It is widely acknowledged that nowadays Human Resource Management (HRM) is reflected in the mirror of change and innovation peculiar to the organizational environment. There can be no doubt in the assumption that innovation provoking changes is one of the main objectives of contemporary business practices. An extensive body of literature is dedicated to studying the underlying problem from different perspectives. Therefore, it can be easily illustrated that the manifestation of innovation and change is closely tied up with globalization processes, cultural environment, and is actually affected by HRM practices.
Contemporary research concentrates on the primary factors that profoundly contribute to the innovation and change. Changes produced by innovation can be viewed from both perspectives including organizational outcomes and challenges for the HR managers. The purpose of this report is to review current literature and analyze the existing links between management and innovation, which are marked with certain ambivalence. In order to demonstrate this problem to the full extent, it is reasonable to refer to some of the future trends of HRM, and employee training in particular. Nevertheless, the report also enlarges upon the factors that create a positive sense of innovation and ensure positive understanding of the changes. It is no longer a surprise that innovation and change are greatly influenced by the employees’ potential and creativity. Although there are a tremendous variety of factors that managers should take into account stimulating innovation and coping with changes, they should mostly pay their attention to different types of intelligence, where creativity plays a crucial role.
Innovative companies regardless of the status of other representatives of the industry are looking for the unexpected, enchanting ideas, seeking to achieve a quantum leap. When building strategies, many companies are guided by the matter of competitive advantage, and traditional logic encourages companies to struggle for the market share increase. The logic of these values consists in the organizational aim to achieve a dominant position in the market with the help of a giant leap. Not surprisingly, exceptional value in the eyes of the consumer is achieved mainly by means of innovations.
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The innovations in a broad sense are understood as profitable use of the new forms of technologies, services and products, technical, organizational, and socio-economic decisions of manufacturing, financial, commercial or administrative nature. Creative solutions and innovations not only provide a powerful competitive advantage, but also completely change the market. The underlying changes are usually accepted differently by the employees. It means that there are different responses to the changes, thus affecting HRM practices. Not surprisingly, change management has been an object of the contemporary research. The reasons for underlying management issues encompass the organizational need in changes that would contribute to the companies’ outcomes and competitiveness. It is necessary to point out that innovations are profoundly connected with the future of HRM, as they challenge its practices and contribute to the development of the company’s potential at substantially new levels.
Undoubtedly, innovation has been widely researched all over the world owing the effects it produces on the organizations. The most striking question that appears in the contemporary studies is related to the factors that may contribute to the innovative culture, meaning the culture which is fraught with workable imaginative solutions and new products corresponding to the market’s needs. Substantially, researchers explore the issue of innovation in the light of the triggers that may foster its long-term effects. Heated debates are dedicated to the influence of intelligence on creativity and their synthesis in innovations. In addition, conflicting views also exist and portray different factors as crucial in terms of the underlying issue.
Delineating the value of the articles, dealing with innovation, attention should primarily be paid to the studies that have empirical background, as priority should always be given to the practical examination of the problem. Recent findings suggest that the positive nature of innovations is usually the result of the teamwork. Malhotra and Majchrzak (2014) have conducted a research which explores the notion of innovation challenges, relating them to management of the teamwork. In the activities of the team, oriented on thinking and knowledge, innovators work producing the greatest effects. These are the people who perform complex tasks and find unique solutions to fulfill them. Such employees establish useful contacts and external team members are informed of the existing ideas that may lead to future achievements. According to the researchers, “challenge means that the solutions proposed by the crowd provide new strategies and alternatives that can help the company differentiate itself from the competitors” (Malhotra & Majchrzak 2014, p. 103). This research may generally be supported by the one carried out by Shen et al. (2009), which dwells upon the importance of diversity at the workplace. Shen et al. (2009) state that “a diverse workforce has a better-quality solution to brainstorming tasks, displays more cooperative behavior, relative to homogenous groups, and can raise organizational efﬁciency, effectiveness and proﬁtability” (Shen et al. 2009, p. 236). It is clear that organizational profitability depends on innovation. These studies have both theoretical and practical value. Respectively, the theoretical background is reflected in the literature review. Not surprisingly, the literature review serves as a background for the practitioners and researchers in conducting their studies due to the significant practical implications that it possesses. For this reason, it can be easily assumed that innovation is affected by the teamwork. However, the team itself should include members marked with any kind of diversity, be it cultural, racial, ethnic, age, etc. This idea may be backed up by the credible research of Leung et al.’s (2008) concerning multicultural environment at the workplace. The researchers apply both theoretical exploration and data, respectively bringing into focus creative cognition approach and practical findings. Leung et al. (2008) demonstrate that “when an individual is immersed in and exposed to only one culture, the learned routines and conventional knowledge of that culture may limit his or her creative conceptual expansion” (p. 172). In turn, the lack of creativity may influence the innovative potential of the company.
