Inevitable knowledge strategy

Purpose The purpose of this paper is to determine the impact of strategic human resource management (HRM) practices and knowledge strategies on the performance of a sample of software companies in India. Design/methodology/approach The sample chosen for this study was software professionals in India; the software companies were chosen based on their listing in the NASSCOM annual report, with financial turnover as the basis for classification. In order to measure the tangible and intangible outcomes, instruments used in this study include financial and non-economic performance. Findings As per the contingency approach, the fit between strategic HRM practices (staffing, general training, specific training, performance appraisal, performance feedback, reward and compensation and employee development) and knowledge strategy dimensions (consolidator, transformer and co-inventor) was observed and the results revealed that the moderation effect has had a positive impact on the firms’ performance. Practical implications Investment in specific developmental programs for high-potential employees and quick learners will make knowledge-intensive firms financially sound in the long run. Through an appropriate reward strategy, employees who are capable of lateral and innovative thinking at work can be engaged in consistently delivering quality projects, which will have a significant positive impact on overall project costs and the financial performance of the firm. Originality/value The proposed model in this study can enhance a firm’s performance, provided the firm adopts a specific knowledge strategy and coherently aligns it with strategic HRM practices to achieve a sustained competitive advantage.