The Concept of HRM and Innovation, Using Lessons from the Worlds Most Innovative Firms - Essay Example

Examine And Analyze the Concept of HRM and Innovation, Using Lessons from the World’s Most Innovative Firms to Support Your Study INTRODUCTION Human Resource Management (HRM) is a process that incorporates practices to manage employees in an organization. HRM is a set of management practices that have a significant role in defining the relationship between employees and organization, and in functional areas such as staffing, selection, performance appraisal including compensation, training and development and job designing. In addition to these, HRM is also involved in more strategic functions such as human resource planning and forecasting. HRM is considered as “both art and science”, art because it requires skills to manage people in directing them for creative and innovative tasks. It is stated as a science as it requires appropriate and constant application of the theory in practices for greater efficiency (Jackson 1-20). The present era of competition and rapidly changing world, has made innovation a significant factor, which is critical for every business organization its success and sustainability. The organizations with more innovation capability are performing well in the present economy and innovation has become a benchmark on which the success of an organization is assessed. The relation between HRM and innovation has been studied from various possible approaches and it has been evaluated that the HRM has a significant relation with innovation both directly and indirectly. It is has been found that the impact of the HRM practices on employees have created immense opportunities for innovations. THESIS STATEMENT Toyota Motor Corporation is one such organization that takes into consideration the HRM practices and innovation for greater market share. Thus, to obtain a better understanding of the stated issue, this thesis aims to evaluate the concept of HRM and Innovation. ROLE OF HRM HRM is a system, which generally comprises of specific practice that stimulates innovation. The empirical studies also have recognized that HRM influences and supports activities, which facilities innovation such as intellectual development, knowledge expansion and development of new products. It has been identified that the HRM plays a crucial role in motivating innovation in organization, as it increases individual creativity, enhances knowledge sharing between the employees and shapes their skills and behaviors for better performance and greater innovations for the success of the organization (Karlsson 1-64). The roles and objectives of HRM in an organization is indeed very vast and it comprises all the aspects of employees from the time they enter into an organization till the time they leave. The general objective of HRM is to ensure the availability of skilled workforce for an organization. The concept of HRM is associated with activities such as getting skilled manpower, preparing them, stimulating them through training and development and sustaining them in the organization (Ali 78-87). Human Resource Planning is a crucial role of HRM, which meets the requirement of skilled workforce of an organization and ensures to supply the organization with appropriately skilled work force to match the job. The concept of HRM is to provide the right person at the right place for increasing the effectiveness of the business in the global changing market environment. Similarly, another role, job design helps in structuring the organization, authority and responsibility for maintaining a disciplined flow of information. Jon design defines the contents of work of each position of an organization. As per the concept, staffing in HRM is involved in the process of recruiting and selecting staff and matching their expectations with the job. This aspect is the most vital role of the HRM as it directly affects the business process and its functionalities in large. Selection of skilled employees is the need of every organization and hence recruitment is regarded as a crucial aspect, which is linked with innovation. Acquiring new talents with new ideas and freshness helps in providing a strong skilled workforce, which is an innovative strategy of HRM (Dergisi 181-188). Furthermore, the training and development activity of HRM aims at providing knowledge and skill based training to the employees, which not only enhances the current performances but also meets the future needs of organization. The concept of HRM is wide and also focuses on compensation and benefits aspect, which is related with wages and compensation of employees as per the performance. It also includes performance appraisal through incentives and pay offs. These policies assist in motivating employees for better outcomes and enhanced profitability for organization. Additionally, organizational development in HRM aims at establishing a healthy relationship amid individuals and groups for better services and increase in productivity (Dergisi 181-188). In modern organizational framework, the concept of HRM is more effective and vital. Organizations have realized the importance of employees, in acquiring the goals. In this regard, in the present scenario the strategic importance of HRM has been recognized in both the business and academic organizations that includes finding appropriate skilled and motivated workforce. The HRM module is being used as a powerful management tool for attracting employees, training them and motivating them to meet the organizational objectives and augment employee engagement. In this context, it can be stated that effective HRM leads to greater innovation