Interplay between HPWS and Innovation: Evidence from Vietnamese Small Businesses

This study examines the interplay between high-performance work systems (HPWS) and the innovation performance of Vietnamese small and medium-sized enterprises (SMEs). Our conceptual model relies on componential theory of creativity along with constructs of HPWS, learning orientation, creativity and innovation to hypothesize both mediation and moderation mechanisms linking such a relationship. Using a sample of 133 small firms, we conduct both mediation and moderation analyses. We find that (1) employee creativity mediates the relationship between HPWS and firm innovation; and (2) learning orientation moderates the relationship between HPWS and employee creativity. Finally, we discuss both theoretical and practical implications of these findings. Keywords: HPWS, learning orientation, creativity, innovation, SMEs.