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HRM Practices and Organizational Performance: Mediation Effect of Innovation

Author

Listed:
  • Turulja Lejla

    (PhD Associate Professor University of Sarajevo School of Economics and Business Sarajevo, Bosnia and Herzegovina)

  • Kožo Amra

    (Assistant Professor University of Sarajevo School of Economics and Business Address: Trg oslobođenja Alija Izetbegović 1 Sarajevo, Bosnia and Herzegovina)

  • Kurtić Emir

    (PhD Associate Professor University of Sarajevo School of Economics and Business Sarajevo, Bosnia and Herzegovina)

  • Bach Mirjana Pejić

    (PhD Full Professor University of Zagreb, Faculty of Economics & Business, Zagreb, Croatia)

Abstract

The main aim of this study is to explore the mediating effect of innovation in the relationship between human resource management (HRM) practices and organizational performance. HRM practices are observed through selective hiring, training, participative decision-making, and rewarding. Innovation is conceptualized over behavioral, product, process, and market innovation. The study relies upon the principles of social exchange theory and resource-based theory. Data were collected from 408 managers in an emerging economy context. The proposed conceptual model is evaluated with structural equation modeling using Lisrel 8.8 and SPSS 22. Study findings suggest that innovation influences the relationship between selective hiring, training, and participative decision-making and organizational performance. However, no mediating effect of innovation was found in a relationship between rewarding and organizational business performances. Since human resources and innovation are among the leading sources for building competitive advantage for companies, the study findings contribute to HRM and innovation.

Suggested Citation

  • Turulja Lejla & Kožo Amra & Kurtić Emir & Bach Mirjana Pejić, 2023. "HRM Practices and Organizational Performance: Mediation Effect of Innovation," South East European Journal of Economics and Business, Sciendo, vol. 18(1), pages 85-99, June.
    • Handle: RePEc:vrs:seejeb:v:18:y:2023:i:1:p:85-99:n:13
    DOI: 10.2478/jeb-2023-0007
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    References listed on IDEAS

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    1. Arranz, N. & Arroyabe, M.F. & Li, Jun & de Arroyabe, J.C. Fernandez, 2019. "An integrated model of organisational innovation and firm performance: Generation, persistence and complementarity," Journal of Business Research, Elsevier, vol. 105(C), pages 270-282.
    2. Verma, Surabhi & Gustafsson, Anders, 2020. "Investigating the emerging COVID-19 research trends in the field of business and management: A bibliometric analysis approach," Journal of Business Research, Elsevier, vol. 118(C), pages 253-261.
    3. James C. Anderson, 1987. "An Approach for Confirmatory Measurement and Structural Equation Modeling of Organizational Properties," Management Science, INFORMS, vol. 33(4), pages 525-541, April.
    4. Ruba Kutieshat & Panteha Farmanesh, 2022. "The Impact of New Human Resource Management Practices on Innovation Performance during the COVID 19 Crisis: A New Perception on Enhancing the Educational Sector," Sustainability, MDPI, vol. 14(5), pages 1-21, March.
    5. Kristiina Makelal; & Ingmar Bjorkman & Mats Ehrnrooth & Adam Smale & Jennie Sumelius, 2013. "Explaining stakeholder evaluations of HRM capabilities in MNC subsidiaries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 44(8), pages 813-832, October.
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    Cited by:

    1. Efendic Adnan, 2023. "Editorial," South East European Journal of Economics and Business, Sciendo, vol. 18(1), pages 1-1, June.

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    More about this item

    Keywords

    Innovation; Human Resource Management Practices; Organizational Business Performance;
    All these keywords.

    JEL classification:

    • M1 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management

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