’s focus on valuing and promoting employee well-being (see Figure 2). As such, in
particular transformational leadership climate (i.e., the extent to which leaders throughout an
organization engage in transformational leadership behaviors; Menges et al., 2011) should signal
to employees that leaders take care of their followers’ well-being (Montano et al., 2017).
------ INSERT FIGURE 2 ABOUT HERE ------

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 3
Our study contributes to illuminating the inconsistent picture of prior research on the
relationship between HR management, employee well-being and organizational performance.
First, we propose employees’ positive stress mindset as a conceptual mechanism underlying the
association between HHRM and well-being. Thereby, our analysis suggests the mindset concept
(Dweck, 2008) as a new and promising approach for the HR literature. Second, we investigate
leadership as a contingency of HHRM (van de Voorde and Boxall, 2014). Contrary to prior
research, which mainly treats HR and leadership as substitutes for each other, we propose that HR
management and organizational leaders act as synergistic partners in the relationship with
employee well-being. Third, we address the ongoing theoretical debate concerning the performance
consequences of the relationship between HR management and well-being (Peccei et al., 2013).
By empirically investigating a model that is reflective of the “mutual gains” perspective, our
analysis makes a step toward advancing this debate and scrutinizes whether health-specific HR
systems are positively associated with both employee well-being and company performance.
Thereby, our study also echoes calls for more “balanced approaches” in the strategic HR literature
(e.g., Lepak and Boswell, 2012; Paauwe, 2009) and for putting employee well-being center-stage
in the relationship between HR management and performance.
THEORETICAL BACKGROUND AND HYPOTHESIS DEVELOPMENT
In developing our theoretical model, we draw from general frameworks of the relationship
between HR management and employee well-being (Peccei et al., 2013; van de Voorde and Boxall,
2014) as well as organizational effectiveness (Bowen and Ostroff, 2004; Nishii and Wright, 2008;
Ostroff and Bowen, 2000). Overall, these models suggest that HR management can enhance well-
being and thereby increase performance, thus following the “mutual gains” perspective. Yet, they
acknowledge that these relationships are complex, and stress the particular relevance of employees’
attitudes as a mediating mechanism; moreover, they refer to leadership as a contingency.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 4
Health-Related Human Resource Management (HHRM)
We define health-related human resource management (HHRM) as a system of HR
practices and principles that is specifically aimed at maintaining and promoting employees’
psychological well-being. In elaborating our conceptualization of HHRM, we build on HR
principles and practices that have been discussed as effective means for creating a psychologically
healthy workplace (e.g., Browne, 2000; Grawitch et al., 2006, 2015; Kelloway and Day, 2005). We
also consider institutional initiatives, such as the psychologically healthy workplace program by
the American Psychological Association (APA, 2016), the quality criteria by the European
Network of Workplace Health Promotion (ENWHP, 1999), and the healthy workplace model by
the World Health Organization (WHO, 2010). Based on these sources, we identify four key
principles and practices for effective HR psychological health promotion.
First, a comprehensive approach to HHRM embraces HR practices pertaining to both
prevention of and recovery from work-related psychological health problems (Giga et al., 2003).
Related to this principle, the public health model proposes three levels of intervention for
occupational health management (Tetrick and Quick, 2011). Primary and secondary level
interventions are preventive, eliminating potential risk factors to psychological well-being from the
work environment and providing employees with tools to insulate them against potential health
risks (e.g., stress training programs). Tertiary level interventions, in contrast, focus on helping
employees recover from existing psychological health problems (Grawitch et al., 2015). The
second principle of comprehensive HHRM pertains to explicitly considering leaders as a target
group for health-related HR practices (Kelloway and Day, 2005), as leaders’ psychological health
and behavior are considered to play a crucial role for employee well-being. Third, the critical role
of top management support has been repeatedly emphasized, thereby pointing to the particular
relevance of top management communication to encourage participation in health-related HR

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 5
practices (Grawitch et al., 2006). Fourth, an ongoing evaluation of HHRM is indispensable to
ensure that it is effective and sustainable (Biron and Karanika-Murray, 2014).
In addition, we align our conceptualization of HHRM with the literature on strategic HR
systems which proposes that HR benefits strategic objectives by influencing employees’ (a)
knowledge, skills, and abilities, (b) motivation and effort, and (c) opportunities to contribute (Jiang
et al., 2012). Hence, we assume that HHRM will be most effective when it relates to all three policy
domains (Lepak et al., 2006). For strengthening health-related knowledge, skills, and abilities,
HHRM should include HR practices aimed at training and educating employees, either to enable
them to adequately manage stress or to help them recover from existing health problems (Luthans
et al., 2006). With regard to motivation and effort, HHRM should motivate employees to adopt a
healthy style of working and living. For example, it may reward psychologically healthy work
behavior, such as participation in health-related HR measures for stress management (ENWHP,
1999). Lastly, HHRM should promote the opportunity to contribute by, for instance, offering
employees the possibility to flexibly adapt their job design (e.g., working hours) to their state of
psychological health (Kelloway and Day, 2005). Moreover, HHRM may also involve employees
in the design of health-related HR measures (Grawitch et al., 2015).
In sum, we define HHRM as a system of health-related HR practices and principles that
focus on prevention of and recovery from psychological illnesses, include both employees and
leaders as target groups, receive support from the top management, and are systematically
evaluated. In addition, HHRM will be most effective when it promotes employees’ abilities,
motivation, and opportunities to contribute to creating a psychologically healthy workplace.
HHRM and Collective Well-Being: Employees’ Positive Stress Mindset as a Mediator
Stress mindset defined. Stress mindset refers to a general attitude toward the nature and
consequences of stress which influences individuals’ stress response (Crum et al., 2013). Building

