Determining approaches to human resource management in start-ups that foster innovation and boost organizational performance

Abstract

The aim of this paper is to analyze the main streams of literature pertaining to HR systems development in start-ups or SME-se and to identify the main approaches chosen by entrepreneurs and managers in the early stages of the business development cycle. For the purpose of this study, literature review has been conducted with particular focus on high-quality journals with a proven influence in the HRM and Innovation field. Concerning the research strategy, 23 papers published in Q1 and Q2 ranked journals (SJR) were analyzed, as well as 6 other sources inlcuding books, books proceedings and journals (not ranked in Scopus or WoS databases). Our findings support the development of an integrated approach that not only takes into account early investment into HR systems, but also considers how macroeconomic factors might influence the industry directly, and start-ups indirectly and incongruously. This integrated perspective maintains that human capital acquisition and the implementation of adequate HR policies and practices that support employee engagement and retention early on are significantly more beneficial to company performance and productivity in the longer run; whereas, at the same time exhibiting a high degree of flexibility and adaptability to business-and sector-specific preconditions and requirements. We argue that future research should concentrate on the industry as a factor determining the HR strategy to be adopted by start-ups, as opposed to debating which approach is more appropriate for start-ups without taking into account their operational environment.