Investigating Alignment Between HRM Configurations and Innovation Strategy Modes in Iranian Knowledge-Based Service Firms

This study aims to establish a relationship between HRM and innovation studies through human capital characteristics in order to achieve a better understanding of HRM’s supportive role in innovation realization aligned with knowledge-based services. The study provides a new model of coordination between innovation modes of service sector firms and HR configuration adopted for managing people in these firms. By gathering data about the main variables from 132 Iranian knowledge-based service firms with more than 30 employees, all located in Tehran province (selected through systematic sampling), the status of every firm in the field of innovation mode and HR configuration was determined. The hypotheses were tested using contingency tables and binomial test. After testing hypotheses, it was found that the strongest alignment exists between market-oriented innovation and productivity-based HR configuration (at about 53%). The average value for the human capital characteristics in firms that had two mentioned statuses were more than another three statuses. To achieve ideal human capital management, managers of KBSFs need to pay more attention to the compatibility of their HR configurations with innovation modes of KBSFs in order to approach the satisfactory productivity level seen in such firms.