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 6
on the notion of mindsets as interpretative mental frames for focusing attention and organizing
information (Dweck, 2008), a stress mindset can orient individuals toward a unique understanding
of stressful experiences and direct them toward corresponding reactions.
Mindsets have received increasing scholarly attention in recent years, in particular sparked
by the works of Dweck (1999, 2008) showing that individuals can substantially differ in their
beliefs about whether human attributes (such as intelligence) are malleable and can develop over
time. The powerful influence of mindsets on individuals’ motivation, behavior, and well-being has
also been demonstrated in relation to other targets such as aging, physical exercise, or food
consumption. Building on a considerable body of research that proves potentially positive
consequences of stress, Crum et al. (2013) introduce the concept of a positive “stress-is-enhancing”
mindset, in which individuals consider stress to have beneficial effects for their personal growth,
well-being, and performance. Indeed, extant research has found evidence for a “stress-related
growth” phenomenon, indicating that stressful experiences can increase physiological and mental
functioning, enhance mental toughness, and instill a sense of mastery (e.g., Park and Helgeson,
2006).
Crum et al. (2013) have proved a positive stress-related mindset to be conceptually and
empirically distinct from other variables determining stress response. They show that stress
mindset is largely independent from the amount and severity of stress one is experiencing and also
differs from the appraisal of specific stressors as well as the choice of coping strategies. That is,
while one may experience a specific work demand as stressful, one can have the mindset that the
consequences of this stress may ultimately result in enhanced outcomes. Moreover, while one’s
stress mindset may serve as a mental context in which coping actions are chosen, it does not
constitute a coping strategy itself. Rather, it refers to a meta-cognitive attitude toward the nature of
stress in general, which acts as a selective lens for making sense of stressful situations.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 7
A positive stress mindset has shown to lead to enhanced stress response in terms of
physiological reactions, effective behavioral approaches to stress, and subjective well-being (Crum
et al., 2013, 2017). Moreover, prior studies have demonstrated that individuals’ positive stress
mindset can be systematically altered by ambient stimuli signaling that stress can be utilized as a
source of personal growth, well-being, and performance (Crum et al., 2013, 2017). These findings
concur with evidence from other domain-specific mindsets which has also proved that mindsets
can be changed quite readily by establishing a context which orients individuals toward mindset-
relevant information (e.g., Blackwell et al., 2007; Dweck, 2008).
In our analysis, we examine employees’ positive stress mindset in organizations—that is,
the extent to which employees in an organization on average hold the mindset that stress can be a
source of personal growth, well-being, and performance. In the following section, we examine the
role of HHRM with regard to employees’ awareness of the potentially enhancing nature and
consequences of stress.
HHRM and employees’ positive stress mindset. HR management has been argued to
serve a signaling function of an organization’s intentions toward its employees (Bowen and Ostroff,
2004). We combine this rationale with signaling theory which states that information asymmetry
between parties is reduced when one party (the sender) communicates signals to another party (the
receiver) conveying information about the underlying qualities of the sender in terms of the ability
to fulfill the needs of the receiver (Spence, 1973, 2002). Thus, we hypothesize that HHRM signals
to employees that the organization cares about their well-being and offers support for making
positive use of stress for personal growth and well-being, thereby positively relating to their stress
mindset. This assumption also resonates with social information processing theory which posits
that individuals’ social environment can provide important cues for the development of their
attitudes (Salancik and Pfeffer, 1978).

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 8
In organizations that have implemented HHRM, a bundle of health-related HR practices
signal to employees that their company provides instrumental resources for effectively managing
stressful work challenges (Connelly et al., 2011). Among others, they see their organization
offering trainings for productively mastering high work demands, observe the possibility that
employees’ job designs can be flexibly adapted to the state of psychological health, and realize that
their company provides support for preventing potentially deleterious effects of stress. The
signaling effect of these practices is further reinforced by the perception that the organization’s top
management shows commitment for a psychologically healthy workplace and HR attempts to
involve employees into the design of health-related HR practices (Grawitch et al., 2015).
Following from the signals sent by HHRM, employees perceive multiple informational cues
from the organizational environment communicating optimism that stressful requirements at work
can be successfully approached (Salancik and Pfeffer, 1978). Therefore, employees’ overall
confidence toward work demands should be higher in organizations that have implemented
HHRM, making them more apt to evoke feelings of positive challenge. Specifically, they are more
likely to perceive stressful challenges at work as opportunities that can be realized, offering
potential for personal growth, increased mastery, and enhanced accomplishment. This assumption
also resonates with research on social cognitive theory (Bandura, 1997) and organizational support
theory (Rhoades and Eisenberger, 2002) which has shown that signals of organizational support
provide a modeling function that alters employees’ positive attitudes toward work-related
challenges and increases their perceived mastery, leading to perceptions of opportunities for
personal development. In sum, the signals sent by HHRM should be positively associated with
employees’ notion that stress can also be utilized as a potential source of increased growth, well-
being and performance, thus relating to a positive mindset about the potentially enhancing nature
of stress (Crum et al., 2013).

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 9
Hypothesis 1: Health-related human resource management (HHRM) is positively
associated with employees’ positive stress mindset.
Employees’ positive stress mindset and collective well-being. Based on conservation of
resources theory, we expect a positive stress mindset to favorably relate to employee well-being.
According to Hobfoll (1988), individuals are motivated by striving to both protect current resources
and acquire new resources to prevent future resource loss. A positive stress mindset enables
employees to both retain and acquire resources. Holding the mindset that stress can be a source of
growth and well-being, they are less likely to perceive high job demands as a threat to their
resources and are able to prevent resource loss. In a similar vein, they evaluate possibilities for
acquiring new resources more positively; they realize that productively using stress to increase
personal mastery and goal accomplishment helps to build resources to prepare for future work
demands. Hence, we expect beneficial associations of a positive stress mindset with two indicators
of well-being: collective emotional exhaustion and collective engagement. Thereby, we follow the
notion of psychological well-being not merely as the absence of mental health problems, but also
as the ability to feel energetic and dedicated at work (Schaufeli and Bakker, 2004).
Emotional exhaustion describes a work-related stress reaction in which individuals feel
overextended and perceive their emotional and physical resources to be depleted (Maslach et al.,
2001). Gonzalez-Morales et al. (2012) define collective emotional exhaustion as employees’ shared
perceptions about how emotionally drained their colleagues are at work. Engagement, in contrast,
can be defined as a positive affective-motivational work-related state of mind associated with vigor,
dedication, and absorption (Schaufeli and Bakker, 2004). Collective engagement refers to
employees’ shared perceptions about the extent to which members of an organization are
physically, cognitively, and emotionally invested in their work (Barrick et al., 2015).
As for exhaustion, a positive stress mindset is positively associated with individuals’ ability

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 10
to achieve a moderate level of arousal when confronted with stressful situations (Crum et al., 2013).
Such a moderate level of arousal has been found to be ideal for well-being and performance, as it
is sufficient for meeting stressful demands but prevents resource loss and harmful health
consequences, thus serving as a potential safeguard against exhaustion. As for engagement, a
positive stress mindset is likely to positively relate to employees’ motivation to fully invest their
physical, cognitive, and emotional resources into work. By becoming aware that making positive
use of stress increases their personal growth and mastery—thus providing new resources to meet
future work demands (Hobfoll, 2011)—employees may be motivated to search for new challenges,
persistently strive for goal attainment, and remain resilient in the face of difficulties. Hence, their
vigor and dedication at work should be higher (Schaufeli and Bakker, 2004).
Therefore, a positive stress mindset is likely to positively relate to collective well-being in
terms of low levels of collective emotional exhaustion and high levels of collective engagement.
In combination with Hypothesis 1, HHRM is thus expected to show a positive indirect relationship
with both indicators of well-being, which is mediated by employees’ positive stress mindset.
Hypothesis 2a: Employees’ positive stress mindset is negatively associated with collective
emotional exhaustion.
Hypothesis 2b: Employees’ positive stress mindset is positively associated with collective
engagement.
Hypothesis 3a: Employees’ positive stress mindset mediates the negative indirect
association between HHRM and collective emotional exhaustion.
Hypothesis 3b: Employees’ positive stress mindset mediates the positive indirect association
between HHRM and collective engagement.
Collective Well-Being and Organizational Performance
The “happy productive worker” thesis (Cropanzano and Wright, 2001) suggests that healthy

