Digitizing success: Leveraging digital human resource practices for transformative productivity in Chinese SMEs

Background: & Purpose: In the rapidly evolving digital landscape, digital human resource (HR) practices in small and medium-sized enterprises (SMEs) have become a vital success factor. This study adopts the resource-based view of the firm to explore the complicated relationships among digital HR practices, digital transformation, innovative work behavior, disruptive innovation, and work productivity in the context of Chinese SMEs. Methods: This study provides fundamental insights by drawing data from Jiangsu province, China. Data from 339 managerial staff members were collected and analyzed using SmartPLS (4.0) with a partial least squares structural equation model (PLS-SEM). Several measures, model fit, and hypothesis tests were conducted. Findings: Digital HR practices significantly affect digital transformation, innovative work behavior, and productivity. Furthermore, digital transformation is a powerful driver that positively influences innovative work behavior and productivity in SMEs. Interestingly, innovative work behavior positively influenced work productivity, exemplifying the vital role of inspired thinking and problem-solving abilities. This study also investigates the moderating role of disruptive innovation, highlighting its influence on the association between digital HR practices and digital transformation. However, disruptive innovation does not significantly moderate the association between digital transformation and innovative work behavior, suggesting fascinating nuances for SMEs. Conclusion/value: This research extends our understanding of the interaction between digitalization, HR, and innovation, and proposes practical implications for SMEs aiming to harness the transformative potential of digitization. Several theoretical and practical implications are developed for future studies on related SMEs.