How New HRM Practices, Organizational Innovation, and Innovative Climate Affect the Innovation Performance in the IT Industry: A Moderated-Mediation Analysis

Abstract

Considering the cutthroat competition in IT organizations, public and state-based organizations are trying to develop strategies to promote innovation in the organizations. However, due to monopolistic structure, employee rigidness, and lack of innovation climate, employees are reluctant to perform innovatively in such organizations. New HRM practices (NHRM) can enrich the talented, motivated, committed, and innovative staff to enhance innovation. However, empirical evidence to prove this relationship is insufficient. Therefore, this study aims to analyze the effect of NHRM practices on innovation performance with the mediating role of organizational innovation and the moderating role of the innovation climate. Data collected from semi-government IT-based organizations provide results that there is a significant positive relationship between NHRM practices and innovation performance. The mediating role of organizational innovation was also found. Moreover, the results of the moderated-mediation show that the mediating role of organizational innovation is also strong if the organizational climate is more innovative. These results provide managerial guidelines to promote NHRM practices to enhance innovation performance in the semi-government IT-based organizations of Pakistan.