How do high performance work systems influence organizational innovation in professional service firms?

Abstract

Purpose – The purpose of this paper is to examine how a system of human resource management (HRM) practices, labelled high-performance work systems (HPWS), influences organizational innovation in professional service firms (PSFs). In this study, innovation in PSFs is seen as an indicator of firm performance and is calculated as the revenue per person generated from new clients and new services, respectively. Design/methodology/approach – Quantitative data were collected from 195 managing partners, HR managers or experienced Partners in 120 Irish accounting firms. Hierarchical regression analysis was used to test the hypotheses. Findings – The analysis results indicate strong support for the mediating role of employees’ innovative work behaviours in the relationship between HPWS and two types of PSFs’ innovation performance. Practical implications – Managers need to effectively adopt and implement innovation-based HRM practices to encourage and support employees’ creative thinking and innovation. Through the adoption and utilization of these practices managers can enhance the firm’s innovation and its performance. Originality/value – This study contributes to our understanding of the link between HRM and firm innovation by explicating a pathway between these variables. This study also generalizes consistent findings on the HRM-firm innovation relationship to a different context, i.e. PSFs.

High performance work systems and corporate performance: the influence of entrepreneurial orientation and organizational learning

“…As organizational learning includes training, information gathering, interpretation, retaining, transferring, and organizational memory (Argote 2012;Liu and Ko 2012), HPWS can be understood by employees and be easily instilled into their mindsets. They will take the initiative to absorb, learn and share knowledge, apply knowledge to their work and create new ideas (Fu et al 2015).…”

“…High levels of organizational learning may be needed to ensure the effective implementation of HPWS. Corporations with higher levels of organizational learning can more effectively put high performance work systems into effect and bring their positive effects on corporate performance into full play (Fu et al 2015). Consequently, organizational learning may influence the relationship between HPWS and corporate performance.…”

In Search of Key HR Practices for Improvement of Productivity of Employees in the KIBS Sector

“…In addition, although numerous studies pointing to a positive correlation between these systems and high task results of employees exist, there are still many unresolved issues, including, among others, the influence that HRM mechanisms exert on efficiency and effectiveness is insufficiently explained (Becker & Gerhart, 1996;Purcell, Kinnie, Hutchinson, Rayton, & Swart, 2003), no intervening variables are taken into account in analyses (Huselid & Becker, 1996), and the characteristic nature of service firms is disregarded -the majority of examinations are chiefly based on production companies, whereas some of their practices are inadequate for service firms (Fu, Flood, Bosak, Morris, & O'Regan, 2015). Hence the problems that have been indicated give rise to new research areas.…”

“…As far as the second area of interest is concerned, it is stressed that HR practices play a major role in facilitating absorption, transfer, sharing, exchange, and creation of knowledge. Simultaneously, they improve an organization's capability of combining, developing, and using sources of knowledge in creating competitive advan- For the purpose of measurement of HR practices, statements derived from tools used for examination of HR practices were adopted (Fu et al 2015;Guthrie, 2001;Huselid, 1995;Tsai, 2006), which referred to conceptualization of high performance work systems.…”

A decision support system and a mathematical model for strategic workforce planning in consultancies

“…Consultancies, like other professional service firms (PSFs), have a highly educated and professionalized workforce that provides clients with customized, complex solutions. Both inputs and outputs are expert knowledge (Fu et al 2012(Fu et al , 2015. The strategic capacity planning problem typically sets a long-term planning horizon.…”