Effect of human resource management practices on innovation: download PDF

Human resource management practices positively impact organizational innovation by enhancing product, process, and administrative innovation. Research studies also indicate that human resource management practices, when properly implemented, result in improved innovative work performance in many organizations. 

The following are empirical studies done across the globe on the effect of human resource management practices on organizational innovation.

Enhancing employee innovation capabilities through high-involvement HRM: mediating role of knowledge sharing and transformational leadership

The study focused on the influence of high-involvement HRM on employee innovation capabilities in the telecommunications industry in Bangladesh. The specific objectives of the study included the following: to determine the effect of high-involvement human resource management on employee innovation capabilities in the target firms; to establish the relationship between high-involvement human resource management and knowledge sharing in the target firms; to find out the relationship between knowledge sharing and employee innovation capabilities in the target firms; to assess the mediation role of knowledge sharing on the relationship between high-involvement human resource management and employee innovation capabilities; to evaluate the nature of the association between high-involvement human resource management and transformational leadership; to establish the nature of the association between transformational leadership and employee innovation capabilities; and finally, to examine the mediating role of transformational leadership on the relationship between high-involvement human resource management and employee innovation capabilities (Guha et al., 2025).

The target population included individuals working in the telecommunications industry operating in Dhaka, Bangladesh. A sample size of 275 respondents was selected to participate in the study. Data collection was done using a questionnaire. The collected data was analyzed using descriptive statistics such as frequency and percentage. The Structural Equation Modelling (SEM) approach was used to assess the relationship between predictor variables and the outcome variable. The results were presented in tables as required (Guha et al., 2025).

The results of the SEM indicated that high involvement in human resource management had a positive and significant impact on employee innovation capabilities; high-involvement human resource management had a positive and significant impact on knowledge sharing; knowledge sharing had a positive and significant impact on employee innovation capabilities; knowledge sharing significantly mediated the relationship between high-involvement human resource management and employee innovation capabilities; high-involvement human resource management had a positive and significant impact on transformational leadership; transformational leadership had a positive and significant impact on employee innovation capabilities; transformational leadership significantly mediated the relationship between high-involvement human resource management and employee innovation capabilities (Guha et al., 2025).

Effects of HR management practices on employee innovative work behavior with two mediation

The study examined the effects of HR management practices on employee innovative work behavior at Khairun University, Indonesia. The specific objectives of the study included the following: to establish the effect of HR management practices on organizational citizen behavior in Khairun University; to determine the effect of HR management practices on employee satisfaction in Khairun University; to assess the effect of HR management practices on innovative work behavior in Khairun University; to find out the effect of organizational citizen behavior on innovative work behavior in Khairun University; to evaluate the effect of employee satisfaction on innovative work behavior; and to examine the effect of HR management practices on innovative work behavior in Khairun University (Marwan & Alhadar, 2024).

The target population included employees of Khairun University, Indonesia. A sample size of 150 respondents was selected to participate in the study. Descriptive variables of the study were analyzed using descriptive statistics such as frequency, percentage, mean, and standard deviation. A Partial Least Square (PLS) model was used to assess the effect of the independent variables on the dependent variable. The results were presented in tables as deemed suitable (Marwan & Alhadar, 2024).

The results of the PLS model revealed the following: Human resource management practices had a positive effect on the organizational citizen behavior of Khairun University employees; human resource management practices had a positive and significant effect on employee satisfaction in the target university; human resource management practices had a significant but negative effect on the innovative work behavior of employees at Khairun University; employee organizational citizen behavior had a positive effect on employee innovative work behavior in the target university; employee satisfaction had a positive and significant effect on the innovative work behavior of employees in the target university; organizational citizen behavior mediated the relationship between human resource management practices and the innovative work behavior of employees at Khairun University; and last but not least, employee satisfaction positively influenced the relationship between human resource management practices and the innovative work behavior of employees at Khairun University (Marwan & Alhadar, 2024).

