A Literature Review On HRM and Innovation - Taking Stock and Future Directions

The International Journal of Human Resource
Management
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A literature review on HRM and innovation – taking

stock and future directions
Hannele Seeck & Marjo-Riitta Diehl
To cite this article: Hannele Seeck & Marjo-Riitta Diehl (2017) A literature review on HRM and
innovation – taking stock and future directions, The International Journal of Human Resource
Management, 28:6, 913-944, DOI: 10.1080/09585192.2016.1143862
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The International Journal of Human Resource Management, 2017
VOL. 28, NO. 6, 913–944
http://dx.doi.org/10.1080/09585192.2016.1143862
A literature review on HRM and innovation – taking stock

and future directions
Hannele Seecka,b and Marjo-Riitta Diehlc
a
Department of Management and Organization, Hanken School of Economics, Helsinki, Finland;
b
Department of Management and Organization, University of Turku, Turku, Finland; cDepartment of
Management and Economics, EBS Business School, Wiesbaden, Germany
ABSTRACT KEYWORDS
This article reviews the growing body of empirical evidence Human resource
(N = 35) on the impact of HRM on innovation that has been management; innovation;
review
published during the past 25 years (1990–2015). Our most
definitive finding concerns the impact of bundled HRM
practices, which can be firmly linked to innovation. The role
of high-commitment practice bundles appears particularly
important. Studies on the various individual practices indicate
that practices that foster employee commitment, loyalty,
learning and intrinsic motivation are conducive to innovation.
Some evidence points to the role of macro- and micro-level
moderators setting boundary conditions (e.g. industry
and strategy) for the HRM–innovation relationship and to
mediators, such as creativity and knowledge management,
as explanatory mechanisms as to why HRM impacts
innovation. We noted a number of insufficiently covered
areas that call for further research. We present four specific
recommendations: (1) different phases of the innovation
process deserve greater attention; (2) the invention of radical
innovation warrants further investigation; (3) measurement of
innovation and HRM should be more consistent; and (4) the
theoretical underpinnings of the relationship between HRM
and innovation should be strengthened. We conclude by
reflecting the ‘black box’ stage between HRM and innovation
through the AMO framework.
Introduction
Notwithstanding the impressive amount of research on innovation, on the one
hand, (see e.g. Anderson, De Dreu, & Nijstad, 2004) and on human resource
management (HRM), on the other hand (see e.g. Becker & Huselid, 1998; Boxall
& Macky, 2009; Macduffie, 1995; for review), our knowledge base regarding the
relationship between HRM and innovation has developed slowly (De Leede &
CONTACT Hannele Seeck h.seeck@lse.ac.uk

© 2016 Informa UK Limited, trading as Taylor & Francis Group
914 H. Seeck and M.-R. Diehl
Looise, 2005; Laursen & Foss, 2014). This is despite the fact that the first theoretical
models integrating HRM and innovation were presented 10 years ago (De Leede
& Looise, 2005; Looise & van Riemsdijk, 2004). The past few years, however,
have witnessed the publication of a growing number of empirical studies on this
topic (e.g. Beugelsdijk, 2008; Chen & Huang, 2008; Fu, Flood, Bosak, Morris, &
O’Regan, 2015; Perdomo-Ortiz, González-Benito, & Galende, 2009).
This increase is not surprising given that innovation is related to the mainte-
nance of competitive advantage and performance (Becker & Gerhart, 1996). The
assumption is that an organization’s capacity to innovate resides in its employees’
capabilities and motivation, and that HRM is involved in the whole innovation
process, because employees’ output is needed for the development and implemen-
tation of innovations (Jiménez-Jiménez & Sanz-Valle, 2008). HRM, defined as ‘the
management of work and people towards desired ends, is a fundamental activity
in any organization in which human beings are employed’ (Boxall, Purcell, &
Wright, 2007, p. 1), can be seen as an antecedent of innovation (Gupta & Singhal,
1993). Strategic HRM in turn can be defined as ‘all management decisions and
activities that affect the nature of the relationship between the organization and
its employees – the human resources’ (Beer, Spector, Lawrence, Mills, & Walton,
1984; De Leede & Looise, 2005, p. 109; Wilkinson, Bacon, Redman, & Snell, 2009).
We subscribe to the strategic HRM view, as we are interested in how HRM prac-
tices and systems contribute to innovation. In exploring this we draw parallels
with the HRM – performance linkage. Our study reflects the idea of Lepak and
colleagues (Lepak, Liao, Chung, & Harden, 2006) that the study of HRM systems
should have clearly targeted objectives – such as innovation – instead of generalist
strategy typologies.
Drawing on Guest (1997), Boselie, Dietz, and Boon (2005) and Paauwe and
Boselie (2005) as examples of writings on the HRM – performance linkage, the
aim of this article is to review the growing body of empirical evidence, both quan-
titative and qualitative, of the relationship between HRM and innovation, and to
provide a detailed synthesis of current knowledge, with the aim of identifying
research gaps and proposing a research agenda. We had three specific research
questions in our analysis:
(i) How does HRM, captured specifically as best practices or bundles, affect different
types of innovation?
(ii) What mediating mechanisms in the HRM – innovation relationship have been
identified and examined to date?
(iii) When does HRM influence innovation and what contingency factors have thus
far been examined?
Our contribution lies in the ability to provide an organizing framework for
previous research. In so doing, we hope to advance and encourage theory devel-
opment in the field and guide future empirical research. In the following, we
explain our methodology for identifying the studies for this review. We then
summarize the findings in terms how bundled and ‘best’ HR practices influence
The International Journal of Human Resource Management 915
different types of innovation. After this, we move on to look at the moderators

