Effects of human resources management on the manufacturing firm performance: Sustainable development approach

Sustainability is a necessity in today's business since long-term development cannot be achieved without embracing it. The fourth industrial revolution (i.e., Industry 4.0) that introduced the digital transformation of companies is pushing the industry towards sustainable development. Human resource management (HRM), as part of the Industry 4.0 concept, plays an essential role in the process of digital transformation, since employees represent the most flexible part of the production system. This paper aims to analyze the relationship between the implementation of HRM practices and the introduction of digital technologies in manufacturing firms. Additionally, the authors intend to determine whether the introduction of digital technologies enables the flexibility of the production system. For this purpose, data gathered through the European Manufacturing Survey (EMS) are used. The analyses are based on descriptive statistics and regression analysis. The results reveal that there is a significant positive relationship between the use of HRM practices and the implementation of digital technologies in manufacturing firms. Furthermore, firms that implemented digital technologies have a tendency to organize their production processes in a way that corresponds to trends in production imposed by the Industry 4.0 concept.