Human resource management practices and firm innovation: an empirical study in Sri Lankan SMEs

The study explored the effect of human resource management practices on firm innovation in SMEs in Sri Lanka. The specific objectives of the study included the following: to find out the effect of recruitment & selection on product, process, and administrative innovation; to establish the effect of training & development on product, process, and administrative innovation; to assess the effect of performance appraisal on product, process, and administrative innovation; and to examine the effect of compensation & reward systems on product, process, and administrative innovation (Mathushan & Shantha, 2024).

The target population included 3023 SMEs operating in the northern province of Sri Lanka. A sample size of 341 respondents was selected to participate in the study. Data collection was done using a questionnaire. The collected data was analyzed using descriptive variables such as frequency and percentage. The PLS-SEM method was used to assess the effect of the independent variables on the dependent variable. The results were presented in tables as needed (Mathushan & Shantha, 2024).

The results indicated that recruitment & selection practices had a positive impact on product, process, and administrative innovation. It was also established that training & development practices had a positive impact on product, process, and administrative innovation. The findings also showed that performance appraisal had a positive impact on product, process, and administrative innovation. Also, the results indicated that compensation & reward systems had a positive impact on product and process innovation but a negative impact on administrative innovation (Mathushan & Shantha, 2024).

The influence of human resource management practices, organizational innovation, and learning organization culture on innovation work performance

The study explored the influence of new human resource management (NHRM) practices and organizational innovation on innovation work performance in Indonesia. The specific objectives of the study included the following: to determine the effect of NHRM on innovation work performance, to establish the effect of innovation organization on innovation work performance, and to find out the effect of learner organization on innovation work performance (Wijaya et al., 2023).

A sample size of 279 employees was selected to participate in the study. Data collection was done using a questionnaire. Descriptive statistics like frequency, percentage, mean, and standard deviation. Regression analysis was employed to establish the effect of the independent variables on the dependent variable. The results were presented in tables as deemed fit (Wijaya et al., 2023).

The results of regression standardized coefficients indicated that new HRM practices contributed to 13.1% variance in employee work innovation, innovation organization contributed to 35.4% variance in employee work innovation, and learner organizations contributed to 44.8% variance in employee work innovation. In general, the results of regression analysis indicated that the independent variables, including new HRM, innovation organization, and learner organizations, all combined, contributed to 76.3% variance in employee work innovation (Wijaya et al., 2023).

The role of human resource management practices on organizational innovation: the importance of innovation-driven human resource practices

The study explored the role of human resource management (HRM) practices on organizational innovation in Ghana. Specifically, the objectives of the study included determining the effect of high-performance work systems (HPWS) on organizational innovation, finding out the effect of commitment to human resource management practices (CHRMPs) on organizational innovation, and establishing the effect of innovation-driven HRM practices on organizational innovation (Gampine & Batieno, 2023).

The target population included staff working in the sales and service centers in Ghana. A sample size of 126 respondents was selected to participate in the study. Data collection was done using a questionnaire. The collected data was analyzed using descriptive statistics such as frequency, percentage, mean, and standard deviation. The findings were presented in tables as required (Gampine & Batieno, 2023).

The results of PLS-SEM analysis indicated that HPWS had a positive and significant impact on organizational innovation, HCHRMP had a positive and significant impact on organizational innovation, and IHRMP had a positive and significant impact on organizational innovation (Gampine & Batieno, 2023).

The influence of human resource practices on organizational innovation is mediated by knowledge management.

The study explored the influence of human resources practices (HRP) on organizational innovation in village-owned enterprises, Indonesia. The specific objectives of the study included the following: to establish the effect of performance appraisal on organizational innovation with knowledge management as a mediator variable, to determine the effect of career management on organizational innovation with knowledge management as a mediator variable, to find out the effect of training on organizational innovation with knowledge management as a mediator variable, to assess the effect of reward systems on organizational innovation with knowledge management as a mediator variable, and to evaluate the effect of recruitment on organizational innovation with knowledge management as a mediator variable (Bakti et al., 2022).

