Order Now

Critically Discuss the Relationships between Human Resource Practices and Innovation in Organization

Introduction. In the current essay I would like to critically discuss the relationships between human resource practices and innovation in organization. To begin with, it should be noted that the sphere of human resources (HR) covers the issue of work transferring of employees or associates of the organization. The main functions of HR department in any organization are identifying, recruiting, training, hiring and retaining employees in the organization. The basic objective, pursued by the Human Resources function with these tasks is to align HR policies with the organization’s strategy, which will implement the strategy through people.

Usually the HR function consists of areas such as recruitment and selection, hiring, training, induction and retention of staff in the company. Depending on the company or institution where the HR function operates, there may be other groups that perform different responsibilities they may have to do with issues such as administration of employee payroll or managing relations with trade unions and others. In order of effective implementation of the organization’s strategy, there is need to concentrate on Human Resources management, for which it should consider concepts such as organizational communication, leadership, teamwork, negotiation and organizational culture, according to Chung-Ming Lau (2009).

It should be noted that organization’s development, as a rule, is processed by mastering a variety of innovations. These innovations may affect all areas of the organization. Moreover, any sufficiently serious innovation in one area of activity, usually require immediate changes in the related areas, and sometimes the overall restructuring of the organizational structures of management. Innovations may include technical, organizational, economic and administrative changes that are different from existing practices in the organization. They can be used in other organizations, but for those organizations in which they have not developed yet, their implementation is complex and time consuming process often leads to considerable difficulties. As a fact, organizations have different susceptibility to innovate. Also, capacity for innovation and receptivity strongly depend on the parameters of institutional management, skill-composition, industrial personnel, and external business environment and other factors.

Innovations are, on the one hand, contrary to all conservative, aimed at preserving the status quo, on the other hand – at focus within the strategy changes, a significant increase in the technical and economic efficiency of the organization. In other words, innovation – is an elementary component of the business, is always inherent in a market economy. It can be said that areas of innovation include products (types, quality) materials, the means of production, technological processes, the human factor (personal development), social sector (the change of behavior of employees of the organization), and organizational development of organizations. Product innovation is divided into manufactured by the initiative of producers and buyers. At the heart of the innovation process is always the initiative of the manufacturer. Moreover, innovation involves the creation of inventions and introduces innovations in the production process, according to Frances Jorgensen (2009).

However, innovations and their implementation seem to be rather risky. The degree of risk in the implementation of various innovations is different. Innovations for partial modernization of equipment and production technology, upgrade products, lower production costs and increase the material interest of team members from work associated with low risk and announced the mandatory conditions of steady improvement in production efficiency. Significantly greater risk is the introduction of fundamentally new science and technology, significantly changing the technical base of production and organization management. These include not only the fundamental developments in the field of engineering and technology, but also new organizational and economic solutions. Innovative capacity of organizations is largely predetermined by the diversity and degree of industrial-technological unity of their components. The more active role is played by organizations in the reproductive process and the greater degree of integration of their core industries – the higher is the innovation potential. Also, very important factor is receptivity of innovation. Susceptibility of organizations to innovate is reduced with increase in production and development of organizational structures, predominance of large-scale and types of mass production. The greater the volume of production, higher levels of output, the harder it is amenable to restructuring of production. The greatest susceptibility to the innovations is small highly focused organization. They are specialized to meet specific customer needs and possess the ability to flexibly tune depending on the nature and pace of industrial development. Their organizational structures of management are the most mobile and responsive to modern scientific and technological developments, organizational and economic innovations, according to Reinhard Lund (2006).

Implementation of technical, organizational and economic innovation requires adequate changes in the existing forms and methods of management. Implementation requires continuous management innovation. The latter becomes increasingly important condition for improving organizational effectiveness. In modern economics, all the technical changes are discussed in the form of new products and more efficient technologies. The introduction of new products act as a reliable means of ensuring a competitive advantage, establish best prices and changes in market share in its favor. The growth of the mass of profits based on product innovation opposes lowering profit margins. In turn, technological innovations have a direct impact on cost savings and increased profits, but have no direct effect, such as sales. The latter may increase when combined with technological innovation activities in the field of marketing.