strategies to enhance the performance of the organization for maximum profitability (Jorgensen, Becker and Karen 451-463). HRM AND INNOVATION IN TOYOTA HRM is one of the important factors for the success of business organization. It provide a clear vision for the organization and helps realise the opportunity accessible. The HRM assists in exploiting the full potential of the workforce without which, the valuable resource would be wasted. Through its assessment tools, the recruitment and selection process organizations are able to acquire the right talent, which is the key factor for an organizational efficiency and growth (Ali 78-87). For instance, Toyota Motor Corporation too has a strong and effective HRM polices. Toyota Motor Corporation is the one of the leading automobile industry. The success of Toyota is due to its efficiency in selecting talents, which is the effect of its sound HRM policies. The Toyota Motor Corporation through its HRM module differentiates between the applicants and selects the right person for the right job considering the skills required for the job. This helps in increasing the effectiveness and profitability of the organization in the global platform (Toyota Motor Corporation, “Guiding Principles at Toyota”). Toyota Motor Corporation is one of the innovative organizations, which takes various initiatives to meet the changing demands of the customers with quality and at the same time take adequate steps for the welfare of employees. It offers training and development programs through its HRM policies, which increases the performance of the employees and in turn makes the organization more efficient. Toyota Motor Corporation also develops and improves its HRM strategies constantly because they believe that the HRM is the base, which helps in enhancing the organizational capacity and enables the organization to keep up with the pace of the current challenges. HRM plays a strong role in managing the people and achieving the goals of the organization. The profit of a company depends on the effectiveness of human resource at large (Toyota Motor Corporation, “Guiding Principles at Toyota”). The HRM activities include the development and training programs of employees in the organization, which enhances their work along with personal growth within an organization. The training and development programmer of HRM has proved to be beneficial for organizations around the world. The training programs for the employees helps in enhancing productivity of both the organization and employees, which is crucial in the present competitive economy (Dergisi 181-188). The Toyota administration believes that learning is essential for the efficiency of organization and so they are always committed to training and developing its employees in every level. It also provides employees with opportunities to pursue higher education and specialization in their respective fields so that the employees can grow in the organization and have a strong career path. This is a motivational concept that is followed in HRM. Toyota Motor Corporation has also developed comprehensive policies, which enables the transferring and reassigning of employees in the various branches all around the world, which provides employees a global platform to better understand the culture and environment of different places. This strategy is innovative in nature for the development of the organization (Toyota Motor Corporation, “Guiding Principles at Toyota”). Toyota Motor Corporation also provides their employees with good working environment along with various career opportunities. It provides employees with attractive incentive packages, which motivates to provide creative ideas and productivity within employees. Today, Toyota is the leader of innovations in automobile industry, which is the product of its sound HRM policies regarding incentives and remunerations. HRM considers protection of workers as an important aspect. It attempts in reducing workplace risks by being more responsive to concerns of workplace including health and safety measures and also frames a recovery plan in case of accidents. This is a motivational aspect for employees as they feel valued. Moreover, this helps organizations in sustaining healthy employees, which is beneficial for the organization. The Toyota Motor Corporation is concerned with security issues of its employees and has implemented various measures to enhance the safety of the employees at work place. They provide their employees and families with additional benefits of medical treatments. Toyota is concerned with the physical and psychological well-being of its employees because they strongly believe that healthy employees lead to better quality and effective contribution to the organization (Toyota Motor Corporation, “Guiding Principles at Toyota”). HRM AND INNOVATION The role of HRM in the global context includes the development of policies, which are designed to make optimal use of the human resources of an organization, by establishing healthy relationship within the members of organization and augmenting maximum personal development. Managers and the HR professionals are experiencing the necessity of HRM for innovation strategy for the success of organization. HRM has helped the managers in overcoming the global challenges and enhancing the diversity programs. Diversity in the organization leads to various challenges and hence becomes difficult to manage. These unique diverse perspectives if understood can be an important source of learning and organizational growth (Tan and Nasurdin 155-167). The HRM policies supports, the process of developing enhanced intercultural communication and relationship