The Effects of Human Resource Development Investment and Learning Practices on Innovative Performance of Organizations

Abstract

In strategy and SHRM literature, scholars have long acknowledged the critical role of human resource as a source of inimitable competitive advance of organizations.Despite prevalent theoretical discourses on the importance of human capital, empirical investigations have mostly focused on the effects of HRM on traditional organizational outcomes such as productivity, financial performance, and turnover.The present study attended to the effect of HRM on organizational innovation that has been largely ignored in the literature.We proposed that an organization's HRD (Human Resource Development) investment promote its innovative performance by facilitating various learning practices.We empirically tested our hypotheses using a longitudinal, multi-source data of 419 Korean companies representing diverse industries.Our analysis showed that HRD investment predicted interpersonal and organizational learning practices, which in turn increased the number of patents over a two year period.The collective learning practices mediated the effects of HRD investment on organizational innovations.Our data also revealed that the positive relationship between collective learning practices and organizational innovation was much stronger in organizations with high innovative climate than in those with low innovative climate.All in all, this study clarifies the mechanism through which HRM efforts lead to a core organizational performance such as innovation.

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