Micro, Small and Medium Enterprises (MSMEs) play a crucial role in the economic development of India by contributing significantly to employment generation, industrial output, and regional growth. Despite their importance, many MSMEs face performance challenges due to limited managerial capabilities and underdeveloped human resource systems. This study empirically investigates the integrated relationship among entrepreneurial motivation, High-Performance Work Practices (HPWPs), employee outcomes, and organizational performance in selected district-level MSMEs. Using a structured questionnaire, primary data were collected from 250 respondents, including MSME owners/managers and employees. The study employed descriptive statistics, reliability analysis, correlation analysis, and Structural Equation Modeling (SEM) to test the proposed hypotheses. The findings reveal that entrepreneurial motivation significantly influences the adoption of HPWPs. Further, HPWPs positively impact employee outcomes such as job satisfaction, engagement, innovative work behavior, and performance. Employee outcomes were found to significantly enhance organizational performance and partially mediate the relationship between HPWPs and firm performance. Additionally, serial mediation analysis confirms that entrepreneurial motivation indirectly influences organizational performance through HPWPs and employee outcomes. The study contributes to entrepreneurship and strategic human resource management literature by integrating leadership motivation, HR systems, and employee-level mechanisms within the MSME context. The results highlight that sustainable MSME performance depends not only on entrepreneurial drive but also on structured HR practices and empowered employees. The findings offer practical implications for MSME owners, policymakers, and development agencies aiming to strengthen competitiveness and long-term sustainability in emerging economies.
Beeravalli et al. (Thu,) studied this question.