between the different HR groups of an organization and binds them as a single team rather than multiple systems, which lay the foundation for the positive change in organization (Adams 1-26).The constant development of new technology in the modern world and the international competition has insisted many organizations to search for new ideas, creativity and innovations in order to improve their current processing systems, products and technology required for the sustainability in the current economy. The proper aligned HRM practices can play a crucial role in innovation by identifying the opportunities through proper management of the organizational knowledge. The HRM practice through knowledge management encourages employees to share and generate knowledge within their scope of experiences, which influences the organizational innovation with profit. The postulate that effective HRM practices, which include performance appraisal, training and development, knowledge management have a significant positive relationship in influencing the organizational innovation such as product, process innovation and many others (Tan and Nasurdin 155-167). Skilled human resource helps the organization to achieve its objectives and gain a competitive advantage over others. The HRM practices have a significant role in motivating employees in presenting sound attitudes and behavior, which is very important for an organization while implementing various strategies. Many theories have demonstrated that motivated employees are likely to perform better, which leads to organizational efficiency. Organizations require creative and innovative employees who are flexible, tolerant and responsible in introducing product innovation and services, new process and administrative practices for its success. It is therefore important for organizations to implement supportive HRM practices, which motivate employees and help them to harness these qualities (Wang 20-40). HRM practices are found to be positively related to innovation. For instance, performance appraisal increases employee job satisfaction, which in return motivates employees for greater performance and innovation. Similarly, career management and development support employees to accomplish their career objectives, which also increase their satisfaction. Furthermore, training helps employees to develop their skills, master knowledge and this contributes towards innovation in daily operations in terms of product, process and management practices. It also increases the efficiency of the employees, which lead to higher innovations. Incentives, rewards, promotion and recognition motivate employees to take greater risks, generate new ideas and contribute to organizational innovation with more active participation of the employees in innovative tasks. HRM activity of recruitment includes obtaining competent candidates and selection of right candidate for the right job for better organizational efficiency and higher level of innovation. Thus, it can be stated that HRM linked with innovation leads to greater effectiveness for the business to maximize its profit and market share (Paauwe, 1-20). CONCLUSION Human Resource management practices have a significant relationship with organizational innovation. The implementation of effective HRM practices lead to the increase of innovative strategies for an organization. Organizations are implementing HRM as crucial aspect in increasing productivity, which is important to sustain itself in the modern competition. The effective management of the human resource with implementation of suitable HRM practices leads to organizational efficiency and higher level of innovations. The need for innovation has become an important factor for its survival. It is innovation, which decides the faith of organization in the competitive environment. New innovations help companies accelerate their performance and to achieve competitive advantages. The current technologies, processes, products and services are being constantly replaced by new and better technologies. It is crucial that organizations constantly innovate to keep with the pace of the changing environment. HRM practices can help organizations to motivate its employees for higher innovations in order to fulfil organizational goal. Thus, it can be comprehended that HRM have a significant influence on innovating ability of an organization. Works Cited Adams, Karlyn. “The Sources of innovation and creativity.” National Centre on Education and Economy (2006): 1-26. Print. Ali, Akbar. “Significance of Human Resource Management in Organizations.” International Refereed Research Journal (2013): 78-87. Print. Dergisi, Uluslararası. “Evolving Terms of Human Resource Management and Development.” The Journal of International Social Research (2009): 181-188. Print. “Guiding Principles at Toyota.” Toyota Motor Corporation. 2012. Web. 3 Sep. 2014. Jackson, Terence. International HRM: A Cross-Cultural Approach.UK: SAGE, 2002. Print. Jorgensen, Frances, Becker, Karen, Matthews, Judy. “Human Resource Management and Innovation”. HRM and Innovation (2009): 451-463. Print. Karlsson, Jennie. “The Role of HRM in Innovation Processes”. Nurturing or Constraining Creativity (2013): 1-64.Print. Paauwe, Jaap. HRM and Performance: Achieving Long-term Viability. UK: Oxford University Press, 2004. Print. Tan, Cheng, Ling and Nasurdin, Aizzat, Mohd. “Human Resource Management Practices and Organizational Innovation: Assessing the Mediating Role of Knowledge Management Effectiveness.” Electronic Journal of Knowledge Management (2011): 155-167. Print Wang, Zhongming. Technology Innovation and HRM. UK: Emerald Group Publishing, 2005. Print. Read More