Relational quality and innovative performance in R&D based Science and Technology Firms

The knowledge-based view of the firm implies that the innovative performance of R&D based organisations is strongly influenced by the quality of their relational capital. However, the quality of the employment relationship has been underplayed in this perspective. A model is developed that tests the quality of three dimensions of the employment relationship – the psychological contract, affective commitment and knowledge-sharing behaviours – and their consequences for innovative performance amongst 429 R&D employees in six different science and technology based firms. Analysis found that affective commitment plays an important role in mediating psychological contract fulfilment on knowledge-sharing behaviour, which in turn is strongly related to innovative performance. More specifically, fulfilment of the job design dimension of the psychological contract has an independent positive association with innovative performance, whereas fulfilment of the performance pay dimension is negatively associated.