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 11
and motivated employees are more likely to contribute to productivity-related behaviors that
benefit organizational effectiveness. Thus, collective emotional exhaustion should negatively relate
to performance (Taris, 2006). On the one hand, employees’ individual resources for accomplishing
their work are likely to be drained, thus being associated with diminished individual performance
which should also impair overall company effectiveness. On the other hand, an environment in
which employees are emotionally exhausted can have implications for the availability of collective
resources. In such a context, individuals may experience a lack of support from their exhausted
coworkers. As a consequence, task-related cooperation and personal relationships could suffer,
thereby negatively relating to collaboration and productivity (Gonzalez-Morales et al., 2012).
In contrast, in organizations with high collective engagement, employees are likely to fully
invest their efforts and abilities into work (Schaufeli and Bakker, 2004), thus speaking to a positive
relationship with individual performance which can also benefit overall company effectiveness. In
addition, shared perceptions of high employee work involvement may instill a collective sense of
vigor, which can be associated with increased productivity. Moreover, social comparison processes
and the normative influence of their peers may prompt employees to increase their level of
engagement to that of high-performing coworkers, thereby showing behaviors that positively relate
to organizational performance (Barrick et al., 2015).
As both collective emotional exhaustion and collective engagement are proposed to be
indirectly associated with HHRM via employees’ positive stress mindset, it can be expected that
there is a positive indirect relationship between HHRM and organizational performance. This
indirect relationship, then, is serially mediated by employees’ positive stress mindset as well as
low levels of collective emotional exhaustion and high levels of collective engagement.
Hypothesis 4a: Collective emotional exhaustion is negatively associated with organizational
performance.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 12
Hypothesis 4b: Collective engagement is positively associated with organizational
performance.
Hypothesis 5a: HHRM has a positive indirect association with organizational performance
through employees’ positive stress mindset and collective emotional exhaustion.
Hypothesis 5b: HHRM has a positive indirect association with organizational performance
through employees’ positive stress mindset and collective engagement.
The Moderating Role of Transformational Leadership Climate
Leaders have been proposed to play an important role in shaping employees’ perceptions
of HR management (Nishii and Wright, 2008). We combine this rationale with signaling theory,
which posits that signal consistency (i.e., agreement of multiple signals sent from the same source)
is important for their intended impact to unfold. If various signals sent from one source (in our case
the organization) are conflicting, receivers will be confused and the signaling effect will be
weakened (Connelly et al., 2011). In a similar vein, social information processing theory suggests
that equivocal information obtained from the environment impairs the formation of individuals’
attitudes (Salancik and Pfeffer, 1978). Thus, we assume that the relationship between HHRM and
employees’ positive stress mindset depends on whether the signals sent by organizational
leadership are consistent with HR management’s focus on fostering employee well-being.
In this regard, transformational leadership climate proves to be particularly relevant,
defined as the extent to which leaders throughout an organization engage in transformational
leadership behaviors (Menges et al., 2011). It originates from individual leader behaviors, but
emerges as a shared organizational property. Thereby, processes like attraction-selection-attrition
and newcomer socialization contribute to similarity in leadership behaviors within organizations.
A high transformational leadership climate is marked by organizational leaders articulating
inspiring visions, motivating followers to achieve joint goals, intellectually stimulating them to

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 13
think “outside the box”, and providing them with individualized support (Podsakoff et al., 1996).
Transformational leaders are motivated by moral commitment toward the well-being of their
followers (Kelloway et al., 2012) and have been shown to promote their psychological health
(Montano et al., 2017). In the face of challenging demands, they inspire followers to achieve
common goals despite drawbacks and to develop innovative approaches for coping with difficult
tasks. In addition, they are sensitive to followers’ needs and feelings and show caring and
compassionate behaviors. Acting as coaches and mentors, they help followers to effectively cope
with work challenges and to use them as a source for personal growth and development.
In organizations with a high transformational leadership climate, leaders are perceived as
caring about employee well-being, enabling them to effectively manage work demands, and
supporting them to use challenges as a source for personal development. Thus, a high
transformational leadership climate aligns with the signals sent by HHRM with regard to a concern
for employee well-being (Connelly et al., 2011), thereby contributing to consistency in employee
perceptions of the organizational environment (Salancik and Pfeffer, 1978); this signal consistency
should be positively related to employees’ positive stress mindset. In contrast, in organizations
where transformational leadership climate is low, employees are likely to perceive the signals from
HHRM and leadership as ambiguous in terms of support for well-being and productively using
stress. As a result, they may speculate about the true intentions of HHRM, be reluctant to participate
in health-related HR trainings, or experience conflict between the healthy workplace practices
supported by HHRM and the daily interaction with their leaders. Hence, employees are less likely
to perceive HHRM as a supportive resource for making positive use of stress which attenuates the
positive association between HHRM and employees’ positive stress mindset.
To conclude, HHRM can be expected to more positively relate to employees’ positive stress
mindset under high as compared to low levels of transformational leadership climate. As

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 14
employees’ positive stress mindset is hypothesized to act as a mediator of the association between
HHRM and employees’ collective well-being, it can also be expected that the strength of these
indirect relationships depends on the level of transformational leadership climate.
Hypothesis 6a: Transformational leadership climate moderates the association between
HHRM and employees’ positive stress mindset such that the association is more
positive under high as compared to low levels of the moderator.
Hypothesis 6b: Transformational leadership climate moderates the association between
HHRM and employees’ positive stress mindset such that the indirect association
between HHRM, employees’ positive stress mindset, and collective emotional
exhaustion is more negative under high as compared to low levels of the moderator.
Hypothesis 6c: Transformational leadership climate moderates the association between
HHRM and employees’ positive stress mindset such that the indirect association
between HHRM, employees’ positive stress mindset, and collective engagement is
more positive under high as compared to low levels of the moderator.
METHOD
Data and Sample
Data for our study were collected in cooperation with a benchmarking agency in German
small- and medium-sized enterprises (SMEs) as part of a larger benchmarking analysis. SMEs are
often referred to as the “backbone” of the German economy, where they make up over 99% of all
companies, employing more than 60% of the working population (Soellner, 2014). To be eligible
for participation, companies had to be located in Germany, and company size had to be less than
5,000 employees. Overall, our analysis is based on data from 88 organizations belonging to the
service (45%), manufacturing (31%), trade (17%), and finance (7%) sector. They employed an
average of 336 employees (SD = 590), with a total of 15,952 respondents participating in our survey

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 15
(within-organization response rate of 67%). These employees averaged 40 years of age (SD =
6.69), were predominantly male (58%), and had an average company tenure of 8 years (SD = 2.99).
To prevent possible problems associated with common source bias, we collected data from
six different sources in each organization: the top HR representative, four unique groups of
employees, and the members of the top management team (TMT). The companies’ top HR
representatives were surveyed to obtain information on HHRM as well as several control variables.
They were predominantly male (56%), averaged 45 years of age (SD = 9.00), and had been with
their company for 11 years (SD = 9.96). In addition, all employees of the participating companies
received an invitation to take part in a web-based survey. Using a split-sample design, they were
randomly assigned to one of four different survey versions (hereinafter “employee survey version
1-4”) based on a random function programmed into the survey website.
1
The four survey versions
asked employees to provide information on different constructs of our theoretical model:
employees’ positive stress mindset (employee survey version 1), collective emotional exhaustion
and collective engagement (employee survey version 2), transformational leadership climate
(employee survey version 3), and coworker support as a control variable in our analysis (employee
survey version 4). Finally, TMT members in each company were surveyed to gauge information
on organizational performance. These TMT members were mostly male (91%), averaged 49 years
of age (SD = 7.30) and had an average tenure of 15 years (SD = 10.02).
Measures
Unless indicated otherwise, we used 5-point scales (1 = strongly disagree, 5 = strongly
agree) for the measures in our survey. To justify the aggregation of our variables to the
organizational level, we calculated both intraclass correlation coefficients (ICC1 and ICC2; Bliese,
2000) and the rwg(j)-index (James et al., 1984) and relied on common statistical benchmarks
discussed in the literature (Bliese, 2000; LeBreton and Senter, 2008).