and mediators included in the studies. We conclude with a brief summary and
identify directions for future research.
Paralleling HRM – performance linkage and HRM – innovation linkage

Existing research on HRM and performance has unanimously demonstrated that
HRM is a significant contributor to organizational performance (e.g. Combs, Liu,
Hall, & Ketchen, 2006; Delaney & Huselid, 1996; Jiang, Lepak, Hu, & Baer, 2012;
Macduffie, 1995), irrespective of whether HRM is approached from the univer-
salistic perspective (the so-called best practice approach) or the configurational
perspective (the application of bundles of interrelated HRM practices) (Boxall &
Purcell, 2003; Delery & Doty, 1996). Theoretically, the linkage from HRM to per-
formance has been explained by a behavioral perspective, whereby HRM affects
organizational performance by influencing and aligning employee behaviors, or by
a human capital perspective or resource-based-view, whereby HRM is primarily
seen to contribute to employee skills, knowledge and abilities, which can be con-
ceptualized as valuable resources unique to the firm (Jiang, Lepak, et al., 2012).
Presently, researchers are moving away from examining whether HRM influences
performance to asking the questions ‘how’ and ‘when’ HRM exerts its influence
(Guest, 2011; Jiang, Lepak, et al., 2012; Paauwe, 2009; Wright & McMahan, 2011).
We believe that the underlying assumption regarding the influence of HRM on
innovation mirrors the above-explained relationship between HRM and perfor-
mance. In other words, innovation can be conceptualized as an HRM-related out-
come, whereby various HRM practices, alone or in bundles, exert their influence
on innovation, possibly through various mediators and depending on different
boundary conditions. Thus, we utilize the best-practice and the bundle approaches
to HRM used in the organizational performance literature (Guest, 2011; Paauwe
& Boselie, 2005) in our analysis. The best-practice approach assumes that a firm
will see improvements in its performance if it implements certain best practices
(Wood, 2000). The bundle approach stems from the assumption that individual
practices should fit together in a complementary manner and be implemented in
bundles (Boxall & Macky, 2009; Boxall & Purcell, 2011; Wood, 2000). Bundled
practices are often associated with supporting employee commitment and involve-
ment, leaning towards the recent emphasis on so-called high-performance and
high-commitment work systems (Boxall & Macky, 2009). Another stream of HRM
literature has, in turn, emphasized the superiority of the contingency approach
to HRM (Becker & Huselid, 1998; Youndt, Snell, Dean Jr., & Lepak, 1996). That
is, HRM practices and configurations need to be consistent and to fit with the
organization’s context, including its organizational strategy (Wood, 2000).
In terms of innovation, we subscribe to the broad definition of West and Farr
(1990), according to which innovation refers to the intentional generation, pro-
motion and realization of new ideas within a work role, group or organization,
in order to benefit the individuals involved, the group or the organization. While
various categorizations of innovation exist (Damanpour & Evan, 1984), typically
a distinction has been made based on the initial focus, i.e. whether the innova-
tion is technological (changes in products, services, production processes) or
administrative (changes in activities, social processes, structures) in its nature
(Damanpour & Evan, 1984). Another distinction often made is between product
and process innovation (Totterdel, Leach, Birdi, Clegg, & Wall, 2002). Product
