The Effect of SHRM on Firm Performance Mediated by Operating Strategy and Entrepreneurial Orientation

SHRM is the result of management's inclination toward strategic organization when all business functions try to link their work methods and practices with corporate strategy in order to achieve optimal organizational performance. This study aims at the effects of SHRM on Firm Performance mediated by operation strategy and entrepreneurial orientation. The study approach was carried out by collecting data through questionnaires through surveys. The respondents in this research were employees of UMKM in the fields of handicraft, totaling 60 respondents. The data analysis technique uses Partial Least Square (PLS). The results of this study indicate that SHRM has a positive and significant effect on firm performance, entrepreneurial orientation, and firm performance through operation strategy, operation strategy has a positive effect on firm performance, SHRM has a negative and insignificant on firm performance, entrepreneurial orientation. The result of this study have a theoretical contribution for future research and a practical contribution for business people, especially UMKM in order to improve their operational performance orientation has a negative and insignificant effect on firm performance, and SHRM has a negative and insignificant of firm performance through entrepreneurial orientation.