HUMAN RESOURCES MANAGEMENT
Organisations (irrespective of their size) create the framework in which individuals and/or groups engage in innovation, and human resource management (HRM) practices exert considerable influence on resourcing, incentivising, developing, managing and rewarding innovation practice. Indeed, companies can create competitive advantage through innovation and creativity through deploying effective human resource management (HRM) strategies spanning human resource planning, performance appraisal, reward systems, and career management dimensions.

In terms of human resource planning, innovating enterprises are initially tasked with creating and staffing teams with the right skill-mix of individuals. Central features transcending team building for innovation is collaboration, and encompasses dynamics such as size, goals, cross-functionality, social ties, communication and proximity in terms of forming, growing and sustaining teams. In terms of performance appraisal, organisations engaging or seeking to engage in innovation expect their employees to take risks and pursue innovations to create profitable ventures. For management teams, this may involve encouraging divergent thinking, open debate, prioritising innovation and change versus stability and tolerating failure as a learning experience.

With reference to reward systems, management teams are tasked with providing employees with a combination of incentives and rewards to stimulate and motivate innovation behaviours and actions. A vast repertoire of incentives and reward options are available for engaging and motivating employees with reference to innovation projects. These range from but are not limited to: providing staff with the time and resources and buffering them from extraneous demands to think and explore in the early phases of creative problem solving/ idea generation. Turning to rewards, motivational factors can be classified as extrinsic (bonuses, pay increases, awards, and career and promotion advancement) and intrinsic (altruism, community-related, firm-related, fun and enjoyment, object and task, individual connectivity issues) categories. A theme emerging from the literature is that a combination of extrinsic and intrinsic measures are increasingly representing best practice as concentrating solely on extrinsic mechanisms can result in merely rewarding the outcome as opposed to the process of engaging in and embedding innovation practices and behaviours.


Mindful that employees do not operate within a vacuum, (Mumford, 2000) recognises that HRM practices need to incorporate and integrate individual, group, organisational and environmental spheres, and as such proffers a series of propositions (Table 1) for managing the people dimension in the context of innovation.

Table 1 Summary of HRM Propositions

The Individual

1. Select for breadth and depth of expertise and skill in working with expertise

2. Provide incentives for ongoing knowledge development

3. Define job expectations in teams of broad core duties

4. Allow discretion in structuring work activities

5. Periodically review work progress

6. Tailor performance objectives to creative elements of the work

7. Evaluate progress in work, not work outcomes

8. Provide a mix of rewards based on progress towards objectives

9. Collaboratively define work context

10. Provide training in defining work context

11. Establish procedures that maximize self-selection

12. Provide coherent developmental programs

The Group

1. Select leaders based on management skills as well as expertise

2. Provide managers with training in managing creative enterprises

3. Provide multiple career tracks for advancement

4. Orient work group planning around projects and project development

5. Allow individuals to develop and maintain a mix of projects

6. Use smaller explanatory projects as a basis for development

7. Encourage diversity in project assignments

8. Conduct climate surveys examining this climate for creativity

9. Provide training in the nature and management of innovation

10. Provide team training focus on collaboration and innovation

11. Insure awards and recognition are consistent with climate and collaboration requirements

The Organization

1. Develop rotational assignment programs

2. Help prepare staff to support development and implementation

3. Provide group interaction consulting

4. Provide training in strategic sales briefings

5. Implement policies that emphasize professional growth and development

6. Promote high performance workplace policies

7. Develop recruitment policies that emphasize growth and innovation

8. Conduct innovation audits

The Environment

1. Assess the implications of strategic changes for expertise requirements

2. Monitor work force capabilities and expertise

3. Actively pursue strategic hires

Source: (Mumford, 2000)


Human resources management (HRM) needs to support innovation at two levels (De Leede & Looise, 2005):
1) At an organizational level in terms of building an innovative organisation
2) At the level of specific innovation stages, activities or projects

Organizational level
At the organizational level, five key elements exist to nurture innovation (Cormican & O’Sullivan, 2004):