innovation includes new products and services and often covers those innovations
described as technological. Process innovation refers to new elements introduced
into an organization’s production or service operations, and is more administra-
tive in nature. Researchers also refer to organizational innovations, referring to
the development of new organizational forms or management practices (Boer &
During, 2001). Innovations can also be described with reference to their risk and
novelty: i.e. whether they imply incremental or radical change (Totterdell et al.,
2002). Creativity is central to innovation, but the concepts are not synonymous.
Innovation can be seen as a successful implementation of creativity, which is more
subjective and context specific by its nature (Miron, Erez, & Naveh, 2004) and does
not necessarily imply any economic value for the individuals involved (Anderson
et al., 2004). Therefore, we focus on innovation and employee innovativeness,
rather than on creativity.
Methodology
Identification and overview of reviewed studies
We started by identifying empirical studies that had used an HRM-related inde-
pendent variable and an innovation-related dependent variable, using the elec-
tronic Business Source Complete and Scopus databases, as well as the Social
Sciences Citation Index produced by ISI Web of Knowledge. The search terms we
used included innovation and innovativeness, combined with terms such as human
resource management, HRM and human resources. Due to the international peak
in innovation literature in the 1980s and 1990s (Fagerberg & Verspagen, 2009)
and the interest in the role of HRM in innovation that started to emerge in the
early 1990s (Legge, 1995), we limited our search to the past 25 years, specifically
to the period from January 1990 to December 2015, and focused on articles that
had appeared in English-language, peer-reviewed journals.
We took three steps to ensure that our review would be as exhaustive as possi-
ble. First, we checked the reference lists of the papers that we decided to analyze
more closely. Second, we used creativity as a search term to identify potentially
relevant studies, although we explicitly focused on innovation. Third, to address
the possibility of publication bias, we emailed the members of an established global
network of academics in the field of HR to ask about any unpublished studies on
HR and innovation. This resulted in the identification of one additional study that
Table 1. Overview of HRM and innovation studies (n = 35).

N (%)
Methodology Cross-sectional 30 86
Longitudinal 5 14
Method** Questionnaire/survey 29 90
Secondary data (Database) 3 9
Interviews 4 13
Focus groups 1 3
Observations 1 3
Innovation measurement* Employee innovativeness/innovative work behaviors 5 16
Perceived product/technological innovation 19 59
Perceived administrative/process/organizational innovation 16 50
Perceived innovation strategy 1 3
Estimated probability of innovation/perceived innovation 3 9
Number/share/percent of sales of new products/services 6 19
Radical innovation 1 3
Incremental innovation 1 3
HRM measurement Individual practices 13 37
Bundles of practices 17 48
Both 5 14
Country of origin
China 6 17
Netherlands** 5 14
Spain 5 14
United Kingdom 4 11
Taiwan 3 9
Ireland 3 9
Denmark 2 6
Australia 1 3
Belgium 1 3
Canada 1 3
Germany** 1 3
Hong Kong 1 3
India 1 3
Malaysia 1 3
US 1 3
Moderators* Yes 8 25

Mediators* Yes 13 41
*
These figures report the measurement of HRM and innovation in the quantitative studies (n = 32).
**
Some studied employed multiple methods, and one study had collected data in two countries.
had appeared in the Academy of Management Conferrence Proceedings (AoM)

