Developing a Culture for Innovation : What is the Role of the HR System?

Abstract

Research on Human Resource Management and innovation has to date relied on a theoretical assumption that there exists an identifiable set of HR practices which 
\norganisations seeking to be innovative should adopt. However, analysis of the various prescriptions of HR practices for innovation reveals a high level of internal 
\ninconsistency, leading to conflicting advice for practitioners. Furthermore, a review of empirical research on the topic indicates that HR practices within innovative organisations are remarkably similar to those found in the best practice literature This raises questions about the link between strategy and HRM, and about the theoretical foundations of research on HRM and innovation. Drawing on recent research on HRM and firm performance, we suggest that research on HRM and 
\ninnovation can benefit from incorporating elements from both contingency theory and best practice approaches into the existing configuration theory approach. A change in direction for both theoretical and empirical research on HRM and innovation is proposed. 
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\nWhat type of HR system is most appropriate for a firm wishing to pursue a strategy of innovation? This question has attracted attention from researchers since the early 
\n1980s. In fact, it can be argued that this stream of research predated by as much as a decade a much wider interest in the links between HRM and organisational 
\nperformance which Guest (1997, p. 263) argues is now “the dominant research issue in the field (of HRM)”. Interest in the topic of innovation is also growing rapidly. 
\nGlobal dissemination of information via technology has ensured that competitive advantage based on a particular product or process is no longer sustainable. In the 
\ninformation age, sustainable competitive advantage belongs to those firms who continually reinvent themselves at a pace which is consistent with the rapid pace of change in the environment. The result is that the pressure on firms to innovate in order to survive is greater than ever before (see, for example, Tushman & O’ Reilly, 1997). These parallel developments in HRM research and the broader business environment ensure that both academic and practitioner interest in the topic of HR systems for innovation is likely to grow. The question of how research on this topic should proceed is therefore an important one, and is the subject of this paper.