The combined impact on the structure of innovation in industry economic conditions has led to the preservation of preferred orientation to upgrade products in the last decade. This is also targeting the current system of economic incentives. Lag the technology also reduces the efficiency of production of new types of products, as well as the production technology is often no time to realize the full benefits of new design solutions. In general, this has led to the situation, when industry has a low level of production and lack the necessary material and technical prerequisites for significant increase of competitiveness in the global market. Very often, the need for innovation is born from within the organization. In practice there are situations where the company itself becomes both developers and users of innovative technologies. Innovation stimulates an increase in demand for products and increasing sales volume, as well as the ability to raise prices on some types of resources. Changes in technology can sometimes open new opportunities for product innovation, according to Ana Castel (2009).

Quite often, the organization introduces innovations and then distributes them on a commercial basis to other organizations. Their rate of spread (diffusion) depends on the relative investment needs and the effectiveness of each innovation. In this case, the greater number of organizations have used this innovation, the greater the loss of those organizations which have been used. It also speeds up the process of distribution. The positive effect of the introduction of innovative technologies is obvious. This is usually rapid and substantial increase in labor productivity, which has significant commercial effect, the high proportion of growth of productivity. All of this is due to improvements in technological processes. Given that technological innovation are reducing production costs and subsequently prices, the greatest benefit from these innovations get producers owning a higher share of market sales. The most important prerequisite for accelerating innovation and improving their scientific and technological level are rapidly evolving computer technology. Development and implementation of innovation is becoming a major focus of the organization’s strategy, since it determines many of the directions of its development.

Implementation of innovation policy in general, involves operations such as: developing plans and programs for innovation, overseeing the development of innovation and its implementation, review of project design innovation, holding a single innovation policy, coordination of innovation activities in the functional and production divisions, providing financial and logistical and technical resources, software development innovation with qualified personnel, create temporary task force to comprehensively address the innovation challenges – from goal before the introduction of innovations. To date, many large organizations have created so-called scientific-technical complexes, which allow the development and introduction of innovative technologies in production, according to Constantine Kontoghiorghes (2008).

Analyzing the global experience, in my opinion, our country should expect that during the rise of U.S. economy will start to show a tendency to reorient the direction of scientific and technical production and sales activities in an innovative policy of industrial organizations as well as the time required to create new generations of high technology products, design and implementation processes at the level of international standards. Innovative activity is an organic part of the marketing activities of the organization, in particular, this applies to organizations engaged in the production of high-tech products. Here, there is particularly close interaction between engineering units with the marketing department. In this regard, it includes the following objectives of innovation: the search for new technical solutions – the creation of the invention, research and technological development, technological preparation of production of new products, consolidating production in new markets through constant improvement of technology and competitiveness. The main innovation in the organization’s policy – is the formulation of the main objectives of innovation, the definition of the term of its implementation, evaluation of results in the form of specific, practical goals, shortening the introduction of new products. A clear policy on the development of innovation sets the direction of collecting information and making suggestions that lead to persistent search for opportunities and creates incentives for teams. The main objectives of innovation are to minimize production costs and improving quality of technological, organizational and personnel decisions. With implementation of high-new technology the most important are the following results: reduction in the proportion of manual labor and improve working conditions; to ensure continuous and stable production process, reducing unproductive expenditures of time; decrease in labor and materials per unit of output; more efficient use of equipment; diffusion of innovations in other organizations on a commercial basis. Therefore, the creation of necessary and sufficient conditions for the rational organization of the management of innovation in industrial organizations will in general for the organization to increase the competitiveness of production and profitability of its operations, according to Jane Summers, Brett Smith (2010).