Proceedings.
As recently noted by Laursen and Foss (2014), the identification of HRM
and innovation studies is not an easy task. Our search focused specifically on
studies that used the best-practice approach or the bundle approach to HRM
in line with the literature on HRM and organizational performance. A similar
approach has also been used previously in HRM and innovation research (see
e.g. Laursen & Foss, 2014). This implies the exclusion of studies that examined,
for example, the effects of employee perceptions of such job characteristics as
autonomy or control on creativity or innovation when the independent varia-
bles were not specifically framed as an HRM practice, or when the authors did
not specifically aim to contribute to HR literature (e.g. Shalley & Gilson, 2004).
While these studies undoubtedly have implications for HRM, they fall beyond
the scope of our review.
We first examined titles and abstracts and selected a pool of studies. Following
our criteria, we finally ended with a sample consisting of 35 studies. We started our
analysis by grouping the studies based on their approach to HRM and innovation
type. We first looked at the way in which HRM was defined and operationalized
– that is, as individual practices or as bundles of practices. We also looked at
whether any moderators or mediators were included. We then focused on the
dependent variable i.e. the innovation-related outcome. In addition, whenever
possible, we separated the studies in accordance with the phase of the innovation
process examined (see Appendix 1). We also specifically noted what the authors
presented as their main contribution to HRM literature and as main areas for
future research (see Appendix 2). Appendices can be downloaded from https://
hanneleseeck.wordpress.com/extras/, due to space limitations.
We then proceeded to examine the studies in greater detail. The summary of
our analysis presented in Table 1 provides several noteworthy observations. First,
most of the studies have been published relatively recently and drew on cross-
sectional designs, typically collecting data by surveying managers at a single point
in time. The second observation concerns the countries of origin of the studies. In
contrast to the majority of the literature on HRM, only one study originated from
the US (Collins & Smith, 2006). The majority were from European countries, led
by the Netherlands (e.g. Beugelsdijk, 2008), Spain (e.g. Cabello-Medina, López-
Cabrales, & Valle-Cabrera, 2011; Camelo-Ordaz, Garcia-Cruz, Sousa-Ginel, &
Valle-Cabrera, 2011) and the UK (e.g. Shipton, Fay, West, Patterson, & Birdi,
2005). In terms of the firm context of studies, many of the studies have focused on
R&D-intensive companies and many fewer on manufacturing- or service-sector
firms (see Appendix 1).
Thirdly, most studies have examined the direct (e.g. De Winne & Sels, 2010;
Jiménez-Jiménez & Sanz-Valle, 2008), rather than indirect (e.g. Wei, Liu, &
Herndon, 2011, see also Fu et al., 2015) relationship between HRM and innova-
tion. In terms of indirect effects, the mediating variables (altogether 13) included
e.g. work engagement and sense of ownership at the individual level, and knowl-
edge management and climate or culture at the organizational level. The moder-
ators (altogether 8) examined included, among others, the strategic orientation of
the company (Perdomo-Ortiz et al., 2009), the level of knowledge-intensiveness
in the industry (Laursen, 2002), internationalization (Walsworth & Verma, 2007)
and organizational culture (Wei et al., 2011).
Another interesting point concerns measurement. While several studies
included two innovation measures (product and administrative), most of the
studies had measured innovation through managers’ evaluations of the organiza-
tion’s ability to produce new products, or its performance in terms of technology
development. Nonetheless, many studies also measured innovation in processes,
services or systems. Some studies also used a percentage of sales derived from new
products or revenue from new products and services as a measure of innovation.

Three studies had looked specifically at the impact of HRM practices or bundles
on innovative behaviors, and two studies had positioned innovative work behavior
in a mediating role between HRM and organizational innovation. Only one study
differentiated between radical and incremental innovations.
We also observed that the HRM measures varied greatly despite our focused
search strategy. Many studies focused on the effects of a number of single prac-
tices, although several studies also operationalized HRM as bundles of practices.
This is consistent with the observation that there is no one fixed list of generally
applicable HR practices or systems that define HRM (Boselie et al., 2005) and with
recent studies of the practices constituting HRM (Posthuma, Campion, Masimova,
& Campion, 2013; Jiang, Lepak, et al., 2012). There is also the recognition that
high-commitment work practices, designed to develop a commitment-driven,
performance-oriented organization are more conducive to innovation than such
traditional practices as internal job ladders with seniority-based advancement
(Godard, 2009; Legge, 1995).
In the following, we summarize the findings of the studies in terms of the direct
effects of HRM on different types of innovation. This is followed by the findings
concerning moderators and mediators included in these studies.
Direct effects: does HRM influence innovation?

