HRM innovativeness: measures and antecedents

Abstract

The last twenty years, research has proved the importance of people for the financial performance of organizations and the opportunity they provide for a company to develop a unique competitive advantage. Moreover, the ability of an organization to attract, recruit, retain and develop executives capable of contributing to corporate success faster and more effectively than market competition, depends, to a large extent, upon the Human Resource Management practices implemented by this organization. However, despite the acknowledged significance of product and process innovation in company perfomance, there has been little research done in the field of Human Resource management innovation, and no theory exists that differentiates more innovative from less innovative organizations. This thesis comes in to cover this big gap and proposes a new explanatory framework for the phenomenon of innovativeness, by analysing the causal relationships of the determinants of the different dimensions of HRM innovativeness. Firstly, the hypotheses form an original model of HRM innovativeness, which comprises the simultaneous influence of three sets of variables (internal environment, external environment and personal characteristics) on the construct of innovativeness. Then, the thesis, in order to test this model, proposes the measurement of the complex phenomenon of innovativeness with four, distinct but interrelated dimensions: the number of adopted HRM innovations, the speed of their adoption, the radicalness of the adopted innovations and the attitude of the HRM department towards innovation. Our research and theoretical framework formulation is partly based on the synthesis of the literature on organizational innovation and HRM practices and partly based on empirical quantitative research conducted in a sample of 185 national and multinational companies in diverse industries, with a workforce of more than a hundred employees. We gathered the data by means of two structured questionnaires (one including questions on the use of HR practices and the other including more general questions on company strategy, the external market environment and the competition) that were addressed to the HR Director and the Marketing or Sales Director, respectively, through personal face to face interviews. For the statistical analysis of data we used initially descriptive statistics methodologies, t-tests, chi-square tests and correlations, and subsequently multiple regression and Structural Equation Modeling. The data analysis offers a series of interesting findings. Initially, we confirmed the multidimensionality of the HRM innovativeness construct and we attempted to support the relationships among the four dimensions. Specifically, the confirmed relationships are: the positive influence of the attitude of the HR department towards innovation on the radicalness and the number of adopted innovations, the positive influence of the radicalness of innovations on the number of innovations, and the positive impact of the number of innovations adopted on the speed of innovation adoption. Moreover, we identify and support the importance of three sets of latent factors for the determination of HRM innovativeness. In particular, we support the impact of factors of the external environment (such as frequency of changes, heterogeneity and hostility) and the internal environment (such as company size, the relationships of management and unions), as well as the impact of personal characteristics of the HR Director (such as his innovative personality and professionalism) and characteristics of the CEO (such as his innovative spirit and his tenure in the company). Finally, we measured the innovativeness of the sample companies and we identified the characteristics of the most innovative ones, and the specific HR practices they use.