The target population was village-owned enterprises in the South Buton regency of Sulawesi Province, Indonesia. A sample size of 157 respondents participated in the study. Data collection was done using a questionnaire. The collected data was analyzed using descriptive statistics. Regression analysis was employed to assess the effect of the independent variables on the dependent variable. The results were presented in tables as deemed fit (Bakti et al., 2022).

The results of regression analysis indicated that when all factors are maintained at a constant, HRP explained 76.9% variance in knowledge management, and HRP explained 60.2% variance in organizational innovation. Knowledge management explained 31.8% variance in organizational innovativeness, while HRP explained 24.5% variance in organizational innovativeness, with knowledge management playing a positive mediating role (Bakti et al., 2022).

How do human resource management practices affect the innovation of small and medium-sized enterprises in a transition economy?

The study explored the influence of human resource management practices on innovation in small and medium-sized enterprises (SMEs) in Vietnam. The study’s main objectives included the following: to determine the relationship between the adoption of HRM practices and the quality of human and physical capital assets employed; to find out the effect of HRM practices on innovation; and to assess the effect of HRM practices on value addition and labor productivity in SMEs (Nam & Luu, 2022).

The target population included 2,500 SMEs operating in the manufacturing sector in Vietnam. Respondents for the study were drawn from managers and owners of the target SMEs. Data collection was done using a questionnaire. The collected data was analyzed using descriptive and inferential statistics. The findings were presented in tables as deemed fit (Nam & Luu, 2022).

The results revealed that SMEs in Vietnam have not largely adopted HRM practices. The reasons for this state of affairs are that HRM practices are considered costly and/or the SMEs are unaware of the benefits of adopting such practices. The results also indicated that adoption of HRM practices had a positive influence on innovation in the target SMEs. The results also indicated that adoption of HRM practices had a positive impact on SME performance in terms of value addition and labor productivity (Nam & Luu, 2022).

Human resource management in promoting innovation and organizational performance

The study focused on the effect of human resource management on innovation and organizational performance in SMES in Bali, Indonesia. The specific objectives of the study included the following: to establish the effect of HRM on organizational performance in target SMEs, to evaluate the effect of HRM on innovation in the target SMEs, and to assess the effect of innovation on organizational performance (Riana et al., 2020).

The target population included 42 SMEs operating in Bali, Vietnam. A sample size of 168 respondents was selected to participate in the study. Data collection was done using a questionnaire. The collected data was analyzed using descriptive statistics. The PLS-SEM model was used to assess the effect of independent variables on the dependent variable. The results were presented in tables as deemed fit (Riana et al., 2020).

The results indicated that HRM had a positive and significant impact on organizational performance in the target SMEs; HRM had a positive and significant impact on innovation in the target SMEs; innovation had a positive and significant impact on organizational performance in the target SMEs (Riana et al., 2020).

The effect of human resources management practices on innovation and employee performance (study conducted at NGOs, members of FONGTIL, Dili)

The study focused on the effect of human resources management practices (HRMP) on innovation in local NGOs operating in Indonesia. Specifically, the study is set to achieve the following objectives: to determine the effect of HRMP on innovation in local NGOs, to find out the effect of HRMP on employee performance in local NGOs, and to establish the effect of innovation on employee performance in the local NGOs (Silva et al., 2020).

The target population included 18 local NGOs that are members of FONGTIL, Dili, Indonesia. A sample size of 167 respondents was selected to participate in the study. Data collection was done using a questionnaire. Descriptive statistics were used to analyze descriptive variables of the study. The PLS-SEM method was used to assess the effect of the predictor variables on the outcome variable. The results were presented in tables as required (Da Silva et al., 2020).

The results of PLS-SEM analysis indicate that HRM practices had a positive and significant impact on employee performance in the target NGOs; HRM practices had a positive and significant impact on innovation in the target NGOs; and lastly, innovation in the local NGOs had a positive and significant impact on employee performance (Silva et al., 2020).

