HRM Practices and Organizational Performance: Mediation Effect of Innovation

Turulja Lejla (), Kožo Amra (), Kurtić Emir () and Bach Mirjana Pejić ()
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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

South East European Journal of Economics and Business, 2023, vol. 18, issue 1, 85-99

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.

Keywords: Innovation; Human Resource Management Practices; Organizational Business Performance (search for similar items in EconPapers)
JEL-codes: M1 M12 M15 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:vrs:seejeb:v:18:y:2023:i:1:p:85-99:n:13

DOI: 10.2478/jeb-2023-0007

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