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 16
Health-related human resource management. We collected information on this variable
from the organizations’ top HR representatives. Lepak et al. (2006, p. 247) propose that “key
informants must be knowledgeable persons about HR systems or activities.” Therefore, we
considered top HR representatives to be the most valid and reliable informants for reporting on
corporate health-related HR practices and principles, particularly in our sample of SMEs.
In line with our conceptualization of HHRM, we created an eight-item scale (see
Appendix). To test the construct validity of our newly developed scale, we proceeded in two steps.
First, we conducted a pilot study with a second, independent sample of 86 top HR representatives
from German SMEs. With this dataset, we conducted an exploratory factor analysis of our scale,
which yielded one factor with an eigenvalue of 4.93 accounting for 61.6% of the variance in the
data and no other factors with an eigenvalue above 1.0; the average loading of the items on this
factor was .78 (ranging from .66 to .86). The one-factor solution was also backed by the results of
a subsequent confirmatory factor analysis (CFA). We used two incremental fit indices—the
comparative fit index (CFI) and the incremental fit index (IFI)—in combination with the
standardized root mean square residual (SRMR) to assess model fit, as recommended for sample
sizes < 200 (Hu and Bentler, 1999). Results indicated a very good fit of the one-factor model with
the data (χ2/df = 1.47; CFI = .98, IFI = .98, SRMR = .04), with the CFI and IFI above the value of
.90 as well as the SRMR below the value of .08 as commonly discussed thresholds in the literature
(Hu and Bentler, 1999; Kline, 2010). In a second step, to further establish the measure, we
conducted a separate CFA in the study’s main dataset, which also yielded satisfactory results for
the one-factor solution (χ2/df = 1.37; CFI = .98, IFI = .98, SRMR = .03). To obtain a company score
of HHRM, the eight items were averaged (α = .91).
Employees’ positive stress mindset (α = .93; ICC1 = .05;
2
ICC2 = .69; rwg(j) = .86). To
capture the degree to which employees in the participating companies held a positive mindset

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 17
toward the nature and consequences of stress, employees in survey version 1 were asked to provide
their assessment of the eight-item stress mindset scale by Crum et al. (2013). A sample item is:
“Experiencing stress facilitates my learning and growth.” To obtain an indicator for employees’
positive stress mindset in organizations, items were averaged and aggregated to the organizational
level following a direct-consensus composition model (Chan, 1998).
Collective emotional exhaustion (α = .97; ICC1 = .10; ICC2 = .82; rwg(j) = .81). The degree
to which respondents collectively perceived the employees in their organization to be emotionally
exhausted was gauged in employee survey version 2 using the five-item scale by Gonzalez-Morales
et al. (2012). A sample item is: “The employees working in this company feel used up at the end of
the workday.” Items were averaged and aggregated to the organizational level.
Collective engagement (α = .92; ICC1 = .08; ICC2 = .78; rwg(j) = .95). Respondents’ shared
perceptions of the extent to which the employees in their organization showed high levels of
engagement was measured in employee survey version 2 using the six-item scale by Barrick et al.
(2015). A sample item is: “The employees in this company tend to be highly focused when doing
their jobs.” Again, items were averaged and aggregated to the organizational level of analysis.
Transformational leadership climate (α = .93; ICC1 = .12; ICC2 = .80; rwg(j) = .87). To
measure this variable, we relied on the scale by Podsakoff et al. (1996), with employee survey
version 3 including a total of 16 items on leaders’ articulating a vision (sample item: “My
supervisor inspires others with his/her plans for the future”), fostering acceptance of collective
goals (“My supervisor gets employees to work together for the same goal”), intellectual stimulation
(“My supervisor has provided me with new ways of looking at things which used to be a puzzle for
me”), and individualized support (“My supervisor behaves in a manner that is thoughtful of my
personal needs”). Following prior research (Menges et al., 2011), we asked respondents to assess
the extent to which their direct leaders exhibited transformational leader behaviors and applied a

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 18
direct-consensus composition model for aggregation (Chan, 1998).
Organizational performance (α = .76; ICC1 = .23; ICC2 = .44; rwg(j) = .92). As objective
performance data was not available for the mostly privately owned SMEs in our sample, TMT
members were asked to report on their company’s performance.
3
Following prior research, we
conceptualized company performance as comprising both organizational and operational aspects
(Combs et al., 2005) and measured both dimensions with two items each (for a similar approach,
see, e.g., Boehm et al., 2014). Thus, we measured organizational performance with two items
relating to the company’s current financial situation and company growth, while operational
performance was gauged with two items pertaining to employee productivity as well as employee
retention and turnover. In line with prior studies using subjective performance measures (e.g., Wall
et al., 2004), TMT members were asked to rate their company’s performance compared to their
direct industry competitors (1 = far below average, 7 = far above average).
Control variables. We controlled for seven additional factors: First, we included company
size, as it has been shown to relate to various employee attitudes and behaviors (Pierce and Gardner,
2004); as this measure was skewed, we log-transformed it. Second, we controlled for industry
affiliation. In particular service sector companies have shown to exhibit significant differences in
HR practices, culture, and performance compared to companies from other industries (Datta et al.,
2005). Hence, we included three dummy variables (i.e., service, manufacturing, and trade), using
finance as the reference category. Third, we accounted for possible staffing shortage, as this may
relate to both well-being and performance (Ganster and Dwyer, 1995). We measured this variable
by asking the top HR representatives whether their company is currently not able to carry out new
projects due to understaffing (1 = totally disagree, 7 = totally agree). Fourth, we controlled for
dynamism of the organizational environment, as a highly dynamic context may be associated with
both well-being and performance. Top HR representatives answered the five-item scale by Jansen

