How humanity-driven innovation practices relate to perceived organizational performance: The moderating effect of organizational identity

As technological advancement accelerates, organizations face an urgent challenge: balancing innovation performance with human values. This study introduces and empirically examines humanity-driven innovation (HDI) – a management approach integrating technological progress with humanistic considerations such as ethics, empathy, and social well-being. While prior research has emphasized technology-driven innovation, limited attention has been given to how human-centered practices influence perceived organizational performance (POP) and how organizational identity (OI) may strengthen this link. Drawing on human-centered design, social identity, and open innovation theories, this study develops and validates a multidimensional HDI framework comprising four dimensions: contextualizing data, affecting the human condition, developing ethical issues, and broadening perspectives. A survey of 215 employees from 115 Taiwanese SMEs adopting HDI practices was analyzed using partial least squares structural equation modeling (PLS-SEM). Results show that HDI significantly enhances POP and that OI positively moderates this relationship, indicating that stronger identification with the organization amplifies HDI’s performance benefits. The findings contribute to innovation management literature by proposing the humanity-identity-performance (HIP) framework, which conceptualizes how humanistic values complement technological innovation to create sustainable value. Managerially, the results suggest that reinforcing organizational identity and integrating ethical and empathetic elements into innovation strategies can improve employee engagement and overall performance. Future research may extend this framework across industries and cultures to verify the generalizability of humanity-driven innovation.