How human resource management practices translate into sustainable organizational performance: the mediating role of product, process, and knowledge innovation

The study examined the influence of innovation on the relationship between human resource management (HRM) practices and organizational performance in the banking sector in China. The specific objectives of the study included the following: to determine the effect of HRM practices (employee staffing, staff development, performance management, and compensation & benefits) on sustainable organizational performance and to examine the effect of innovation on the relationship between HRM practices and organizational performance. The target population included banks operating in Shanghai, China. A sample size of 365 staff from the target banks was selected to participate in the study. Data collection was done using a questionnaire. Descriptive statistics like frequency, percentage, mean, and standard deviation were used to analyze the descriptive variables of the study. The partial least squares structural modeling (PLS-SEM) was used to establish the effect of predictor variables on the outcome variable. The results were presented in tables as deemed appropriate (Rasool et al., 2019).

The results of the PLS-SEM indicated the following: employee staffing had a positive and significant effect on sustainable organizational performance; staff development had an insignificant effect on sustainable organizational performance, performance management had a positive and significant effect on sustainable organizational performance, and compensation & benefits had a positive and significant effect on sustainable organizational performance (Rasool et al., 2019).

In addition, the results indicated that employee staffing had a positive and significant effect on product, process, and knowledge innovation; performance management had a positive and significant effect on product, process, and knowledge innovation; staff development had a positive and significant effect on product, process, and knowledge innovation; and compensation and benefits had a positive and significant effect on product, process, and knowledge innovation (Rasool et al., 2019).

Furthermore, the results indicated that product, process, and knowledge innovation positively mediated the relationship between employee staffing and sustainable organizational performance; product, process, and knowledge innovation positively mediated the relationship between performance management and sustainable organizational performance; product, process, and knowledge innovation positively mediated the relationship between staff development and sustainable organizational performance; and product, process, and knowledge innovation positively mediated the relationship between compensation & management and sustainable organizational performance (Rasool et al., 2019).

How new HRM practices, organizational innovation, and innovative climate affect innovation performance in the IT industry: a moderated-mediation analysis

The study focused on the influence of HRM practices, organizational innovation, and innovative climate on innovation performance in the Pakistan IT industry. The specific objectives of the study included the following: to determine the effect of NHRM practices on innovation performance in the Pakistan IT sector; to assess the mediation role of organizational innovation on the relationship between NHRM practices and innovation performance; to examine the mediation role of innovative climate on the relationship between NHRM practices and organizational innovation; and to assess the mediation role of innovative climate and organizational innovation on the relationship between NHRM practices and innovation performance (Waheed et al., 2019).

The target population included staff working in the IT sector in Pakistan. A sample size of 1100 respondents was selected to participate in the study. Data collection was done using a questionnaire. Descriptive statistics such as frequency and percentage were used to analyze descriptive variables of the study. The Baron and Kenny test technique was used to assess the effect of predictor variables on the outcome variables. The results were presented in tables as deemed fit (Waheed et al., 2019).

The findings indicated that NHRM was significantly correlated to organizational innovation and innovation performance. In addition, the findings revealed that organizational innovation and innovation performance were positively correlated. Furthermore, NHRM was significantly linked to organizational performance. It was also established that the organizational innovation mediated the relationship between NHRM and innovation performance. It was also established that innovative climate mediated the relationship between NHRM practices and organizational innovation. Also, innovative climate was shown to mediate the relationship between NHRM and innovative performance in the target firm (Waheed et al., 2019).

Relationship between modern human resource management practices and organizational innovation: An empirical investigation from the banking sector of China

The study investigates the relationship between modern human resource management (mHRM) practices and organizational innovation in the banking sector in China. Specifically, the objectives of the study included the following: to determine the effect of recruitment & selection on organizational innovation; to establish the effect of performance management on organizational innovation; to find out the effect of training & development on organizational innovation; to assess the effect of HR technology on organizational innovation; and to evaluate the effect of compensation & benefits on organizational innovation in the target firms (Rassol et al., 2019).