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 19
et al. (2006; sample item: “Environmental changes in our local market are intense;” 1 = totally
disagree, 7 = totally agree; α = .86).
Fifth, we included employees’ mean age as age has been shown to relate to well-being and
performance (Ng and Feldman, 2008). Sixth, we controlled for employees’ average company
tenure, because, like age, tenure has been shown to be associated with employee behavior and
performance. Seventh, we included the average degree of coworker support as coworkers are
considered to be a major source of social support, in addition to leadership and HR management.
Employees in survey version 4 answered the four-item social support scale by Jetten et al. (2012)
with a coworker-referent (sample item: “To what extent do you get the help you need from your
colleagues at work?”; 1 = not at all, 5 = to a great extent). Items were averaged and aggregated to
the organizational level (α = .93; ICC1 = .04; ICC2 = .59; rwg(j) = .86).
4
Analytical Techniques
We tested our theoretical predictions using multiple regression analysis. To examine the
mediation hypotheses, we assessed the statistical significance of the indirect effects and their
associated confidence intervals with the help of a bootstrapping-based product-of-coefficients
procedure (Preacher and Hayes, 2004). To test for moderated mediation, we relied on Preacher et
al.’s (2007) approach for analyzing conditional indirect effects, in which the point estimate of the
indirect effect of an independent on a dependent variable via a mediator is tested for different values
of the moderator (i.e., -1 SD, mean, and +1 SD) using a bootstrapping procedure.
RESULTS
Table I provides an overview of means, standard deviations, and intercorrelations. As
expected, HHRM is significantly correlated with employees’ positive stress mindset (r = .22, p ≤
.01). In addition, employees’ positive stress mindset is negatively associated with collective
emotional exhaustion (r = -.37, p ≤ .001) and positively associated with collective engagement (r

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 20
= .43, p ≤ .001), which in turn show significant correlations with organizational performance
(collective emotional exhaustion: r = -.32, p ≤ .01; collective engagement: r = .34, p ≤ .001).
5
------ INSERT TABLE I ABOUT HERE ------
To examine whether HHRM is positively associated with employees’ positive stress
mindset, we conducted multiple regression analysis with stress mindset as the dependent variable.
As can be seen from Table II, HHRM shows a positive relationship (ß = .31, p ≤ .01), supporting
Hypothesis 1. Moreover, it was predicted that employees’ positive stress mindset is negatively
associated with collective emotional exhaustion (Hypothesis 2a) and positively associated with
collective engagement (Hypothesis 2b). Hence, we conducted additional regression analyses with
collective emotional exhaustion and collective engagement as the dependent variables and stress
mindset as the main predictor. As Table II shows, employees’ positive stress mindset is negatively
related to collective emotional exhaustion (ß = -.32, p ≤ .01) and positively related to collective
engagement (ß = .37, p ≤ .001), thus supporting Hypotheses 2a and 2b.
------ INSERT TABLE II ABOUT HERE ------
To test whether employees’ positive stress mindset constitutes a mediator through which
HHRM is associated with collective emotional exhaustion and collective engagement (Hypotheses
3a and 3b), we conducted a bootstrapping-based product-of-coefficients procedure using
PROCESS for SPSS (Hayes, 2012) with 1,000 bootstrap samples. The bias-corrected bootstrap
95% confidence interval for both indirect relationships does not include zero, thus supporting
Hypothesis 3a (dependent variable collective emotional exhaustion: unstandardized point estimate
B = -.04, bootstrap standard error [BootSE] = .02, bias-corrected 95% bootstrap confidence interval
[Boot95%CI] = [-.08, -.01]) and Hypothesis 3b (dependent variable collective engagement: B =
.03, BootSE = .01, Boot95%CI = [.01, .06]).
Hypotheses 4a and 4b focus on the relationship between collective well-being and

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 21
organizational performance. As can be seen in Table II, collective engagement is positively
associated with performance (ß = .35, p ≤ .05), supporting Hypothesis 4b. In contrast, collective
emotional exhaustion does not show a significant relationship (ß = -.21, n.s.); thus, Hypothesis 4a
is not supported. In a further step, we examined the indirect link between HHRM and organizational
performance. As collective emotional exhaustion is not significantly related to performance, we
only tested whether the indirect relationship between HHRM and company performance is serially
mediated by employees’ positive stress mindset and collective engagement (Hypothesis 5b). The
bias-corrected 95% bootstrap confidence interval for this indirect relationship does not include zero
(B = .03, BootSE = .02, Boot95%CI = [.01, .08]), thus supporting Hypothesis 5b.
Hypothesis 6a assumes that transformational leadership climate moderates the link between
HHRM and employees’ positive stress mindset such that the relationship is more positive under
high (vs. low) levels of the moderator. To test this assumption, we analyzed in a first step the
interaction of HHRM and transformational leadership climate on employees’ positive stress
mindset, which is significant (ß = .24, p ≤ .05) and explains a significant amount of additional
variance in employees’ positive stress mindset (∆R2 = .04, p ≤ .05; see Table III).
------ INSERT TABLE III ABOUT HERE ------
In a second step, we calculated simple slopes at one standard deviation both above and
below the mean of the moderator. Results show that the positive relationship between HHRM and
employees’ positive stress mindset becomes stronger under high levels of transformational
leadership climate (ß = .45, p ≤ .01) but is entirely dissolved under low levels of the moderator (ß
= .01, n.s.). Thus Hypothesis 6a, which predicted that the strength of the relationship between
HHRM and employees’ positive stress mindset is dependent on transformational leadership
climate, is supported. Moreover, our analysis illustrates that the relationship between HHRM and
employees’ positive stress mindset even becomes non-significant under the condition of low

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 22
transformational leadership climate. Figure 3 illustrates the interaction effect.
------ INSERT FIGURE 3 ABOUT HERE ------
Finally, we examined whether transformational leadership climate also moderates the
indirect relationships between HHRM and collective emotional exhaustion as well as collective
engagement mediated by employees’ positive stress mindset (Hypotheses 6b and 6c), following
the procedure by Preacher et al. (2007). Results show that the negative indirect association between
HHRM and collective emotional exhaustion only exists under a high transformational leadership
climate (B = -.06, BootSE = .02, Boot95%CI = [-.11, -.01]), becoming weaker and non-significant
at mean (B = -.03, BootSE = .02, Boot95%CI = [-.07, .00]) and low levels of the moderator (B = -
.01, BootSE = .02, Boot95%CI = [-.06, .04]). In a similar vein, the positive indirect relationship
between HHRM and collective engagement only exists under a high transformational leadership
climate (B = .05, BootSE = .02, Boot95%CI = [.01, .09]), becoming weaker and non-significant at
mean (B = .02, BootSE = .01, Boot95%CI = [-.00, .06]) and low levels of the moderator (B = .01,
BootSE = .02, Boot95%CI = [-.03, .04]). Thus, Hypotheses 6b and 6c are supported. Moreover,
the indirect relationships between HHRM and collective emotional exhaustion as well as collective
engagement even become non-significant when transformational leadership climate is low.
Robustness Check
Due to the cross-sectional nature of our analysis, there is a potential risk of reverse causality
between HHRM and organizational performance. To at least partially address this issue, we
gathered additional data on both prior and subsequent organizational performance for as many
companies in our sample as possible.
6
Based on a sub-sample of N = 26 companies, we found no
significant relationship between subjective ratings of prior organizational performance and the
level of HHRM implemented in these companies (r = .04, p = .86), thus speaking against the
assumption that HHRM was influenced by prior firm performance. In addition, based on a sub-

