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

1
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.

2
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.