HRM practices, impersonal trust and organizational innovativeness

Abstract

Purpose– Organizational processes that create conditions to facilitate employee innovativeness have become topical due to the constant demand for organizations to renew themselves. Research shows that human resource management (HRM) practices can been used to create such conditions, but also the important complementary role of organizational trust has been highlighted in this context. In particular, earlier studies have mostly focused on the concept of interpersonal trust. However, impersonal trust (the individual employee’s expectations about the employer organization’s capability and fairness) has recently been suggested to be an equally or even more relevant facilitator supporting the effect of HRM practices on organizational innovativeness. The paper aims to discuss these issues.Design/methodology/approach– The hypotheses were tested with two large-scale quantitative studies from the forestry and information and communication technology industries in Finland. Structural equation modelling (with LISREL) was used to test hypothesis.Findings– This study shows that effective HRM practices indeed facilitate organizational innovativeness, and that this effect is partially mediated by impersonal trust in the organization. This result contributes to the existing literature and practice of HRM and the management of organizational innovativeness.Research limitations/implications– Future studies could include also interpersonal trust in order to study trust-innovativeness linkage. The study also examined this phenomenon only in Finnish context and this sets some limitations to the generalizability of the results. In addition, single respondents were used to assess all the variables used in the study. Further studies could improve on this by utilizing more objective measures of organizational innovativeness.Practical implications– The results suggest that organizations should pay attention to designing HRM practices so that they facilitate the building of impersonal organizational trust. In order to improve innovativeness through organizational trust, it is crucial to develop an organization-wide HRM system, since practices that are inconsistently used can lead to unwanted or inefficient results. Strategic and managerial actions related to HRM could increase employees’ trust in the organization and subsequent conditions for providing continuously innovative solutions.Originality/value– The authors add to the literature by identifying the connection of HRM practices to contributing to behavioural, process and strategic innovativeness through the mediation of impersonal trust. To the best of the researchers’ knowledge, this is one of few studies and the first systematic large sample study that examines impersonal trust and its relationship between HRM practices and different types of organizational innovativeness.