Leveraging the innovative performance of human capital through HRM and social capital in Spanish firms

Abstract

Literature on Intellectual Capital provides interesting arguments about the key role of social and human capital, not only separately but also jointly, for innovation activities. Thus, given the acknowledged importance of these variables, this article studies (1) the direct relationship between social and human capital and innovative performance, (2) the links between these two components of intellectual capital, as well as the possible mediating role of human capital, (3) the effect of particular human resource management (HRM) practices (selection procedures, development programmes, empowerment and use of incentives on compensation) on social and human capital, and (4) the influence of innovative performance on firm performance. In our study, we define a population of firms in the most innovative Spanish sectors for an empirical test of this model, focusing on their R&D departments. Using data taken from 85 firms and applying Structural Equation Models, we have tested the hypotheses and obtained interesting results. It is the uniqueness of human capital, and not its value, which has a direct and positive effect on firm innovativeness. Such uniqueness, in turn, is enhanced through social capital and HRM practices such as empowerment and employee selection based on learning potential and interpersonal abilities. Social capital does not have, per se, a direct influence on innovation, but it indirectly does through human capital. Social capital, in turn, can be enhanced by the selection of individuals with learning potential and interpersonal skills, as well as by their involvement in decision-making processes. Finally, innovation improves firm performance.

Perceptions of HR practices and innovative work behavior: the moderating effect of an innovative climate

“…Most such studies focus on innovation at the organizational level, where HR practices or HR systems have been shown to affect innovative outcomes, albeit through mediating variables such as knowledge or intellectual capital (Cabello-Medina, López-Cabrales, & Valle-Cabrera, 2011). The effect of HR practices on innovation at the individual level has received less attention (Yuan & Woodman, 2010).…”

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

“…Armstrong et al, 2010;Cabello-Medina et al, 2011;Jiménez-Jiménez and Sanz-Valle, 2008;Laursen and Foss, 2003;Shipton et al, 2005). However, the underlying mechanisms through which HRM influences organizational innovation requires further investigation.…”

Capturing the ‘Pioneering Minds’ via Human Capital: The Impact on Innovative Performance of Malaysian SMEs

“…This is because, there is a connection between the employees' knowledge and their ability to produce new products and services (Cabello-Medina et al, 2011). Unique employees' knowledge, skills, and abilities are called as rainmaker who contributes in developing innovative ideas and therefore products and services.…”

“…Researchers highlighted that in the labor market, employee with rare knowledge, skills and abilities are not usually observed (Amar, 2002). Thus, this unique knowledge facilitate entrepreneurs to compete in the market which constitutes an intangible resource for firm innovation (Cabello-Medina et al, 2011).…”