Role of Flexibility-oriented HRM System in Promoting Human Resource Flexibility for Firm Innovation

Abstract

Although the role of human resource management (HRM) systems in achieving superior firm innovation has gained prominence, the research on the mediating mechanisms has remained understudied. The present study examines the role of a flexibility-oriented HRM system in promoting human resource flexibility to achieve superior innovation. The hypothesized assumptions were tested using data gathered from 135 Pakistani businesses. Partial least squares structural equation modeling was applied to confirm the hypotheses. Findings suggest that a flexibility-oriented HRM system is essential in enhancing firm innovation performance. Furthermore, our study shows that flexibility-oriented HRM practices promote human resource flexibility, resulting in superior firm innovation. The influence of a flexibility-oriented HRM system on company innovation is transferred through human resource flexibility as an underlying mechanism. Our research advances both the theoretical and practical fields by demonstrating to HR professionals and upper management that creating and executing a flexible HRM system may help businesses outperform their competitors in terms of innovation.