Impact of Strategy, HRM Strength and HRM Bundles on Innovation Performance and Organizational Performance

Abstract

This study uses structural equation modeling to test a model of the impact of human resource management bundles on perceived organizational performance and innovation performance, on a large sample of companies. Strategic management orientation and innovation as a strategic factor are proposed to influence the existence of two types of HR bundles, functional flexibility and performance management, as well as contributing to stronger HR systems. HRM Strength, which integrates the 'metafeatures' of an HRM system and provides a common interpretation of organizational goals, has a strong positive impact on both innovation and organizational performances. Finally, while both the functional flexibility and performance management bundles have a positive impact on organizational performance, they do not seem to affect innovation performance.