HPWPs, Creativity, and Innovative Performance: Moderating Role of Knowledge Sharing

ABSTRACT This paper examines the effect of high‐performance work practices (HPWP) on innovation performance in the SME context, in particular how creativity and knowledge sharing support this linkage. The study draws on social cognitive theory and the ability, motivation, and opportunity (AMO) framework to outline a moderated mediation model of creativity and knowledge sharing unpacking the critical, but underexplored, link between HPWP and employee innovation performance in SMEs. Hypotheses are tested through time‐lagged (T1 and T2), multisource (dyadic, i.e., 269 sample including employees and managers) data from SMEs in Pakistan. The findings provide support for the hypothesized moderated mediation relationships including that creativity mediates the positive association between HPWP and employee innovation performance, and that knowledge sharing acts as a key moderator. These findings provide important guidelines for SMEs seeking to innovate for the future, highlighting not just the importance of HPWP but significantly how they operate to foster creativity and leverage knowledge sharing behavior.