In its work, HR department of an organization use planning templates, which are sets of measures, based on the study of information regarding staff and programs and expectations of the organization, tend to determine, from the standpoint of individual and general human needs an industry within a specified time, quantitatively and qualitatively, as well as its cost. As a fact, the planning staff has the following purposes: best usage of resources; collaborate with the company in obtaining benefits; plan strategies and tactics for the cases of business expansion or reduction. The planning staff from a general point of view try to ensure quantitative and qualitative (personal direct and indirect labor, administrative, middle management and executives), personal needs second to the general plans of the company. Also, to ensure not only meant that workers entering some sort at one time, but also reduce staff if that were necessary and inevitable, when the modernization of the tools (technological unemployment) or the non-viability of the company (labor crisis) would necessitate such a measure.

It is essential to note that HR department should be ready not only for hiring the best professionals in different areas, but also explore the possibility of an economic downturn forced to take restrictive measures. Expose the problems that will arise can encourage managers to offset this risk, using appropriate measures (compensation fund, creation of ancillary industries to absorb surplus staff, contact with other companies to meet their human needs with the surplus etc.). The forecasts should cover the whole range of possibilities that may occur. Its flexibility will be taking appropriate steps at all times for every circumstance. Breadth and flexibility are, as two of its essential characteristics. From the individual standpoint, planning involves professional development, human and financial staff, through the promotion based on appropriate training through the study of the skills and potential of each person, allowing their classification in order to the promotion, according to Opening the black box: How staff training and development may affect the innovation of enterprises (2010).

The systematic usage of personal development plan in order to insert formed and promoted in the general plans of the company includes the study of the structure of it as a starting point, study and organizational layout of the medium and long-term, valuation or estimate of the employees, who form the template, i.e. what is called an inventory of human potential substitute or replacement policy, salary planning, training planning and selection and study of the positions work.

It can be said that recruitment is the first question in relation to staff that arises for the company, selection to be given to both the personnel entrance into the company and affect staff admitted to different jobs to be filled. As a rule, the recruitment process include several steps, among them are: determine whether the candidate meets the minimum competencies for the default job; assess the skills for the candidates, who passed the previous stage, through technical and/or psychological assessments; assign a score to the assessment made in the previous section; decide who will be offered the job. Moreover, with the planning process, HR department should take into account the importance of reliability in measuring instruments of the capabilities of potential candidates, such as degrees earned, the careers, interviews, etc. To make the recruitment process, it should be designed various reliable tests where the applicant can demonstrate his abilities. In turn, these instruments must be validated in terms of content knowledge that applicants must have and in terms of practice in the application of content. In this way it should be stressed that it is possible that a selection method is valid if it is not reliable.

Adequate compensation can be considered as another innovation in the human resources management. It should be noted that in comparison with the 80-ies and 90-ies of the XX century appeared new, more attractive way of compensation to employees. Companies have to provide adequate compensation to their employees because they offer their intellect and physical strength to the company, making it more successful. This compensation does not only refer to a wage or salary. It also includes other rewards as incentives to motivate and ensure employee satisfaction and this in turn increases production. Some types of compensation are: bonds; percent return on sales; product discounts; non-monetary benefits and others, depending on the type of company and its policies, according to Human resource strategies in organizations for innovations (2010).

Moreover, one of the main innovations in human resources management is professional and personal training for the staff. As a fact, training in the workplace is essential for company’s productivity. This is the process of acquiring technical knowledge and skills that will improve the performance of employees in their duties.

Good training can bring benefits to organizations to improve their image and relationship with employees, in addition to increasing productivity and product quality. For employees, there are also benefits such as increased job satisfaction and development of sense of achievement. Today, training is one of the best ways to build better employees within the company and significantly improve their performance.

Together with training, nowadays leading companies use coaching. Coaching is a technique that has emerged to improve the performance of employees, working with them in different areas. It methodically develops coaching and people’s skills; improve self-esteem by making people and the performance of the functions and duties of the job. Coaching helps in several ways within the company, including: development of employee skills; identification of performance problems; correction of poor performance; diagnose and improve behavior problems; fosters relations; provides advice; improvement the performance and attitude.

