Role of HRM in Innovation and Difference from Traditional View

Kulwant Kumar Sharma

Introduction

Thomas Edison had once famously remarked that he did not fail but found 10,000 ways of why

a bulb will not work. Freedom to innovate and persevere is the key element of any human

endeavour in any field. However the prevailing traditional view on innovation has been, that

these are the exclusive domains of artists or specifically trained researchers. In modern

knowledge-based economy, knowledge is embedded in the training of human capital and

consequent competency of any innovative firm. Many authors have been attempting to

establish a relationship between the innovative behavior of the firm and the way it manages its

human resources (Holbrook & Hughes, 2003), as both have a bearing on the competitiveness of

a firm. Traditional HR has been progressively replaced with HRM and underlying difference is

the driver of innovation, necessitated by knowledge economy.

HRM and HR

In literature, evolving of this vital discipline has moved from personnel management (PM) of

scientific management era to HR and then on to HRM. PM of 60s is also referred as a closed

system and was the gift of post War massive industrialisation. Blue collar workers were hardly

involved in adding value through innovation and belonged to big organizations (Arrey Mbongaya

Ivo, 2006). These organisations were shop floor driven, highly mechanistic and bureaucratic in

character and approach. The role assigned to employees was maximization of the profit,

product or organisational goals. Managers were mostly concerned with industrial relations and

employees’ welfare. Next step to HR was scaling up in the involvement of employees’ in

organsational affairs. HR is also called semi-open system. It retained the hierarchical structure

and bureaucracy of the closed system. It placed emphasis on managers while considering

employees as groups of people with personal interests and group dynamics. It sought

organisational performance through tasks and control (Arrey Mbongaya Ivo, 2006). The third

management perspective is what we understand as HRM, also called the open system

(Beardwell, Holden, and Claydon, 2004). Smaller organisations have better interaction with the

eco-system around them and with human resource as a central element to the organisation,

participatory culture in evolution; innovation and running of the organisation become a culture.

Therefore HRM according to (Bratton and Gold 2003 cited by Arrey Mbongaya Ivo, 2006) is “a

strategic approach to managing employment relations which emphasizes that leveraging

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people’s capabilities is critical in achieving competitive advantage”. This is the very basis of

creating an innovative organization.

Over a period of time, the practice of HRM moved from hard or hard aspects to soft or human

aspects to further increase employees’ participation. Two models explain this shift in greater

detail. The Harvard model (Beer, Spector, Lawrence, Quin Mills and Walton, 1984) indicated a

strategic map as a guiding tool for all managers and concentrated on the human aspect of

HRM. Innovation needs to be intrinsic in the behaviour of an employee and for that Harvard

model focussed at employee commitment (Wood, 1995) and not control as in other theories.

Another model is the choice model (Analoui, 2002), which is an integrated or holistic model for

HRM. It gave three drivers for formulating HRM policies - the organization or internal structure,

personal commitment and external environment. It is holistic and integrated model that involves

understanding of personal, organisational and environmental factors in the formulation of HRM

policies. Workers are viewed not as a cost but as an investment (Arrey Mbongaya Ivo, 2006).

HRM and Innovation

To be innovative, a product should have no equivalent competition at the time it is introduced,

therefore new to the market This is a customer-based definition of innovation, and it is the

purchasing habits of customers that determine whether an innovation is successful or not.

Survey result brought out that innovative firms are more likely to have some type of training

programs than non-innovative firms (Holbrook, J.A.D. & Hughes, L.P, 2003). One has heard of

Japanese HRM policies and their flair for innovation. Japanese growth is based on HRM

policies that are integrated, flexible, skill-based, treat employees as investments, with value

added orientation and behavioural or environmental aspects (Arrey Mbongaya Ivo, 2006). HRM

brings in the supportive factors for innovation culture. These are the leadership support, culture

of identity with the organisation, reward system and recognition, competition and de-regulation

ate smallest unit level. Work environment also plays an important part in encouraging

innovation, where ability or talent and intrinsic motivation can only be ensured through open

system of management. Finally there has to be process integration of knowledge and HR

management in an organisation to succeed in creating a permanent innovative culture.

Therefore, active HRM policies will leverage employees’ knowledge and competencies for

enhancing competitiveness of an organisation.

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References:

1. Analoui, F. (2002) The changing patterns of HRM pp. 30, Ashgate, UK.

2. Arrey Mbongaya Ivo; Best Perspectives to Human Resource Management; 2006 African Centre for

Community and Development.

3. Beardwell, I., Holden, L. and Claydon, T. (2004) Human Resource Management a Contemporary Approach,

4th edition, Harlow: Prentice Hall.

4. Beer, M., Spector, B., Lawrence, P. R., Mills, D.Q., Walton, R. E. (1984), A Conceptual View of HRM. in

Managing Human Assets. Free Press, New York.

5. Bratton, J., and Gold, J. (2003) Human Resource Management: Theory and Practice, 3rd edition,

Hampshire: Palgrave Macmillan.

6. Guest, E. D. (1990), HR and IR in Storey, J (Ed) Human Resource Management: A critical Text. IT, London

7. Holbrook, J.A.D. & Hughes, L.P.; Innovation and the Management of Human Resources; 2003; Centre for

Policy Research on Science and Technology, Simon Fraser University at Harbor Centre, Vancouver, BC.

8. Wood, S. (1995) ‘The four pillars of HRM: are they connected? ‘, Human Resource Management Journal,

Vol. 5, No.5, pp.49-59.

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