Diversity-oriented HR practices, creative and innovative climates, and their impact on sustainable organizational performance

The study relies on the resource-based view to examine diversity-oriented human resource practices (HRP), including transparent communication, team building, inclusive leadership training, and work–life balance. In this regard, the objective is to examine the impact of each dimension on sustainable performance through the climate for creativity and the climate for innovation. Moreover, a quantitative study based on the survey of 514 employees of Pakistani manufacturing small and medium-sized enterprises, using multiwave and multistage sampling, including purposive sampling to select the organization and random sampling to collect the data, employs partial least squares structural equation modeling. The results indicate that diversity-oriented HRP play an important role in enhancing economic, social, and environmental performance by shaping the climate for innovation and creativity. They contributed to the literature on sustainable performance and diversity-oriented HRP, suggesting that stakeholders promote transparent communication, team building, inclusive leadership training, and work–life balance to enhance economic, social, and environmental performance through creativity and innovation. Moreover, organizations must formulate HR policies that address workplace diversity to achieve long-term, sustainable performance.