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 23
sample of N = 22 companies, we found strong correlations of employees’ collective engagement
(r = .49, p ≤ .05) and collective emotional exhaustion (r = -.36, p ≤ .10) with subjective ratings of
subsequent organizational performance, hence further substantiating the association between
collective well-being and organizational performance as the last step of our mediation model.
Together, the findings from the robustness check suggest that reverse causality between HHRM
and organizational performance does not seem to be a major issue in our study.
DISCUSSION
The aim of this paper was to examine the relationship between health-related human
resource management (HHRM), employees’ collective well-being and company performance.
Results from a study in 88 organizations show that HHRM is indirectly related to well-being in
terms of lower levels of collective emotional exhaustion and higher levels of collective
engagement. This indirect association is mediated by employees’ positive stress mindset and
moderated by transformational leadership climate, such that the indirect relationship between
HHRM and collective well-being only exists under high (vs. low) levels of the moderator.
Moreover, HHRM shows a positive indirect association with organizational performance that is
mediated by employees’ positive stress mindset and collective engagement.
Theoretical Implications
Extant research on the relationship between HR management, employee well-being and
organizational performance has been both theoretically and empirically inconclusive (van de
Voorde et al., 2012). Our study contributes to this stream of research in three major ways: First, it
helps to illuminate prior inconsistent findings by examining how HR management is related to
employee well-being. Similar to previous results that revealed the relationship to be complex,
HHRM does not show a direct, but an indirect relationship with well-being that only becomes
apparent when taking employees’ positive stress mindset as a mediator into consideration. Thereby,

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 24
our analysis extends the growing body of research on stress mindset, suggesting that such a mindset
is associated with the implementation of a health-related HR system in organizations. As prior
research has also shown other domain-specific mindsets to impact individuals’ affect, motivation,
and behavior (e.g., Rattan and Dweck, 2018), mindsets in general might constitute a new and
promising approach for understanding the role of HR management.
Second, results on the moderating role of transformational leadership climate support the
proposition that leadership acts as a critical contingency of the relationship between HR
management and employee well-being (van de Voorde and Boxall, 2014). While the role of line
management for HR management has been repeatedly discussed (e.g., Jiang et al., 2013), most of
the few existing studies are rooted in the substitutes-for-leadership model (Kerr, 1977), proposing
HR and leadership to act as substitutes for each other (e.g., Chuang et al., 2016). Our analysis
provides a different perspective by showing that HR and leadership constitute synergistic partners
when it comes to the relationship with employee well-being. Thus, our findings might be seen as
evidence for the assumption that signal consistency is important for the effectiveness of HR
management (Bowen and Ostroff, 2004). Moreover, our results imply that signal inconsistency
might not only attenuate but even entirely dissolve signal effectiveness.
Third, our study contributes to the theoretical debate on the relationship between HR
management, employee well-being and organizational performance (Peccei et al., 2013). In this
regard, the “mutual gains” view argues that HR management benefits both well-being and
performance (e.g., Appelbaum et al., 2000). In contrast, the “conflicting outcomes” perspective
considers well-being and performance to be parallel organizational objectives that are influenced
by different sets of HR practices (e.g., Godard, 2004). Our study adds to advancing this conceptual
debate by providing empirical support for a theoretical model that is reflective of the “mutual gains”
perspective, showing that collective engagement acts as a mediator of the association between

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 25
HHRM and organizational-level performance. At the same time, collective emotional exhaustion
is not shown to be a mediator of the relationship. Thus, our findings indicate that the relationship
between HHRM and performance may be mediated in particular by employees’ positive affective-
motivational well-being, a proposition that can also be found in individual-level models of well-
being, such as the job demands-resources model (Schaufeli and Bakker, 2004).
By supporting the “mutual gains” perspective on HR, well-being and performance, our
study also adds to the broader strategic HR literature. Since the rise of the strategic HR concept in
the 1980s, many works have followed a unitarist perspective, arguing that “what is good for the
organization is also good for the employees” (van Buren et al., 2011). Yet, this functionalist,
managerial view of HR management has been largely criticized for neglecting employee concerns
and well-being (e.g., Guest, 2017). The decreasing employee focus has led to calls for more
“balanced approaches” (e.g., Paauwe, 2009) that pay equal attention to both the managerial
perspective on strategic HR and the well-being of employees. Such calls are complemented by
claims that the employee-organization relationship should play a more prominent role in strategic
HR analyses (e.g., Lepak and Boswell, 2012) and that a stronger emphasis on multi-stakeholder
conceptualizations of HR management and performance is necessary (e.g., Beer et al., 2015).
Our study echoes the calls for a more balanced perspective and for putting employee well-
being center-stage in the relationship between HR management and performance. As such, our
findings stand in contrast to the (either implicit or explicit) notion that there exists a tension or
trade-off between employee concerns and organizational effectiveness (Lepak and Boswell, 2012).
That is, our study indicates that employee well-being and strategic value creation may not
necessarily constitute competing HR objectives. Rather, our findings might be seen as tentative
evidence for the view that “what is good for the employees is also good for the organization.”
With regard to implications for strategic decision-making, employee well-being might be

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 26
incorporated as a key objective into an organization’s strategy in order to ensure the strategic fit of
HHRM (Lepak et al., 2006). Moreover, implementing HHRM may help organizations to transform
the HR function into what Paauwe (2004) calls an “enabler” for strategic options. In times of
rapidly changing markets and increasing competitive pressure, HR can facilitate the development
of a workforce that is able to flexibly adapt to the changing strategic demands of organizations. For
this purpose, companies need to take care of employee needs and well-being in order to increase
their learning, flexibility, and change readiness. HHRM may constitute a viable approach for
turning HR into such a strategic enabler.
To conclude, the health-related HR system developed in our study may result in a situation
that helps organizations meet their strategic objectives while at the same time putting employee
well-being at the heart of the HR-performance relationship. In this regard, HHRM may provide a
potential answer to the plea made by Guest (2002, p. 340) that, “if a set of HR practices was found
to be associated with both high performance and well-being, then we would be closer to making
progress in the search for the elusive happy and productive worker.”
Practical Implications
Our findings can support companies in taking effective action for creating a psychologically
healthy workplace. First, our analysis points to the importance of establishing a comprehensive
system of health-related HR practices. Following from the conceptualization in our study, HHRM
should incorporate HR practices that focus on both prevention of and recovery from psychological
illnesses, that are targeted at both employees and leaders, that receive support from the
organization’s top management, and that are constantly evaluated. Moreover, HHRM will be most
effective when it simultaneously strengthens employees’ ability, motivation, and opportunity to
contribute to creating a psychologically healthy workplace. Although certainly not exhaustive, this
list may constitute a good starting point for organizations that strive to introduce effective HHRM.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 27
Depending on additional strategic priorities of the company, HHRM may be complemented by
other HR systems (e.g., targeted at occupational safety, employee commitment, or involvement).
In doing so, ensuring alignment and avoiding conflict with HHRM is essential.
Second, organizations should be aware of the critical role that leaders play in the context of
HHRM. In this regard, transformational leadership climate proves to be particularly relevant as it
contributes to employees’ perception that not only HR but also organizational leaders care about
their well-being. This perceived consistency between signals sent from different organizational
actors is important for the positive relationship between HHRM, employees’ positive stress
mindset and well-being to occur. Hence, organizations should promote high levels of
transformational leadership climate, for example by adequately selecting and training their
leadership personnel. In this regard, existing research demonstrates the effectiveness of training for
transformational leadership (e.g., Antonakis et al., 2011) and offers advice for the design of
leadership development programs.
Limitations and Future Directions
Like any other study, our research is not without limitations. First, our analysis is cross-
sectional, thus precluding the possibility of drawing causal inferences. While we are confident that
our model is based on sound theoretical reasoning and the robustness check based on additional
performance data generally supports the assumed flow of causality between HHRM and
organizational performance, the potential risk of reverse causality cannot entirely be ruled out. As
both the influence of a positive stress mindset on well-being and the impact of well-being on
performance have been proved by extant longitudinal or experimental research (e.g., Crum et al.,
2013; Petrou et al., 2015), future studies should aim in particular at further validating the
relationship between HHRM and employees’ positive stress mindset. In this regard, prior
investigations have provided initial evidence for the malleability of individuals’ stress-related

