The key role played by innovation in the talent management and organizational performance relationship
| Date | 22 August 2023 |
| Pages | 1347-1370 |
| DOI | https://doi.org/10.1108/ER-09-2022-0430 |
| Published date | 22 August 2023 |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
| Author | Roberto Luna-Arocas |
The key role played by innovation
in the talent management
and organizational
performance relationship
Roberto Luna-Arocas
Department of Business Management, Valencia University, Valencia, Spain
Abstract
Purpose –The key aspect of this study is the mediating role of innovation in the relationship between talent
management (TM) and organizational performance (OP).
Design/methodology/approach –A structural equation model with AMOS software is used to gauge the
impact of TM on innovation and OP. In this regard, innovation is the mediating variable of the model. The
author uses Hayes PROCESS macro for SPSS (Hayes, 2018) and the mediating procedure of Baron and Kenny’s
model (1986).
Findings –Results show that innovation is a full mediating variable that captures the whole variance of the
model in the relationship between TM and OP.
Practical implications –The results of this study are important for organizations since they emphasize the
need to adapt TM strategies to innovation and improvement in the organization. This involves not only
managers and their training and development plans but also employees in their attraction, development and
retention strategies.
Originality/value –The originality of this study is that it explores the causal relationship between the three
variables considered in the model, that is, TM, innovation and OP. These relationships evidence gaps in human
resource management and TM literature, improving current understanding of the role of innovation in the
organizational context.
Keywords Talent management, Human resources, Innovation, Organizational performance
Paper type Research paper
Introduction
Businesses today must cope with stiff competition and constant change (Oreg et al., 2018),
with human resource (HR) management (HRM) clearly being affected by this turbulent
environment. In this context, human capital and talent management (TM) are key for
business because they generate innovation and economic growth (Liu et al., 2017).
Moreover, in this changing environment, two keys to business strategy emerge. On the
one hand, TM strategies linked to knowledge management, business competitiveness and
organizational performance (OP) through human capital and HR (Della Torre et al., 2021;
Mousa and Ayoubi, 2019) become the greatest strategic challenge facing companies and their
managers and are key to their business future (Collings and Mellahi, 2009;Meyers and van
Woerkom, 2013;Mousa and Ayoubi, 2019;Rafique et al., 2021). On the other hand, innovation
strategies and their link with competitiveness and OP (Camison and Villar-L
opez, 2014) take
into consideration a renewal strategy for the organization (J€
arvi and Khoreva, 2020).
Innovation can be introduced throughout the organization by training employees in
innovation management (Kadar et al., 2014). That is why employees with potential and talent
are needed to be able to carry out this process of organizational transformation where ideas
are generated and shared, improving knowledge management (Tarique and Schuler, 2010),
and this entails being very conscious of whether you have the necessary talented staff
throughout the organizational structure (Dorasamy, 2021).
The role of
innovation
1347
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/0142-5455.htm
Received 15 September 2022
Revised 24 December 2022
12 May 2023
14 July 2023
Accepted 17 July 2023
Employee Relations: The
International Journal
Vol. 45 No. 6, 2023
pp. 1347-1370
© Emerald Publishing Limited
0142-5455
DOI 10.1108/ER-09-2022-0430
Scientific and practitioner research also concurs in the assessment of innovation as one of
the cornerstones of economic development and as an essential element in increasing
competitiveness in a globalized environment (Li et al., 2022;Lopez-Cabrales et al., 2009).
Innovation encompasses new business models, new products or services, new procedures
and technological developments as well as new organizational aspects (Curado, 2018;
Jim
enez-Jim
enez and Sanz-Valle, 2008;OECD/Eurostat, 2005), with all of these innovations
being thought out and created actively by the talented staff within the organization (Awan
and Jehanzeb, 2022;Kianto et al., 2017;Su et al., 2020).
Given the above, this study focuses on analyzing what impact TM has on OP, considering
the innovation applied by organizations as a mediator (Ferreira et al., 2021;Khan et al., 2022;
Nawal et al., 2021;Rasool et al., 2019). This article seeks to bridge two main gaps in the
literature concerning TM, innovation and OP.
In the first place, although there is already a relative literature on the impact of human
capital on innovation management, it is necessary to strengthen both the theoretical and
empirical evidence (Agostini and Nosella, 2017;Combs et al., 2006;Farrukh et al., 2022;Jarrod
et al., 2022;Mohammed et al., 2021;Su et al., 2020;van Uden et al., 2017;Waheed et al., 2019).
Secondly, our model contributes as a differential value a direct relationship between human
capital, innovation and performance, and although there are already enough studies among
them, we cannot say the same of the complete model between the three variables. For this
reason, this study fills an important gap in the literature by analyzing the impact that
innovation that comes from human capital has on performance (Cooke and Saini, 2010;Para-
Gonzalez et al., 2018;Voorde et al., 2013).
Theoretical framework: resource-based view (RBV) of the firm
The resource-based view (RBV) has attracted significant attention from the management
scholars (Hitt et al., 2016;Gunasekaran et al., 2017;Mishra et al., 2018;Dubey et al., 2018) for its
application in a wide range of organizations and industries (Barney et al., 2001;Nason and
Wiklund, 2018;Zahra, 2021) and for its theoretical implications (Davis and DeWitt, 2021;
Gibson et al., 2021;Greve, 2021;Barney et al., 2021). The RBV argues that a firm gain
competitive advantage through bundling of strategic resources and capabilities (Barney,
1991;Barney et al., 2001). The RBV postulates that some assets in the company generate
capacities that are dynamic and that provide a competitive advantage that is sustainable,
having these capacities the properties of being scarce and very difficult to imitate (Amit and
Schoemaker, 1993;Barney, 1991).
Previous research has considerably used the RBV to examine the associations among
companies’resources, capabilities and performance (Buli, 2017;Dogbe et al., 2019,2020;
Najafi-Tavani et al., 2013;Nason and Wiklund, 2018;Rodr
ıguez-Pinto et al., 2011) and with
firm growth (Nason and Wiklund, 2018;Zupic and Drnovsek, 2014) mainly because it has
been linked to superior performance in long-term competitive advantages in dynamic
markets (Fakhreddin and Foroudi, 2022;Zahra, 2021).
Resources are defined as stocks of tangible and intangible assets, such as knowledge,
processes, skills, etc., that are controlled and utilized by firms to create value from
implementing strategic activities (Barney, 1991;Barney et al., 2021;Popli et al., 2017).
The RBV theory has received its support from different scientific meta-analyses in
business management literature (Saridakis et al., 2017). In fact, different meta-analysis
indicates a high and significant relationship between human resources and company
performance (J. G. Combs et al., 2006;Crook et al., 2011), but the question that emerges is
whether this talent management is superior to other resources (Barney et al., 2021). The scope
of application of this theory to TM combines both employee behaviour and the application of
HR practices applied to them. This combination generates a competitive advantage for
ER
45,6
1348
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