How does innovation-oriented human resource management evolve in startups?

Abstract

This study develops a typology that shows different maturity levels of innovation-oriented HRM practices in startups and explores their association with innovation outcomes. Primary data were collected from 108 founders of startups located in independent innovation habitats partnered to the University of São Paulo (USP), Brazil. A typology of HRM practices was developed using Hierarchical Cluster Analysis (HCA), enabling the differentiation of HRM practices oriented to innovation across the sampled ventures. The resulting clusters were then related to the startups' innovation outcomes, including the average number of new products developed, improved products, new processes developed, improved processes, and patent applications. The analysis identifies a typology that classifies startups into three distinct clusters based on the maturity level of their innovation-oriented HRM practices. Cluster 1 includes startups at an early stage of HRM development; Cluster 2 comprises ventures with intermediate and evolving HRM practices; and Cluster 3 reflects advanced, consolidated HRM systems. We found a positive relationship between the maturity level of innovation-oriented HRM practices and innovation outcomes. This research develops a typology of different maturity levels of innovation-oriented HRM practices among startups. By focusing on HRM practices explicitly designed to foster innovation, the study provides empirical evidence that greater maturity level in such practices is positively associated with multiple innovation outcomes in startups.