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 28
mindset (Crum et al., 2013, 2017); yet, based on our cross-sectional analysis, it cannot be precluded
that a positive stress mindset might also affect employees’ perceptions of HHRM and
organizational leadership to some extent. Therefore, we strongly encourage further research to
replicate our findings using longitudinal research designs.
Second, the generalizability of our findings may be limited due to particularities of our
sample (i.e., SMEs located in Germany). Hence, future research should on the one hand examine
the effects of HHRM in larger companies where it may, for example, be harder to implement
health-related HR measures in a way that all employees are equally reached. On the other hand, it
seems to be worthwhile to study the effects of HHRM in other national and/or cultural contexts, as
cultural and legislative differences between countries and regions may influence the design and
consequences of health-related HR systems.
Third, our analysis is exclusively based on top HR representatives’ assessments of HHRM
and future research may profit from also incorporating employees’ subjective view on HHRM
(Nishii and Wright, 2008). In a similar vein, it appears to be promising to investigate the “strength”
of HHRM in terms of its effectiveness in communicating unambiguous, consistent messages to
employees about what is appropriate behavior (Bowen and Ostroff, 2004). Hence, future research
may investigate how the distinctiveness, consistency, and consensus of HHRM determine its
impact on well-being and performance.
A fourth limitation relates to the measurement of organizational performance. Our sample
consists mostly of privately owned SMEs for which objective performance data is not publicly
available. Thus, we had to rely on TMT members’ subjective performance ratings which can be
associated with potential weaknesses, such as response bias. However, the use of board members
as key informants proved to be adequate in prior research (Combs et al., 2005), which also found
strong correlations with objective performance indicators (Wall et al., 2004). Nonetheless, future

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 29
research would benefit from replicating our findings using objective performance data.
Notwithstanding these limitations, our study offers additional implications for further
research. Regarding the stress mindset concept, future studies may investigate the emergence of
collective, “organizational mindsets”. Given the limited amount of variance in employees’ stress
mindset that can be attributed to organizational membership in our study, future studies could focus
on organizational-level stress-related mindsets that are even more strongly shared among
employees (for first evidence on such “organizational mindsets”, see Dweck et al., 2015). With
regard to future individual-level research, it is conceivable that a positive stress mindset might also
have detrimental effects. While stress mindset and appraisal have been shown to be largely
independent from one another (Crum et al., 2013), a positive stress mindset might nevertheless lead
employees to uncritically accept intensifying job demands, thus entailing the risk that they might
overextend themselves. Future studies may explore under what conditions such a systematic
influence of stress mindset on stress appraisal could emerge.
Moreover, further research may profit from scrutinizing the relationships in our conceptual
model, in particular the link between HHRM and employees’ positive stress mindset, from the
viewpoint of additional theoretical perspectives. In this regard, for example social cognitive theory
(Bandura, 1997), organizational support theory (Rhoades and Eisenberger, 2002), or a human
capital perspective (Barney, 1991) may offer the opportunity for an in-depth analysis of underlying
mechanisms in terms of employees’ efficacy beliefs, competences, or social exchange processes
that could account for the relationship between HHRM and employees’ stress mindset.
Finally, we strongly encourage additional empirical analyses to further address the
theoretical debate concerning the relationship between HR management, employee well-being and
organizational performance (Peccei et al., 2013). While our study aimed at advancing this debate
by providing empirical evidence for a model that is reflective of the “mutual gains” perspective,

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 30
future analyses may incorporate an additional “conflicting outcomes” explanation for the effects
of HHRM. For example, it may be worthwhile to consider whether HHRM might prompt
employees to put an overly strong emphasis on preventing potential health risks that could attenuate
its positive indirect association with collective engagement and organizational performance.
Moreover, future research would benefit in particular from analyzing whether, how, and when more
performance-oriented HR approaches (such as high performance work systems) may lead to
“mutual gains” or “conflicting outcomes” in terms of employee well-being and company
performance. Apart from their intended performance-enhancing effects, such HR systems may for
example cause employees’ perceptions of work intensification and performance pressure that could
result in lower levels of psychological well-being.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 31
NOTES
1
To verify that random assignment worked as expected, we tested for possible differences between
survey versions with regard to employees’ age, gender, and tenure. To this end, we conducted
regression analyses with employee attributes as dependent variables and survey versions as
dummies. We used a logit model for gender differences and obtained a nonsignificant overall
model fit (χ2 = 1.10, p = 0.78). For age and tenure differences, we specified OLS models and also
found nonsignificant overall model fits (age: F = 0.99, p = 0.50; tenure: F = 0.57, p = 0.63). These
results indicate that random assignment to the survey versions worked as intended.
2
Although an ICC(1) of .05 is at the lower end of acceptable values, it can still be considered as a
“typical” value (Bliese, 2000, p. 361) that “represents a small to medium effect, suggesting that
group membership influenced judges’ ratings” (LeBreton and Senter, 2008, p. 838).
3
We suggest that for our analysis, the use of subjective performance ratings is an adequate
alternative to objective performance data: First, subjective TMT performance ratings have proved
to strongly correlate with objective performance indicators (Wall et al., 2004). Second, the TMT
members can be considered as key informants due to their senior management positions and their
high average tenure of 15 years. Third, subjective performance assessments allow for the use of
SMEs as an important research setting for which objective performance data is often not publicly
available. Fourth, TMT members’ ratings provide comparable performance assessments across
companies in our multi-industry sample.
4
We performed a series of CFAs to check for convergent and discriminant validity of our core
variables. Due to the limited sample size (N = 88), we had to economize the parameters to be tested
in order to increase the cases-to-parameter ratio; therefore, we followed prior research and applied
a parceling approach for the sub-dimensions of transformational leadership climate. Moreover, we
treated organizational performance as a formative construct and excluded it from our full CFA

