The relationship between HRM, technology innovation and performance in China

Abstract

Purpose Human resource management (HRM) is seen as crucial for innovation and firm performance in China. This paper aims to carry out an empirical research to investigate the effects of main dimensions of HRM on technological innovation as well as organizational performance. Design/methodology/approach The research uses a sample of 194 high‐tech firms surveyed in eight provinces in China. Findings This research finds that employee training, immaterial motivation and process control have positive effects on technological innovation, while material motivation and outcome control have a negative influence on technological innovation. It is also found that technological innovation is positively related with performance. Research limitations/implications This study does not consider the different influence of every HRM dimension affecting different innovation types. This should be a future research topic. Practical implications This study provides useful managerial implication for managers. First, employee training is needed to develop employees' knowledge. Second, material incentive is needed but not main motivation in Chinese high‐tech firms. Third, process control should be emphasized more than outcome control in Chinese high‐tech firms. Originality/value This study demonstrated that the HRM significantly contributed to technological innovation and firm performance. This study demonstrates that Chinese high‐tech firms' HRM has an important influence on technological innovation, and lead to firm's superior performance.