Soft HRM Practices Fostering Service Innovations and Performance in Hospitality Firms

Abstract

This study explores the connections between soft HRM practices and organizational performance through the lenses of incremental service innovation (ISI) and radical service innovation (RSI). Data were collected via an online survey involving 225 hospitality managers in Vietnam’s hospitality sector. We utilized Partial Least Squares (PLS) analysis through SmartPLS 4.0 to examine the data. The findings reveal that soft HRM practices significantly influence both ISI and RSI, thereby enhancing financial and market performance. Additionally, ISI and RSI serve as mediators in the relationship between soft HRM practices and organizational performance. Our results offer fresh perspectives on the innovation-driven performance effects of soft HRM practices and contribute to bridging the gap in modeling the relationship between soft HRM and organizational performance within the context of service innovations. This study provides valuable insights for managers, suggesting strategies to enhance and identify critical aspects of soft HRM implementation that enable organizations to be more strategically adaptable and to consistently develop new services.