The impact of HRM bundles on technological and product innovation
The majority of the reviewed studies focused on the effect of HRM bundles or sys-
tems on technological and product innovation (e.g. Jiménez-Jiménez & Sanz-Valle,
2005, 2008; Lau & Ngo, 2004; Verburg, Den Hartog, & Koopman, 2007; Wang
& Zang, 2005; Wei et al., 2011). Overall, the results are mainly positive, under-
lining the importance of combining complementary HRM-specific resources.
For example, Laursen and Foss (2003) examine the impact of HRM practices on
the probability of introducing a novel product among some 1900 Danish firms.
Summarizing their findings, Laursen and Foss (2003, p. 258) state ‘the application
of HRM practices [in particular in bundles] does matter for the likelihood of a
firm being an innovator, after controlling for sector, size and co-operation with
e.g. universities’. Similarly, in his analysis of Danish firms operating in knowl-
edge-intensive sectors, Laursen (2002) provides support for the complementary
use of HRM practices in the promotion of product innovations. These findings
are broadly supported by Lau and Ngo’s (2004) survey of 332 firms in Hong Kong.
In their longitudinal study, Shipton et al. (2005) in turn demonstrate the positive
impact of sophisticated HRM systems on product innovation. Jiménez-Jiménez
and Sanz-Valle (2008) find, in their study of 174 Spanish firms, that an HRM
system influences every type of innovation. De Winne and Sels (2010) studied the
impact of HRM on innovation as a measure of firm performance in 637 Belgian
start-ups. They found that HRM practices represent an important determinant of

innovation in start-ups and that a broad range of HRM practices is more beneficial
in start-ups with low human capital.
As bundled practices appear to have a positive impact on technological and
product innovation across contexts, what types of practices, then, should be bun-
dled together? The evidence points to the so-called high-commitment practices.
In a study of UK manufacturing companies, Shipton, West, Dawson, Birdi, and
Patterson (2006) highlight the importance of training and skills development
combined with exploratory training in supporting innovation performance, which
was measured through managers’ perceptions of the firm’s product and techni-
cal innovation ability. Similar results are shown by De Saá-Pérez and Díaz-Díaz
(2010) in the context of the Canary Islands and by Fu and colleagues (2015)
among Irish companies representing a range of industries. Jiménez-Jiménez and
Sanz-Valle (2005) argue based on their study of 180 Spanish firms that the use of
internal labor markets and practices that promote loyalty and participation are
more likely to feed every type of innovation. Comparing bureaucratic and flexible
HRM practice bundles, Verburg et al. (2007) demonstrate that HRM practices
that promote commitment rather than compliance are more likely to result in
higher levels of innovative orientation in a company. Wang and Zang (2005), in
turn, contrast what they call a bundle of functional HRM practices with a bun-
dle of strategic HRM practices and conclude that the effect of strategic HRM on
innovation remains particularly strong. Zhou and colleagues (Zhou, Hong, & Liu,
2013) show the positive effects that both commitment-oriented and collabora-
tion-oriented HRM systems have on firm innovation, measured as a firm’s ability
to produce both technological and administrative innovations. The authors argue
that commitment-oriented HRM systems reinforces firms’ internal innovative
capability, while collaboration-oriented HRM systems stimulates innovation by
building social networks with external sources.
Further qualitative evidence indicates that HRM can create an enabling environ-
ment for technological innovation through improvements and changes in working
conditions and through training. For example, Zanko, Badham, Couchman, and
Schubert (2008) discuss the role of HRM in the implementation of technolog-
ical change (concurrent engineering) and how HRM considerations are dealt
with in innovation projects. Their findings indicate that organizational power
plays a central role in determining whether HRM issues are actually addressed or
neglected in innovation projects. Similarly, Bondarouk and Looise (Bondarouk
& Looise, 2005) examine how HRM can support the implementation and use
of IT innovations and ultimately facilitate performance. Their findings point to
the low level of contribution from any HR specialists to the implementation of
IT innovations, yet highlight the important role that customized, user-oriented
learning opportunities play in facilitating innovation.
We noted only two studies that partially challenge the support given to the
HRM bundle-innovation association. According to López-Cabrales, Pérez-Luño,
and Valle-Cabrera (2009), neither knowledge-based nor collaborative HRM prac-