The target population included 25 Shanghai branches of five Chinese banks that have implemented modern HRM practices. A sample size of 300 respondents was selected to participate in the study. Data collection was done using a questionnaire. The collected data were analyzed using descriptive statistics, including frequency, percentage, mean, and standard deviation. Regression analysis was employed to establish the effect of predictor variables on the dependent variables. The findings were presented in tables as deemed fit (Rassol et al., 2019).

The results of regression standardized coefficients indicated that when all factors are kept constant, recruitment & selection explained 27.1% variance in organizational innovation; performance management explained 33.4% variance in organizational innovation; training & development explained only 3.7% variance in organizational innovation; HR technology explained 14.8% variance in organizational innovation; while compensation & benefits explained 4.4% variance in organizational innovation. This means that compensation & benefits and training & development were the mHRM practices with the least impact on organizational innovation. On the other hand, performance management and recruitment & selection were the mHRM practices with the greatest impact on organizational innovation in the target Chinese banks. In general, the results of regression analysis indicated that all the mHRM practices combined contributed to 40.2% variance in organizational innovation in the target banks (Rassol et al., 2019).  

The impact of human resource management practices on the innovative ability of employees is moderated by organizational culture.

The study explored the impact of human resource management practices (HRMP) on the innovative ability of employees working in the banking sector of Vehari, Islamabad. The specific objectives of the study included the following: to determine the effect of recruitment strategy on employee innovation; to establish the effect of training on employee innovation; to assess the effect of performance appraisal on employee innovation; to find out the effect of career management on employee innovation; to evaluate the effect of reward strategy on employee innovation; and to assess the mediating effect of organization culture on the relationship between HRM practices and employee innovation (Aman et al., 2018).

The target population included employees working in the banking sector in Vehari, Islamabad. A sample size of 276 respondents was selected to participate in the study. Data collection was done using a questionnaire. Descriptive statistics such as frequency, percentage, mean, and standard deviation were used to analyze descriptive variables of the study. Regression analysis was used to assess the effect of the independent variables on the dependent variable. The findings were presented in tables as required (Aman et al., 2018).

The results of regression standardized coefficients indicated that when all factors are held constant: rewards strategy explained 25% variance in employee innovation in the target banks; career-oriented training explained only 2% variance in employee innovation; performance appraisal explained 24% variance in employee innovation; recruitment strategy explained 22% variance in employee innovation; performance-oriented training explained only 5% variance in employee innovation, while career management explained 12% variance in employee innovation in the target banks. In addition, the results indicated that organization culture explained 24.7% variance in employee innovation. Also, the findings indicated that organization culture positively mediated the relationship between HRM practices and employee innovation in the target banks (Aman et al., 2018).

The impact of human resources management practices on innovation performance. An empirical study on Jordanian private hospitals

This study focused on the impact of human resource management practices on innovation performance in Jordanian private hospitals. The objectives of the study included the following: to determine the effect of compensation on innovation, to establish the effect of training and development on innovation, to find out the effect of human resource planning on innovation, and to evaluate the effect of performance appraisal on innovation (Al Haraisa, 2016).

The target population included 14 Jordanian private hospitals operating in Amman City. A sample size of 182 respondents was selected to participate in the study. Data collection was done using a questionnaire. The collected data was analyzed using descriptive statistics such as frequency, percentage, mean, and standard deviation. Regression analysis was also employed to assess the effect of the predictor variables, including compensation, training & development, human resource planning, and performance appraisal, on the outcome variable, that is, innovation. The findings were presented in tables as required (Al Haraisa, 2016).

The results of regression analysis indicated that the predictor variables contributed to 72.9% variance in the dependent variable. Specifically, the results of the regression standard coefficients indicated that when all factors are kept constant, compensation contributed to 53.1% variance in innovation in the target hospitals, training & development contributed to 54.6% variance in innovation in the target hospitals, and human resource planning contributed to 46.5% variance in innovation in the target hospitals, while performance appraisal contributed to 45.7% variance in innovation in the target hospitals (Al Haraisa, 2016).

