Organizational innovation has been recognized as an important instrument for organizations to compete in the competitive environment. Pakistan telecom sector strive to transform their business model from labour-intensive to knowledge-intensive, which intend to thrust themselves in higher value added activities such as, developing new products, processes, and services, to continual sustain the competitiveness. One of the means to increase the organizational innovation is through effective human resource management practices and effective knowledge management. This study examined the direct association between human resource management practices (performance appraisal, career management, training, reward system, recruitment and employee recognition) and organizational innovation. Moreover, it also observed the mediating role of knowledge management effectiveness on the direct relationship. Data was collected from a sample of 290 personnel of telecom sector of Pakistan. The regression results showed that human resource management practices generally had a positive impact on organizational innovation. Particularly, the results signify that training and employee recognition were positively related to three dimensions of organizational innovation. Performance appraisal also established to have a positive impact on administrative innovation. Additionally, this study also demonstrates that training, performance appraisal, and employee recognition were positively associated to knowledge management effectiveness.
HR Practices and Organizational Innovation: The Mediating Role of Knowledge Management Effectiveness