Conclusion. To sum it up I would like to say that nowadays there is a strong connection between human resource practices and innovation in organization. With the aim to be effective, and maximize its profit, organizations should invest in human resources and attract the best specialists in its staff. Without any doubts, the central role in this process has innovations in the human resource practices. Preliminary it includes creating of great working conditions (microclimate in the collective, efficient means of production and so on) and attractive benefits. It should be noted that attractive benefits include not only salary and bonuses, the real innovation in human resource practices is the usage of permanent investment in the professional and personal growth of the personnel by training and coaching, creation of unique growth opportunities to attract professionals in the staff. I am convinced that organizations that invest in their human resources and use innovative approaches in motivation have long-term benefits in comparison with other companies.

 

References

Ana Castel (2009). The relationship between human resources and information and communication technologies. Retrieved May 21, 2011 from http://www.scielo.cl/scielo.php?pid=S0718-18762010000100003&script=sci_arttext
Chung-Ming Lau (2009). The HR system, organizational culture, and product innovation. Retrieved May 21, 2011 from http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6VGK-4DDXKGK-2&_user=10&_coverDate=12%2F01%2F2004&_rdoc=1&_fmt=high&_orig=gateway&_origin=gateway&_sort=d&_docanchor=&view=c&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=5ecc94eaa4dbe47e647a8a80f88a5987&searchtype=a
Constantine Kontoghiorghes (2008). Examining the relationship between learning organization characteristics and change adaptation, innovation, and organizational performance. Human Resource Development Quarterly
Volume 16, Issue 2, pages 185–212. Retrieved May 21, 2011 from http://onlinelibrary.wiley.com/doi/10.1002/hrdq.1133/abstract
David M. Herold (2009). What is the relationship between organizational slack and innovation? Retrieved May 21, 2011 from http://www.entrepreneur.com/tradejournals/article/153692838.html
Frances Jorgensen (2009). Human resource management and innovation: what are knowledge-intensive firms doing? Retrieved May 21, 2011 from http://eprints.qut.edu.au/27157/
Human Resource Management Practices and Organizational Innovation (2007). Retrieved May 21, 2011 from http://issuu.com/academic-conferences.org/docs/ejkm-volume9-issue2-article289
Human resource strategies in organizations for innovations (2010). Retrieved May 21, 2011 from http://www.freepatentsonline.com/article/International-Journal-Strategic-Management/252447364.html
Jane Summers, Brett Smith (2010). Communication Skills Handbook: How to Succeed in Written and Oral Communication. John Wiley & Sons Ltd. 143 pages.
Liang-Hung Lin (2011). Electronic human resource management and organizational innovation: the roles of information technology and virtual organizational structure. International Journal of Human Resource Management, Volume 22, Number 2. pp. 235-257.
Marianne Gloet (2007). Exploring the relationship between knowledge management practices and innovation performance. Retrieved May 21, 2011 from http://www.emeraldinsight.com/journals.htm?articleid=851047&show=html
Nai-Wen Chi (2010). A Double-Edged Sword? Exploring the Curvilinear Relationship Between Organizational Tenure Diversity and Team Innovation: The Moderating Role of Team-Oriented HR Practices. Retrieved May 21, 2011 from http://gom.sagepub.com/content/34/6/698.abstract
Opening the black box: How staff training and development may affect the innovation of enterprises (2010). Retrieved May 21, 2011 from http://cogprints.org/6862/
Reinhard Lund (2006). The Flexible Company: Innovation, Work Organization and Human Resource Management. Retrieved May 21, 2011 from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=54245&
R. H. Searle (2010). Supporting Innovation through HR Policy:
Evidence from the UK. Retrieved May 21, 2011 from http://www.alternativeminds.co.uk/Ros1.pdf
Sabri Erdil (2010). The relationships between market orientation, firm innovativeness and innovation performance. Retrieved May 21, 2011 from http://www.gbata.com/docs/jgbat/v1n1/v1n1p4.pdf