tices have a significant direct effect on innovative activity in the participating R&D
departments of 86 Spanish firms. However, the same study finds that collaborative
HRM practices contribute positively to the development of unique knowledge,
which in turn has a positive relationship with innovation, thereby providing indi-
rect support for the importance of team- and collaboration-orientated practices.
The impact of HRM bundles on administrative and process innovation
Compared with technological and product innovation, we find less evidence of

the impact of HRM on administrative and process innovation. This may be due
to the more intangible nature of these types of innovations and the concurrent
measurement problems. Furthermore, the existing, albeit limited, qualitative stud-
ies of HRM and innovation have tended to focus on administrative and process
innovations.
In terms of quantitative evidence, Shipton and colleagues (2005) fail in their
longitudinal study to establish a relationship between sophisticated HRM systems
and process innovation. This finding stands in contrast to the results of the same
study with regard to technological innovation. In favor of high-performance HRM
bundles, Verburg and colleagues (2007) in turn demonstrate that HRM practices
aimed at promoting commitment rather than compliance are positively associ-
ated with the overall innovative orientation of a company, mixing technological
and administrative aspects. In their study of 173 Spanish firms, Jiménez-Jiménez
and Sanz-Valle (2008) conclude that HRM influences every type of innovation.
Using an innovation measure that combines both technological and administra-
tive innovations, Zhou and colleagues (2013) demonstrated the positive effects
of both commitment-oriented and collaboration-oriented HRM systems on firm
innovation.
The qualitative evidence speaks for the potential of HRM in the promotion
of administrative and process innovations. Bondarouk and Looise (2005) sug-
gest, on the basis of three case studies, that HRM can significantly influence the
implementation of IT innovation but that this potential appears to be largely
under-utilized. Similarly, Hope Hailey (2001) concludes in her qualitative case
study that aligned HR practices help to facilitate organizational change. Yet her
findings highlight the challenges involved in administrative innovation aimed
at transforming people's mental models: this is a long-term, intangible process
requiring a significant allocation of resources and commitment. Another study,
by Zanko and colleagues (2008), highlights the role of HRM in the implemen-
tation of technological change and how HRM considerations are dealt with in
innovation processes. Their findings indicate that organizational power plays
significantly influence whether HRM issues are addressed or neglected in inno-
vation processes.
The impact of best practices on technological and product innovation
We find a degree of consistency in the findings concerning the impact of individ-

ual practices on technological innovation, but also detect some differences. Chen
and Huang (2008) find that technological innovation is predicted by staffing,
participation and performance appraisal. In line with this, Walsworth and Verma
(2007) conclude that, of the practices they studied, employee involvement has the
strongest positive impact on product innovation. Beugelsdijk (2008) finds that
training-, autonomy- and performance-related pay has a positive impact and that
the use of short-term contracts has a negative effect on incremental innovation,
while job rotation and flexible working hours have no effect. Interestingly, of
the HRM practices mentioned, only autonomy and flexible working hours had a
positive effect on radical innovation; the others had none.
The impact of pay on technical innovation appears to be mainly negative. When
contrasting the use of single HRM practices with complementary-bundled HRM
practices, Shipton and her colleagues (2006) find that, while practices such as
training, appraisal and team work promoted product and technical innovation,
contingent pay did not. Interestingly, the effect of contingent pay became signif-
icant when used in combination with other practices that specifically promoted
exploratory learning. In their study of Chinese high-tech firms, Li, Zhao, and
Liu (2006) demonstrate that employee training, non-material incentives and
process-oriented feedback and collaboration have a significant positive effect,
whereas neither material incentives nor fixed or material performance targets
have a significant negative effect on technical innovation. Similarly, Perdomo-
Ortiz and his colleagues (2009) argue in favor of total quality management-based
practices. More specifically, Perdomo-Ortiz et al. (2009) examine the effects of
training, teamwork, extrinsic motivation and autonomous motivation on both
technological and non-technological innovation performance and find that all
these practices have a positive effect on innovative performance. Teamwork espe-
cially appeared to be particularly central to technical innovation.
The results of a study by Jiménez-Jiménez and Sanz-Valle (2005) show very
little support for their hypothesis that HRM practices, in isolation, determine the
degree of firm innovation. Only participation and internal career opportunities
influenced innovation. The findings of Cooke and Saini (2010) in turn indicate that
the HRM practices most used to support innovation-oriented business strategy
were training and development, suggestion schemes, employee recognition awards
and quality initiatives. Jiang, Wang, and Zhao, 2012 show that HRM practices of
hiring and selection, reward, job design and teamwork, are positively related to
employee creativity while training and performance appraisal are not, and that
creativity mediated the positive effect of these HRM practices on technological
innovation. Interestingly, Ling and Nasurdin (2010) examined both product and
administrative innovation and found that only training had a positive and sig-
nificant effect on both.
The impact of best practices on administrative and process innovation
As mentioned earlier, a smaller number of studies have covered administrative

