Human Resource Management Practices And Organizational Innovation: An Empirical Study In Malaysia

Abstract

<p class="MsoNormal" style="line-height: normal; text-indent: 0in; margin: 0in 0.5in 0pt;"><span style="font-size: x-small;"><span style="font-family: Times New Roman;"><span style="color: black; mso-themecolor: text1;">With rapid globalization, firms particularly those in the manufacturing sector have to<strong style="mso-bidi-font-weight: normal;"> </strong>continuously innovate for competitive advantage. <span style="mso-spacerun: yes;"> </span>One way to do so is via effective human resource management practices (thereafter termed as HRM). <span style="mso-spacerun: yes;"> </span>The purpose of this study is to examine the relationship between human resource management (HRM) practices and organizational innovation. <span style="mso-spacerun: yes;"> </span>We employed a cross-sectional design with a sample comprised of<strong style="mso-bidi-font-weight: normal;"> </strong></span><span style="color: black; mso-ansi-language: EN-GB; mso-themecolor: text1;" lang="EN-GB">674 large manufacturing companies from six states in Malaysia which were identified as </span><span style="color: black; mso-themecolor: text1;">having a high percentage of innovating companies (Ministry of Science, Technology and Innovation, Malaysia (MOSTI), 2006). <span style="mso-spacerun: yes;"> </span>Our independent variables comprised of </span><span style="color: black; mso-ansi-language: EN-GB; mso-themecolor: text1;" lang="EN-GB">five HRM practices (performance appraisal, career management, training, reward system, and recruitment). <span style="mso-spacerun: yes;"> </span>Three types of organizational innovation (product innovation, process innovation, and administrative innovation) served as our dependent variables. <span style="mso-spacerun: yes;"> </span></span><span style="letter-spacing: -0.05pt; color: black; mso-themecolor: text1;">Our findings provided partial support for our main hypothesis. <span style="mso-spacerun: yes;"> </span>Training alone was found to have a positive and significant effect bon the three forms of organizational innovation. <span style="mso-spacerun: yes;"> </span>In addition, performance appraisal positively and significantly affects administrative innovation. <span style="mso-spacerun: yes;"> </span></span><span style="color: black; mso-bidi-font-weight: bold; mso-themecolor: text1;">Despite the fact that our research framework was partially supported, our study highlights the profound role played by training in stimulating organizational innovation in the context of the manufacturing industry of Malaysia. <span style="mso-spacerun: yes;"> </span>I<span style="letter-spacing: -0.05pt;">mplications of our findings and limitations of the research were discussed. </span></span></span></span></p>