Do High-Performance Work Practices Influence Organizational Innovation? Mediating Role of Human Capital

Abstract

Due to globalization and competitive business environment, organizations need to update their information to remain innovative and competitive. Moreover, high-performance work practices (HPWPs) play a vital role that determines organizational success. The current study is performed to scrutinize the effect of high-performance work practices on the organizational innovation with the mediating effect of human capital. Survey questionnaire method was adopted, and data were collected from 202 employees by applying simple random sampling technique. Scales validation has been checked by confirmatory factor analysis (CFA) by using Smart PLS. Moreover, the structure equation modeling technique (SEM) has also been used to test the hypotheses. Findings revealed that there is a positive and significant relationship between high-performance work practices (participation, empowerment, work-life balance, recruitment & selection) and organizational innovation. Additionally, results also purported that human capital significantly mediates the relationship b/w high-performance work practices (participation, empowerment, work-life balance, recruitment & selection) and organizational innovation.