and process innovations than product and technological innovations. Some
observations merit further discussion. Shipton et al. (2005) demonstrate that,
while appraisal systems closely linked to remuneration have a tendency to nega-
tively affect different types of innovations, this is particularly the case with regard
to intangible process innovations. Similarly, Perdomo-Ortiz et al. (2009) note
that autonomous motivation has an especially strong positive effect on non-
technological innovation, and that extrinsic motivation driven by contingent
rewards has the least significant effect on innovative performance. Chen and
Huang (2008), however, find that the strategic practices of staffing, participation
and compensation are positively related to knowledge-management capacity,
which in turn has a positive effect on administrative innovation. In other words,
their findings indicate that, from the perspective of management, compensation
is important for administrative innovation.
Jiang, Wang, et al. (2012) found that hiring and selection, reward, job design
and teamwork are positively related to employee creativity, while training and
performance appraisal are not, and that creativity mediates the relationships
between these practices and administrative and technological innovation. Ling
and Nasurdin (2010) examined both product and administrative innovation. They
found that, of the five HRM practices studied performance appraisal had a positive
and significant effect on administrative innovation, while training had a positive
and significant effect on both. Similarly, Walsworth and Verma (2007), who com-
pared the impact of HRM practices on product and process innovation, conclude
that HRM has a weaker effect on process innovation than on product innovation.
Lin (2011), drawing on a sample of 86 information and electronics companies
in Taiwan, concludes that IT and virtual organization adoptions positively affect
employee creativity and organizational innovation, including administrative and
process innovation.
In their qualitative study of Indian managers, Cooke and Saini (2010) found
that the types of HRM practices adopted to support innovation-oriented business
strategy included learning and development, employee involvement, quality ini-
tiatives, performance management schemas and employee welfare engagement
schemas. According to the managers there was ‘a strong co-relation between the
perceived level of firm innovativeness and the perceived effectiveness of their HR
practices’ (2010, p. 389). The main reasons for this included the implementation of
a range of HR practices that supported each other, good relationships with employ-
ees, employee engagement, employee involvement in decision-making, auton-
omy and empowerment. Similarly, in her qualitative case study of the UK-based
head office of a large multinational company, Hope Hailey (2001) found that HR
practices, including training, appraisal system and performance management,
positively impacted an organization’s ability to innovate.
To summarize, the role of context-specific, high-commitment practice bundles

appears particularly important for fostering innovation of any kind. As Jiménez-
Jiménez and Sanz-Valle (2008) explain, HRM practices are more conducive to
innovation when adopted as a system of mutually reinforcing practices. HRM
practices have to consistently pursue the development of innovation, otherwise
the effect of individual HRM practices can be restrained by some other HRM
practices (see also Laursen, 2002; Laursen & Foss, 2003).
Moderators and mediators: when and how does HRM influence

