Abstract:
This study investigates the impact of strategic innovation on employee performance,
emphasizing the mediating role of job satisfaction within the clothing industry in the
Nuwara Eliya District of Sri Lanka. Strategic innovation has increasingly become a
critical element for sustaining competitiveness, particularly in labor-intensive
industries such as apparel manufacturing. Despite its importance, limited empirical
evidence exists on how strategic innovation practices influence employee outcomes in
developing economies. Addressing this gap, the current study adopts a quantitative
research design using a structured questionnaire administered to 346 employees across
selected clothing companies.
Descriptive analysis revealed high levels of strategic innovation, job satisfaction" and
employee performance. Pearson correlation results indicated a strong, positive, and
statistically significant relationship between strategic innovation and employee
peiformance (r: .591, p < 0.01). Multiple regression analysis confirmed that strategic
innovation significantly predicts employee performance (p : .591, p < 0.001).
Furthermore, job satisfaction was found to mediate the relationship betrveen strategic
innovation and employee performance, as validated through a series of regression
models based on Baron and Kenny's (1986) framework.
The findings support the notion that fostering innovation not only irnproves operational
processes but also enhances employee morale, engagement, and productivity. The study
contributes to both academic literahre and managerial practice by highlighting the
importance of integrating employee-centered innovation strategies. Practical
recommendations are provided for enhancing employee performance through sustained
innovation efforts and satisfaction -driven management policies.
This research extends the understanding of innovation's role in human resource
outcomes and provides a foundation for ftirther studies in different organizational
contexts and sectors. The study also suggests avenues for tuture research to explore
longitudinal effects and additional mediating or moderating variables.
Keywords: Strategic innovation, Employee Performance, Job Satisfaction, Clothing
Industry, Mediation, Sri Lanka