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 32
model (Podsakoff et al., 2006); yet, the model showed a similar fit when performance was included
as an additional reflective measure. Our hypothesized measurement model with five latent factors
(i.e., HHRM, employees’ positive stress mindset, collective engagement, collective emotional
exhaustion, and transformational leadership climate) shows an adequate fit with the data (χ2/df =
1.59; CFI = .92, IFI = .92, SRMR = .07, AIC = 825.73). All factor loadings are > .50 and the mean
average variance extracted (AVE) is .71 (from .53 for HHRM to .87 for collective exhaustion).
This model was compared to four alternative models: One with HHRM and transformational
leadership climate loading on one factor (χ2/df = 2.20; CFI = .83, IFI = .83, SRMR = .13, AIC =
1072.51), one with HHRM, transformational leadership climate, and stress mindset as one factor
(χ2/df = 3.04; CFI = .71, IFI = .71, SRMR = .17, AIC = 1419.61), one with all mediators as one
factor (χ2/df = 2.92; CFI = .73, IFI = .72, SRMR = .17, AIC = 1371.83), and one with all variables
loading on a single factor (χ2/df = 4.17; CFI = .54, IFI = .55, SRMR = .19, AIC = 1895.51). All
alternative models fit the data worse than the five factor model.
5
As some predictors show substantial intercorrelations, we checked for possible biases due to
multicollinearity. Yet, variance inflation factors (VIFs) fell far below the critical value of 10
(Kennedy, 2008) for all our regression models (mean VIF values ranging between 2.17 and 2.35).
6
The additional performance data was obtained from the benchmarking agency with which we had
conducted the data collection for our study. Data on prior firm performance was collected between
12 and 30 months before our study; similar to our analysis, assessments were provided by TMT
members with a four-item scale comprising two items each on both financial and operational
performance. Data on subsequent organizational performance was collected between 12 and 24
months after our study. Again, subjective assessments were captured with a four-item scale
comprising two items each on both financial and operational performance. These ratings were
provided either by TMT members or companies’ top HR representatives.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 33
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HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 42
Table I
Descriptives and Intercorrelations
MSD 1 2 3 4 5 6 7 8 9 10 11 12 13 14
1
Health-related human resource management (HHRM) 3.22 .87
2
Employees' positive stress mindset 2.44 .24 .22 **
3
Collective emotional exhaustion 2.47 .39 -.20 -.37 ***
4
Collective engagement 3.73 .24 .18 .43 *** -.50 ***
5
Tranformational leadership climate 3.50 .31 .32 ** .31 ** -.50 *** .64 ***
6
Organizational performance 5.56 .68 .15 .22 * -.32 ** .34
***
.28 **
7
Company size (log) 5.17 1.09 .13 -.24 * .27 * -.14 -.15 -.05
8
Industry (service) 0.45 .50 .09 .17 .03 .11 .11 -.15 -.11
9
Industry (production) 0.31 .46 -.20 -.16 -.08 -.08 -.25 * -.05 -.12 -.61 ***
10
Industry (trade) 0.17 .38 .09 -.07 .04 -.04 .17 .16 .20 -.41
***
-.30 **
11
Staffing shortage 2.87 1.58 -.15 -.11 .12 .05 -.03 -.10 .05 .06 .15 -.16
12
Environmental dynamism 4.93 1.35 .16 -.08 .12 -.03 .02 .02 -.01 -.16 .12 .16 .16
13
Mean age 39.81 6.69 -.04 -.11 .10 -.11 -.14 -.06 .05 -.08 .11 -.05 .04 -.09
14
Mean company tenure 7.71 2.99 .09 -.28 ** .18 -.22 * -.22 * -.05 .31 ** -.30 ** .12 .00 -.16 -.25 * .39 **
15
Coworker support 3.97 .24 .23 * .08 -.32 ** .63
***
.48
***
.16 .07 .03 -.18 .16 .06 .01 -.12 -.10
Variable
Note. N = 88; * p ≤ .05, ** p ≤ .01, *** p ≤ .001.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 43
Table II
Results of Multiple Regression Analysis
Dependent variables
Model 1
Model 2a
Model 2b
Model 3a
Model 3b
Model 4
Employees’
positive stress
mindset
Collective
emotional
exhaustion
Collective
engagement
Collective
emotional
exhaustion
Collective
engagement
Organizational
performance
Control variables
Company size
-.18
.18
-.07
.19
-.06
.01
Industry (service)
-.33
-.03
.07
.01
.07
-.47
Industry (production)
-.33
-.24
.12
-.23
.12
-.37
Industry (trade)
-.26
-.03
-.04
-.01
-.04
-.10
Staffing shortage
-.06
.13
.03
.11
.02
-.01
Environmental dynamism
-.18
.14
-.02
.18
-.01
.02
Mean age
.05
.03
.00
.02
.00
.01
Mean company tenure
-.35*
.11
-.03
.14
-.03
-.06
Coworker support
-.05
-.39***
.63***
-.36***
.64***
-.19
Independent variables
Health-related human resource
management (HHRM)
.31**
(B = .08)
-.13
-.02
.07
Employees’ positive
stress mindset
-.32**
(B = -.53)
.37***
(B = .38)
-.28**
(B = -.47)
.38***
(B = .39)
-.02
Collective emotional
exhaustion
-.21
Collective engagement
.35*
(B = .99)
R2
.23
.38
.56
.40
.56
.27
F
2.29*
4.73***
9.64***
4.48***
8.66***
2.09*
Note. N = 88; standardized regression coefficients are reported (unstandardized coefficients in parentheses); * p ≤ .05, ** p ≤ .01, *** p ≤ .001.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 44
Table III
Results of Moderated Regression Analysis
Employees’ positive
stress mindset
Step 1
Step 2
Control variables
Company size
-.14
-.12
Industry (service)
-.30
-.25
Industry (production)
-.30
-.32
Industry (trade)
-.26
-.24
Staffing shortage
-.06
.01
Environmental dynamism
-.16
-.16
Mean age
.05
.03
Mean company tenure
-.32*
-.29*
Coworker support
-.12
-.16
Independent variables
Health-related human resource
management (HHRM)
.26*
.23*
Transformational leadership
climate (TFL climate)
.19
.25*
Interaction
HHRM X TFL climate
.24*
R2
.26
.30
ΔR2
.04*
F
2.33*
2.66**
Note. N = 88; standardized regression coefficients are reported; * p ≤ .05,
** p ≤ .01, *** p ≤ .001.

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 45
Figure 1
Overview of Mediation Model
Figure 2
Overview of Moderated Mediation Model
Figure 3
Moderation Effect of Transformational Leadership (TFL) Climate on the Association
Between Health-Related Human Resource Management (HHRM) and
Employees’ Positive Stress Mindset

HEALTH-RELATED HRM, WELL-BEING AND PERFORMANCE 46
APPENDIX
Health-Related Human Resource Management (HHRM)
To which extent does your company implement the following psychological health-related HR
practices and principles: (1 = not at all, 5 = to a great extent)
(1) HR practices for preventing psychological health problems at work (e.g., stress
management trainings)
(2) HR practices for coping with already existing psychological health problems (e.g.,
support for employees who suffer from burnout)
(3) Psychological health-related HR practices specifically designed for leaders (e.g.,
trainings for psychological health-oriented leadership)
(4) Opportunities for flexibly adjusting employees’ job designs to the state of their
psychological health (e.g., working hours or work organization)
(5) Involvement of employees into the design and implementation of psychological health-
related HR practices (e.g., HR planning workshops together with employees)
(6) Incentives for employees to participate in psychological health-related HR practices
(e.g., rewards for frequent attendance of health-related trainings)
(7) Permanent and systematic evaluation of psychological health-related HR practices
(8) Top management support for and emphasis on the importance of a psychologically
healthy workplace.