The effect of ability, motivation and opportunity (AMO) on SMEs' innovation performance

Abstract

While there is extensive research on SMEs' innovation, limited attention has been given to the specific implications of HRM practices in fostering innovation in this sector. This represents a critical gap, considering the unique challenges faced by SMEs in managing their human resources. Accordingly, in this study, we developed and validated a conceptual model that evaluates the ability of SMEs to enhance their innovation and innovation performance through the adoption of HRM practices that relate to employees' abilities, motivations and opportunities (AMO). Data was collected through a survey of manufacturing SMEs in France. Overall, the findings contribute to the literature by shedding light on the mediating role of innovation between HR‐enhancing practices and innovation performance in SMEs. In addition, the analysis highlights the importance of HRM practices in shaping workforce capabilities and influencing organizational performance. Moreover, it emphasizes the importance of structured HRM practices in attracting and retaining high‐quality human resources, akin to larger companies. These findings have practical implications for SME owners, managers and policymakers seeking to foster innovation and enhance organizational performance in the SME context.