Human Resource Management Practices and Innovation Activities
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Innovation as a key element for development and economic growth is undisputed. In addition to extensive market conditions, the human resources have always been regarded as an important parameter. The strong involvement is the reason why HRM practices as an aspect of human resources are increasingly recognized as an important element for innovation. This paper focuses on the human resource management (HRM) practices and their association with innovation. It is investigated whether it is better to adopt as many practices as possible or whether individual HRM practices are particularly relevant. The human resources are involved in the entire innovation process and are therefore increasingly recognized as an important element for innovation. However, the interaction of HRM practices and innovation is barely considered in both, the HRM and the innovation literature. The results of an Ordered Probit regression show a significantly positive correlation between HRM practices and innovation activities, especially for practices related to payment and communication. Thereby, HRM practices are especially crucial for highly innovative companies. In addition to the positive association of certain HRM groups, differences depending on the strength of the innovation activities can be found. For a more precise description of the complex innovation processes, the description of the innovation activities is based on several innovation related variables. Considering the resulting four types of innovators, the correlation with Pioneers is much stronger than with the less innovative group of Small innovators. In addition, the results for all equations are significantly more negative for Non-Innovators than for Adapters. In addition, an HRM regime using practices of all HRM areas has the highest positive association, but a linear ranking of HRM regimes cannot be found. Hence, the more the merrier does not necessarily apply. Rather, the correct combination of HRM practices seems to be crucial. A perspective for future research is the analysis of this combination as well as potential repercussion effects of innovation activities on the structure of HRM strategies using panel data.
Abstract
Innovation as a key element for development and economic growth is undisputed. In addition to extensive market conditions, the human resources have always been regarded as an important parameter. The strong involvement is the reason why HRM practices as an aspect of human resources are increasingly recognized as an important element for innovation. This paper focuses on the human resource management (HRM) practices and their association with innovation. It is investigated whether it is better to adopt as many practices as possible or whether individual HRM practices are particularly relevant. The human resources are involved in the entire innovation process and are therefore increasingly recognized as an important element for innovation. However, the interaction of HRM practices and innovation is barely considered in both, the HRM and the innovation literature. The results of an Ordered Probit regression show a significantly positive correlation between HRM practices and innovation activities, especially for practices related to payment and communication. Thereby, HRM practices are especially crucial for highly innovative companies. In addition to the positive association of certain HRM groups, differences depending on the strength of the innovation activities can be found. For a more precise description of the complex innovation processes, the description of the innovation activities is based on several innovation related variables. Considering the resulting four types of innovators, the correlation with Pioneers is much stronger than with the less innovative group of Small innovators. In addition, the results for all equations are significantly more negative for Non-Innovators than for Adapters. In addition, an HRM regime using practices of all HRM areas has the highest positive association, but a linear ranking of HRM regimes cannot be found. Hence, the more the merrier does not necessarily apply. Rather, the correct combination of HRM practices seems to be crucial. A perspective for future research is the analysis of this combination as well as potential repercussion effects of innovation activities on the structure of HRM strategies using panel data.
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