EXPLAINING THE LINK BETWEEN HUMAN RESOURCE
PRACTICES AND INNOVATION PERFORMANCE:
THE ROLE OF ORGANIZATIONAL LEARNING PROCESSES*
Paper submitted to the OLKC 2011 Conference, 12-14 April, Hull, UK
KEY WORDS: Human resource practices, innovation, performance, organizational
learning, learning processes.
Victor Oltra**
victor.oltra@uv.es
Department of Management ‘Juan José Renau Piqueras’
University of Valencia, Spain
Joaquin Alegre
joaquin.alegre@uv.es
Department of Management ‘Juan José Renau Piqueras’
University of Valencia, Spain
ABSTRACT
This theoretical paper makes a preliminary attempt to integrate the – so far usually
disconnected – literatures on: (i) linking human resource (HR) practices and innovation
performance, (ii) assessing organizational learning (capability) (OL/C), (iii) linking HR
practices and OL(C), or (iv) linking OL(C) and innovation. We clearly distinguish
between policy-based variables (a system of innovation-triggering HR practices) and
processual, mediating ones of a behavioural nature (a system of knowledge-optimizing
OL processes), all of them eventually impacting on innovation performance (composed
by innovation efficacy and innovation efficiency). The proposed framework is expected
to facilitate further (theoretical and empirical) research into the HR-OL-innovation
connections.
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* Acknowledgement. The authors would like to thank the Spanish Ministry of Science
and Innovation (ECO2008-00729) for their financial support for this research.
** Corresponding author:
Victor Oltra
Department of Management ‘Juan José Renau Piqueras’
Facultat d’Economia
Universitat de València
Av. Tarongers, s/n
46022 Valencia, Spain
V. Oltra and J. Alegre HR practices, innovation and learning – OLKC 2011
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1. INTRODUCTION
Abundant research shows substantial evidence on the positive link between human
resource (HR) practices and organizational performance (e.g. Datta et al., 2005; Delery
and Doty 1996; Huselid 1995). Hence, it seems natural to assume that the impact of
(high-commitment, contingent, strategic…) HR practices on innovation performance
ought to be also positive. Such a specific link has also been explored (e.g. Beugelsdijk,
2008; Jiménez-Jiménez and Sanz-Valle, 2008; Shipton et al., 2006a; Walsworth and
Verma, 2007): innovation-triggering HR practices would include employee
empowerment, task rotation, employment security or the use of participative decision
making systems, among others. However, satisfactory consensus and insight have not
been reached on: (i) the choice of innovation-triggering HR practices, (ii) their ultimate
impact on innovation outcomes, and (iii) the underlying processes and mediating
variables that would help explain how such a link is developed – similar to what
happens with the broader HR-performance literature (cf. Boselie et al., 2005; Wall and
Wood, 2005; Wood, 1999).
The aim of this theoretical paper is twofold: (i) to deepen into the connections between
HR practices and innovation performance, and (ii) to shed light on the underlying
processes and mediating variables that explain these connections. Having these
concerns in mind, organizational learning (OL) can be easily linked to innovation
outcomes and, more specifically, to the process dynamics that foster them. Innovation,
as the culmination of the complex interplay between multiple – individual and
collective – learning processes aimed at finding new ways of solving problems, depends
on the company’s capability to learn – i.e. to develop, distribute and use new knowledge
(McKee, 1992; Wheelwright and Clark, 1992).
Furthermore, Hult et al. (2004) observed that, if a firm is to be innovative, management
must devise organizational features that embody a clear learning orientation. Some
cultural factors, such as decentralization in decision making, error tolerance, or social
relations, have been shown to affect knowledge and innovation outcomes through OL
(Chang, 2003; Lemon and Sahota, 2004). Interestingly, Chiva et al. (2007) measured
OL capability (OLC) by understanding it as a multidimensional concept, including
experimentation, risk taking, interaction with the external environment, dialogue and
participative decision making – essential enablers of the OL dynamics. Indeed, research
evidence places OLC as a relevant predictor of innovation performance (Alegre and
Chiva, 2008). Moreover, Scarbrough (2003) explored how connections between HR
management (HRM) and knowledge management (KM) processes, if neglected, pose
strong barriers to successful innovation. Jiménez-Jiménez and Sanz-Valle (2007)
studied the complex relationships among HR practices, KM and technical innovation.
More recently, Chen and Huang (2009) have highlighted the role of ‘KM capacity’ in
linking strategic HR practices with innovation performance.
In this paper, a number of related concepts such as learning orientation, OLC or KM
(capacity) inspire our proposal of ‘OL processes’ as the fundamental mediati