  • Strategy and leadership: Innovation needs to become integrated more into the strategic-management agenda of senior leaders. In that way, innovation can be not only encouraged but also managed, tracked, and measured as a core element in a company’s growth aspirations. (Barsh, Capozzi, & Davidson, 2008)
  • Culture and climate: Organizational culture and leadership are inextricably intertwined. Without senior leaders encouraging innovation, there will be no innovative culture and climate. Culture can be described as the values, norms, and beliefs of an organizations. Climate then refers to the policies, practices, and procedures in place. Both of them are shaped by senior management. Examples are supporting innovation at every opportunity, rewarding and recognizing innovators and successful development teams, and welcoming ideas from all employees. (Cooper, 2000)
  • Planning and selection: The selection of ideas to pursue (portfolio management) as well as the planning of projects (project planning) are often important guiding beacons for fellow workers. The selection and prioritisation of innovation projects will incline employees to pay more attention to innovation.
  • Structure and performance: While performance is often measured in financial terms, some advocate a strategic competitiveness assessment to form the basis of organisational performance measurement, including the determination of innovation strategies and aligning specific innovation goals with performance-evaluation systems for members of the organisation. (Cohn, 2013). In terms of reward systems, management teams are tasked with providing employees with a combination of incentives and rewards to stimulate and motivate innovation behaviours and actions. A vast repertoire of incentives and reward options are available for engaging and motivating employees with reference to innovation projects. These range from but are not limited to: providing staff with the time and resources and buffering them from extraneous demands to think and explore in the early phases of creative problem solving/ idea generation. (Nohari & Gulati, 1996). A theme emerging from practice is that a combination of extrinsic (e.g. pay increase) and intrinsic (e.g. fun) measures are increasingly representing best practice as concentrating solely on extrinsic mechanisms can result in merely rewarding the outcome as opposed to the process of engaging in and embedding innovation practices and behaviours. (Nelson, 1995), (Fiore, 2006), (Manso, 2011), (Barros & Lazzarini, 2012), (Yanadori & Cui, 2013).
  • Communication and collaboration: Collaboration is often highlighted as a main driver for innovation. If negative group effects (e.g. leading to consensus and convergent thinking) are overcome, collaboration can be central to innovation because of associations between ideas that result in an innovative combination. Second, collaborative feedback speeds up the innovation process. A third advantage of collaboration is that more connections are present to push the idea forward. Fourth, it is easier to overcome resistance as a team, than doing this as a lone ranger, and finally collaborations reach the implementation phase easier, because the work can be dived and they can be supportive to each other. (Dance, 2008). Collaboration thus encompasses dynamics such as size, goals, cross-functionality, social ties, communication and proximity in terms of forming, growing and sustaining teams.

Specific innovation stage level

It is appropriate to note that different management approaches might be required at different stages in the innovation process (Van der Meer, 2007):

  • In the ideation and conceptualization stage, the task of management is to create a climate favourable to innovation through the use of the cultural approach
  • In the elaboration stage, management should establish the correct enabling mechanism to nurture the projects
  • In the exploitation stage, management should follow a classical approach: planning, action, and control.

 


BIBLIOGRAPHY

Barros, H. M., & Lazzarini, S. G. (2012). Do Organizational Incentives Spur Innovation? Brazilian Administration Review, 9(3), 308-328.
Boyatzis, R. E., Esteves, M. B., & Spencer, L. M. (1992). Entrepreneurial Innovation in Pharmaceutical Research and Development. Human Resource Planning, 15(4), 15-29.
Cohn, S. (2013). A Firm-Level Innovation Management Framework and Assessment Tool for Increasing Competitiveness. Technology innovation management review, 6-15.
Cooper, R. G. (2000). Perspective: The innovation dilemma: How to innovate when the market is mature.
Cormican, K., & O’Sullivan, D. (2004). uditing Best Practice for Effective Product Innovation Management. Technovation, 819-829.
Dance, J. (2008, September 27). 5 Reasons why collaboration contributes to innovation. Opgehaald van 5 Reasons why collaboration contributes to innovation
Fiore, M. (2006). Incentivizing Innovation: Training Staff to Take Risks. Folio, 21.
Manso, G. (2011). Motivating Innovation. The Journal of Finance, 66(5), 1823-1860.
Mumford, M. (2000). Managing Creative People: Strategies and Tactics for Innovation. Human Resource Management Review, 10(3), 313-351.
Nelson, B. (1995). Motivating Employees with Informal Awards. Management Accounting, 77(5), 30-34.
Nohari, K., & Gulati, S. (1996). Is slack Good or Bad for Innovation? Academy of Management Journal, 39, 799-825.
Van der Meer, H. (2007). Open innovation - The Dutch Treat: challenges in thinking in business models. Creativity and Innovation Management, 16(2), 192-202.
Yanadori, Y., & Cui, V. (2013). Creating Incentives for Innovation? The relationship between pay dispersion in R&D groups and firm innovation performance. Strategic Management Journal, 34(12), 1502-1511.

 

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