Strategic Human Resource Management Practices and Innovation Performance in Small and Medium Enterprises: Evidence from Manipur
Keywords:
Strategic Human Resource Management; Innovation Performance; Small and Medium Enterprises; SMEs; Manipur; Human Capital; Emerging EconomiesAbstract
Small and Medium Enterprises (SMEs) play a critical role in employment generation, regional development, and economic diversification, particularly in emerging and peripheral regions such as Manipur. In today’s knowledge-driven and competitive business environment, innovation has emerged as a key determinant of SME survival and growth. However, innovation in SMEs is largely dependent on how human resources are managed, developed, and strategically aligned with organizational goals. Despite this, many SMEs continue to rely on informal and reactive human resource practices, limiting their innovation potential.
This study examines the relationship between Strategic Human Resource Management (SHRM) practices and innovation performance in SMEs, with empirical evidence from Manipur. Drawing on the Resource-Based View (RBV), Human Capital Theory, and the Ability–Motivation–Opportunity (AMO) framework, the study investigates how key SHRM practices—such as recruitment and selection, training and development, performance management, compensation, and employee engagement—influence innovation outcomes in SMEs.
Using primary data collected from 300 respondents, including SME owners, managers, HR personnel, and employees across manufacturing, IT-enabled services, and trading sectors, the study adopts a quantitative research approach supported by descriptive and inferential statistical analyses. The findings reveal that SMEs adopting structured and strategically aligned HR practices demonstrate significantly higher levels of product, process, and organizational innovation. The results further indicate that employee-centric HR practices enhance creativity, knowledge sharing, and continuous improvement, which collectively strengthen innovation performance.
The study contributes to the limited empirical literature on SHRM in SMEs within emerging economies, particularly in the context of Northeast India. It offers practical insights for SME owners, HR practitioners, and policymakers by emphasizing the need for structured HR systems, capacity building, and supportive policy frameworks to enhance innovation-driven competitiveness.
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