Human resource management practices and organizational innovation: an empirical study in Malaysia

The study explored the effect human resource management (HRM) practices on organizational innovation in manufacturing firms in Malaysia. The specific objectives of the study included the following: to determine the effect of HRM (performance appraisal, career management, training, reward system, and recruitment) practices on product innovation; to find out the effect of HRM (performance appraisal, career management, training, reward system, and recruitment) practices on process innovation; and to determine the effect of HRM (performance appraisal, career management, training, reward system, and recruitment) practices on administrative innovation (Ling & Narsudin, 2010).

The target population included manufacturing firms located in six states of Peninsular Malaysia. A sample size of 674 respondents was selected to participate in the study. Data collection was done using a questionnaire. Descriptive statistics were used to analyze the descriptive variables of the study. Regression analysis was used to assess the effect of predictor variables on the outcome variables. The results were presented in tables as deemed appropriate (Ling & Narsudin, 2010).

The results of regression analysis indicated that when all factors are held constant, performance appraisal explained 18% variance in organizational innovation, career management explained 12% variance in organizational innovation, and training explained 36% variance in organizational innovation. The reward system had a negative impact on organizational innovation, and also, recruitment had a negative impact on organizational innovation in the target firms (Ling & Narsudin, 2010).

Citations

Al Haraisa, Y.E. (2016). The impact of human resource management practices on innovation performance. An empirical study on Jordanian private hospitals. International Journal of Academic Research in Accounting, Finance, and Management Sciences, 6(4), 185-195.

Aman, Q., Noreen, T., Khan, I., Rafaqet, A., and Yasin, A. (2018). The impact of human resource management practices on the innovative ability of employees is moderated by organizational culture. International Journal of Organizational Leadership, 7(20), 426-439.

Bakti, S., Hatani, L., and Jopang, D. (2022). The influence of human resource practices on organizational innovation: mediated by knowledge management. Journal of Positive School Psychology, 6(8), 8600-8612.

Da Silva, J., Riana, I.G., and Soares, A.D.C. (2020). The effect of human resource management practices on innovation and employee performance (study conducted at NGOs, members of FONGTIL, Dili). International Journal of Multicultural and Multi-religious Understanding, 7(9), 322-330).

Guha, S., Rabby S.K.M.A.H., Chwodhury, S.R., and Julee, S.A. (2025). Enhancing employee innovation capabilities through high-involvement HRM: mediating role of knowledge sharing and transformational leadership. Future Business Journal, 11(59). 

Ling, T.C. and Narsudin, A.M. (2010). Human resource management practices and organizational innovation: an empirical study in Malaysia. The Journal of Applied Business Research, 26(4).

Marwan, M. and Alhadar, F. (2024). Effects of HR management practices on employee innovative work behavior with two mediators. Jurnal Manajemen, 28(2), 247-271.

Rasool, S.F., Samma, M., Anjum, A., Munir, M., and Khan, T.M. (2019). Relationship between modern human resource management practices and organizational innovation: An empirical investigation from the banking sector of China. International Transaction Journal of Engineering, Management, & Applied Sciences & Technologies, 10(19). 

Rasool, S.F., Samma, M., Wang, M., Zhao, Y., Zhang, Y. (2019). How human resource management practices translate into sustainable organizational performance: the mediating role of product, process, and knowledge innovation. Psychology Research and Behavior Management, 12.

Riana, I.G., Suparna, G., Suwandana, I.G.M., Kot, S., and Rajiani, I. (2020). Human resource management in promoting innovation and organizational performance. Problems and Perspective in Management, 18(1).

Waheed, A., Miao, X., Waheed, S., Ahmad, N., and Majeed, A. (2019). How new HRM practices, organizational innovation, and innovative climate affect the innovation performance in the IT industry: a moderated-mediation analysis. Sustainability, 11(621).

Wijaya, G.A., Misbahudin, D., Baha, M.A., Yanti, A.D. (2023). The influence of human resource management practices, organizational innovation, and learning organization culture on innovation work performance. Jurnal Manajemen (Edisi Elektronik), 14(1), 57-71.