In addition, contemporary research demonstrates that innovation is directly connected with the high levels of creativity and intelligence. However, the priority is given rather to creativity than to the IQ level. Jauk et al. (2013) determine the particular threshold, supporting an argument that consists in the assumption that intelligence influences creativity only by twenty percent. Companies can spend a lot of money on the introduction of new technologies, conducting thorough market research, but if their efforts are not supported by each employee and their understanding of their role in this innovative process, expected level of performance will not be reached. The extent to which ideas are implemented quickly and effectively depends largely on the personnel, willingness and ability to apply these innovative measures. Unlike traditional approaches, HR managers of contemporary enterprises must intensify innovation behavior of staff and create conditions for professional and creative development, thus applying progressive approaches to motivation. Undoubtedly, the study of Jauk et al. (2013) is marked with a variety of weaknesses. Although their findings suggest the threshold for connection between intelligence and creativity, they are too ambiguous, as the researchers fail to make the right conclusions concerning management practices. In the process of recruitment, managers may select employees with high IQ levels. However, they may not turn to be creative.
It is quite reasonable to start with a research that portrays the apparent links between HRM and innovation. Since there are many issues surrounding this problem, the ambivalence between the above-mentioned objects of research should be taken into account. The study of Alharthey et al. (2013) makes a key statement that is one of the most important ones in this report: “current HRM practices are largely impacted or changed according to innovation culture” (p. 60). In turn, Chiu and Fogel (2014) support the idea that “managers are a critical factor for influencing employee attitudes and behavior for adoption of innovations” (p. 185). It can be easily assumed that HRM practices exert a tremendous impact on the company’s innovation and changes. The question which arises in this particular context is what managers can do to ensure the innovative progress of the company and its contribution to the innovative culture. In reality, HR managers are mediators that may help the stuff achieve a desired effect. There is a study connected with the things that managers can do. Jimenez-Jimenez and Sanz-Valle (2008) dwell upon the importance of HRM in its connection to innovation. The researchers admit that The underlying HRM system positively associated with organizational innovation includes the flexible job design and empowerment, team working, long-term and skill-oriented staffing, extensive-and long-term oriented training, broad career opportunities, behaviour-based appraisal, and organic compensation system. (Jimenez-Jimenez & Sanz-Valle 2008, p. 1211)
Evidently, the study has a strong empirical background, as it is particularly based on the analysis of the links between HRM and innovation in 173 Spanish firms. Therefore, one may notice that innovation bares direct links to HRM practices investigating the practical side of the underlying issue. Although the study is invaluable because of its upright portrayal of what managers should do, there is still a mistake that should be taken into account. The matter is that Jimenez-Jimenez and Sanz-Valle (2008) describe an ideal HR system, which challenges the point of innovation and the following question is called forward: Is innovation possible only in organizations where HRM works perfectly? Unfortunately, the research lacks any suggestions as for this point. In general, scientists emphasize that the motivation of staff to increase innovation in the enterprise has its own characteristics, and indicate the basic need for the development of an appropriate mechanism as a tool for motivation resulting in the promotion of innovative behavior of the employees.
It is worth mentioning the fact that innovation and change management performs certain functions. Thus, functions which reflect the content of innovation management include prediction, planning, coordination, stimulation, and control or monitoring. The above-mentioned features outline substantive areas of management activities, each focusing on solving specific issues and various interactions between different departments of the company, requiring the implementation of a large number of specific measures. Prediction, or forecasting, should be addressed primarily, as it seems to be the main function. Innovation management aims at developing forecasts of scientific and technological character in the long term. In this context, a forecast is understood as a scientifically informed opinion on possible changes of techno-economic, technological, and social nature of the company as a whole and its individual parts. Forecast is a summary of findings of empirical data and reasonable assumptions about the directions of future development. Forecasting in terms of innovation is in many respects an alternative to ensure the competitive advantage in future. For the projection of the future conditions, it is necessary to study the research patterns and trends of society, science and technology, social needs and technical possibilities of the industry, businesses and economic activities.
Now that the report has come to the significance of managers in the company’s contribution to the innovative culture, it is reasonable to mention a few of the future trends of HRM. Noe (2010) in his book concerning employee training puts an emphasis on the future of HRM. The researcher pays assiduous attention to the description of the possible changes that are likely to occur because of the innovations. Not surprisingly, the main part of his speculations on the issue is dedicated to the introduction of new technologies at the workplace and the need in sharing intellectual capital among less experienced employees and more proficient ones. Although Noe’s (2010) book reflects only upon employee training and development, it is necessary to point out that elaborating specific training modules is another step to continue increasing motivation. The practical value of the book consists in the fact that the author provides the potential reader with the real experience of the companies that underwent the changes. His main message is related to training employees for sustainability. Noe’s (2010) interpretation of the problem only emphasizes the importance of HRM in operating the potential changes. However, William W. Fisher III and Felix Oberholzer-Gee (2013) state that “There is no one best way to manage IP [intellectual property] and many managers overestimate the attractiveness of using IP to exert market power” (p. 157). Presumably, the research should be conducted in order to find out whether the distribution of intellectual property increases the chances for innovation.
