High-performance human resource management and firm performance

Abstract

Purpose – Human resources have become a key issue in relation to the strong competition between service firms. Therefore, the purpose of this paper is to explore the relationship between high-performance human resource management (HRM) within this field to firm performance, making a useful attempt to explore the “black box” of enterprise human resources management effect on firm performance. Design/methodology/approach – In order to validate the relationship between high-performance HRM and firm performance, Chinese service industry samples were collected. Structural equation modeling and regression are adopted to estimate the direct effect of high-performance HRM on firm performance and the mediating role of innovation. Findings – The results show that the impacts of high-performance HRM on firm performance are significant. Moreover, innovation plays a partial mediating role between them. Training, work analysis and employee participation has a significantly positive impact on firm performance, while effects of profit sharing, employee development and performance evaluation on enterprise performance is not significant. The results strongly support the hypothesis that innovation holds intermediary variables between high-performance HRM and firm performance. Practical implications – Studying the relationship between high-performance HRM and firm performance can help Chinese enterprises more reasonable and effective learning foreign advanced management ideas and methods. And then can help Chinese enterprises to establish a high-performance HRM system that is suitable for Chinese enterprises; the research can help enterprises to identify meaningful practice of human resources management, outstanding keys, and perfect the HRM system of enterprises; research on innovation and innovative thinking is conducive to develop employees’ innovation motive, promote employee’ innovative behavior, and improve firm performance. Originality/value – This paper takes innovation as a mediating variable into the model and studies the intermediary role of innovation.