HRM practices and innovation performance: a panel-data approach

Purpose The purpose of this paper is to study the relationship between human resource management (HRM) practices and innovation performance in Spanish manufacturing firms. The paper focuses on the number of existing patents, analyzing the extent to which this variable is favored by HRM practices. It will also assess the extent to which patents explain the firm performance and mediate in the relationship between the latter and HRM practices. Design/methodology/approach The objective is to assess these relationships using the Spanish Survey of Industrial Strategic Behavior. The longitudinal analysis focuses on the years between 2001 and 2008, a period of great economic growth in Spain. Findings The findings show that the most innovative firms were also the most competitive ones. Furthermore, employment security positively affects innovations over time and training on new technologies is associated with the number of patents, when overall compensation practices are high. Practical implications This study demonstrated the existence of two objectives that HR managers should be aiming at. On the one hand, the development of patents should be a priority for obtaining better results over time. On the other hand, management should invest in HRM practices because they favor innovation and are neither a waste of time nor resources. Originality/value This study contributes to the literature, surpassing the limitations of previous research, by assessing the role of HRM practices in innovation and company outcomes and by using a longitudinal study design.