Main Article Content
Abstract
HRM system enhances dynamic capabilities of firms which can lead to product and process innovation in financial service industries. To remain competitive, banks need to be innovative in serving different market segment by developing dynamic capability. The present study is exploratory in nature which uses secondary sources of data to find the role of HRM System in creating dynamic capability. A model is proposed to find out different type of linkages between HRM system, dynamic capabilities and innovation. First, a direct linkage between HRM system, dynamic capabilities and innovation is established .Second, the model proposes that bundling of HR practices creates organizational flexibility which in turn creates dynamic capability leading to innovation. Third, the model proposes that bundling of HR practices can enhance capacity of organizational learning and hence creation of dynamic capability that can increase the chances of innovations. Lastly, it is also proposed that bundling of HRM practices can directly lead to innovations.