Abstract:
In today’s volatile and competitive business environment, sustainable
organizational performance (SOP) demands more than traditional efficiency; it
requires adaptive strategies and innovative thinking. This study investigates
how Human Resource Management (HRM) practices serve as strategic levers
to foster Organizational Innovation (OI), thereby enhancing SOP in the
banking sector of Sri Lanka’s Batticaloa District. A quantitative study used
primary data from 238 bank employees in Batticaloa District, measured with a
five-point Likert scale. Data were analyzed using univariate, bivariate, and
multivariate methods via SPSS (Version 22). The current study examines the
mediating role of OI in the HRM–SOP relationship. Findings confirm that
while HRM practices significantly influence SOP, their impact is amplified
when mediated through OI. The results underscore the value of HRM practices
in cultivating a culture of innovation that drives sustainability. This study
contributes to the underexplored intersection of HRM, innovation, and
sustainability in emerging economies. It provides strategic insights for
practitioners seeking to steer their organizations through dynamic markets
with agile, people-centric strategies. By aligning HRM systems with innovation
objectives, firms can unlock the human capital potential necessary for
sustainable success despite resource constraints and unpredictability.
