Sustainable Human Resource Management and Organizational Outcomes: A Dynamic Capability Perspective

Abstract

Drawing on dynamic capabilities perspective, this research examines the relationship between Sustainable Human Resource Management (HRM) and firm innovation performance and financial performance. We suggest that Sustainable HRM positively influences firm innovation performance and financial performance, and these effects are mediated by a dynamic capability, organizational resilience. Moreover, under higher level of environmental dynamism, the positive effects of Sustainable HRM on firm innovation performance and financial performance are stronger. In addition, environmental dynamism also moderates the indirect effect of Sustainable HRM on firm innovation performance/financial performance through organizational resilience. We tested the predictions in two empirical studies. In Study 1, we developed and validated our Sustainable HRM scale through a qualitative study and a series of quantitative studies. In Study 2, using data from a sample of 181 companies in China, we found support for our hypotheses. The theoretical and practical implications of our findings as well as limitations and future research directions are discussed.