In turn, the empirical research conducted by Castillo-Rojas et al. (2012) sheds light on the hypothesis that multiple management system standards serve as a hindrance to innovation. The underlying study is particularly interesting due to the reason that it makes a contribution to the research by means of finding the potential danger that may decrease innovation. In this case, multiple management system standards constitute a considerable threat to innovation. According to Castillo-Rojas et al. (2012), “[…] the more the organizations had been pushed by their external stakeholders to implement these standards, the more prevalent is the perception that MSSs are a barrier to innovation” (p. 1085). The authors of the research also conclude that Specialized Management System dealing with innovation decreases the potential threat.
Apparently, at the beginning of 21st century management has changed its overall paradigm. Nowadays, the staff is seen as a major resource and determining factor of success of the organization. At the same time, researchers pay assiduous attention to strategic management. Moreover, contemporary scientists consider innovation strategy as a key factor in the competitive advantage and efficiency of production as well as new forms of its organization. Therefore, innovation is marked with the growing role of intangible factors, including education, skills, qualifications, labor skills, motivation, health, and personal qualities of workers that determine the quality of human capital. The innovative potential largely depends on human capital, as it is a driving force for both production and innovation processes. This is due to the fact that employees are both creators of inventions, patents and know-how, and the creators of innovative potential as well as the most important element in its implementation, change processes, development of new products and services, and methods of customer service among others. Therefore, the availability of appropriate human capital as subject and object is an important prerequisite for innovation and implementation of innovative strategies.
Bearing in mind the previous points, one should have noticed that the main focus of personnel management accountable for innovation-oriented enterprises should be put on developing creative, innovative qualities of the staff, and constantly taking advantage of the results concerning creative activity of the employees. Employees should be seen as the intellectual capital of the organization, remuneration system and incentives based on the basis of competence, innovation, intellectual labor, staff loyalty, etc., and differentiated depending on the values of these parameters. Innovation-oriented enterprises should particularly pay attention to the issue of staff development, including its continuing professional education and training that will be used in future potential to build intellectual capital of the enterprise on the whole. No less important role belongs to an effective motivational system. Thus, the strategy of innovation personnel management should involve the formation of a complex long-term approach to the management of staff who should perform with high efficiency and represent the company’s employment potential. HR managers identify and attract talents, giving priority criterion to assessing the professional competence and its promotion, creating the conditions for their work. The presence of the highly qualified personnel and the efficiency of its certification, training and motivation are the key to the implementation of innovative enterprise strategy.
Thus, one may conclude that at this stage of socio-economic development, the competitive advantage is the greatest change due to innovation, which in turn is derived from gains in work associated with the generation of ideas and new information. Based on this ability to find new employees and its expression in specific products and services it is today’s essential prerequisite of high competitiveness for most workers and businesses in general. Reconciliation of strategy and policy with HRM should be based on an individual approach to each employee, determining the scope and nature of activities where the work of a particular employee brings forward the greatest effect, obtaining results leading to the evaluation of business opportunities. HRM is responsible for encouraging creativity, innovation, invention, as crucial directions of the formation and development of innovative capacity. This, in turn, will contribute to high-performance management and innovation-oriented enterprises, improving the efficiency of a company as a whole.
The report has shown that innovation is largely influenced by the cooperation between human resource managers and employees who tend to bring more effective results as long as a certain point of diversity is preserved within an organization. The labor of management innovators requires creativity, diverse knowledge, orientation towards analytical work and the ability to concentrate on a certain time-defined problems. Since the main subject of labor is the management of scientific and technical information, the prerequisite for its effective operation is the knowledge of modern scientific paradigm related to informational technology, ethical, environmental and social problems. As for the employees, they should work in teams to achieve the desired effects in terms of innovation. HR managers should make sure that the team plays different roles that are both creative and intelligent and respectively conform to presenting innovative ideas and implementing them in practice. The underlying literature review has also shown that innovations presuppose different changes at the workplace that should be properly treated by the managers. One of the essential ways to increase innovation is to ensure that the employees in a certain organization possess knowledge of different cultures that may enrich the company’s potential by means of increasing the chances for innovation. Therefore, one may easily conclude that innovation and change management faces different challenges both from managers’ and employee’s perspectives. Evidently, innovation may be stimulated by HR managers by means of applying different factors mentioned in the underlying report, including cultural intelligence and creativity from the employee’s perspective and forecasting in the context of HRM.
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