innovation?
When does HRM influence innovation – the moderators
To date, only limited attention has been paid to potential moderators (n = 8) in
the HRM – innovation relationship. This is surprising given the current popu-
larity of the contingency approach in HRM literature (Wood, 2000). According
to this approach (Becker & Huselid, 1998; Youndt et al., 1996), HRM systems
with internally synergistic practices that match the strategy of the firm and other
contextual factors should outperform both best practices and bundled practices
(Wood, 2000).
Focusing on strategy, Perdomo-Ortiz and his colleagues (2009) fail to find
evidence for the moderating role of a firm’s strategic orientation in their study of
medium-sized and large Spanish industrial firms. In his study, Liao (2006) focuses
on a more micro-orientated moderator and begins by showing that HRM practices
that focus on training and development (input control) enhance product innova-
tion, whereas strictly target- and reward-focused HRM practices (output control)
may even have a negative effect on product innovation. These effects, however,
depend on task characteristics and expectations, suggesting that when a firm has
very clear objectives output control may be recommended. When a higher level
of ambiguity exists, input control is likely to lead to more innovative performance.
These findings indicate the importance of a fit between HRM practices and the
types of tasks employees are expected to carry out.
In terms of industry requirements, Laursen (2002) finds that the application of
HRM bundles is more effective in high and medium knowledge-intensive indus-
tries than it is in low knowledge-intensive industries. In such a context perfor-
mance requirements are more ambiguous and employee inputs and outputs highly
intangible, thus creating a need for HRM to align employee goals and enhance
organizational commitment. It is, however, noteworthy that the effect is found to
be weaker in high knowledge-intensive industries than in medium knowledge-
intensive sectors. Supporting these findings, Laursen and Foss (2003) found that
the impact of HRM practices is stronger in the manufacturing than in the service
sector. They also conclude that the complementarities between HRM practices
play out differently depending on the sector; for example, the ICT sector benefits
from an HRM system characterized by an emphasis on training.
Walsworth and Verma (2007) in turn show that the level of internationalization
matters; in international organizations, training is good for innovation, while
variable pay and employee involvement have less impact than they do in firms
operating only domestically. Cooke and Saini (2010) note that a firm’s internal
and external operational environment can constrain the extent to which it can
or will deploy an HR strategy to promote innovation. They also note that many
firms implement HR initiatives without an understanding of what these are or of
how they should be tied to the firms’ strategic goals. Wei and colleagues (2011)
found that strategic HRM has a strong positive influence on product innovation
especially in firms that have a higher level of developmental culture. This effect is
further enhanced by a flat organizational structure.
Why does HRM influence innovation – the mediators
The existing studies have considered some but rather scattered set of poten-
tial mediators (n = 13) in the HRM – innovation relationship. The study by
Dorenbosch and colleagues (Dorenbosch, van Engen, & Verhagen, 2005) finds
that employees’ perceptions of high-commitment HRM practices measured as
an overall evaluation of a company’s HRM have a positive effect on self-reported
innovative behavior in the context of a large Dutch local government organiza-
tion. This relationship is partially mediated by production ownership, tapping into
perceived ownership for work issues beyond the immediate operational tasks.
Jiang, Wang, et al. (2012) find that employee creativity fully mediated the relation-
ships between certain HRM practices (hiring and selection, reward, job design
and teamwork) and organizational innovation. Fu and colleagues (2015) in turn
show that innovative employee work behaviors mediated the relationship between
HPWS and organizational innovation in the context of professional-service firms.
Alfes and colleagues (2013) established that work engagement mediated perceived
HRM practices and self-reported innovative work behavior in sample of 1153
UK employees.
Chen and Huang (2008) found HRM to influence innovation through its impact
on knowledge management. Specifically, top managers’ perceptions of both man-
agers’ and employees’ knowledge of management-related behaviors mediated the
HRM – innovation relationship. Relatedly, López-Cabrales and colleagues (2009)
highlight the central role of knowledge. In their study, neither knowledge-based
HRM practices nor collaborative HRM practices had a significant direct effect
on innovative activity in the participating R&D departments of 86 Spanish firms.
However, collaborative HRM practices contributed positively to the development
of unique knowledge, which in turn had a positive relationship with innovation,
thereby providing indirect support for knowledge-related mediators. Supporting
learning theory, the results of Chang, Gong, Way, and Jia (2012) in turn show
Moderators: strategy, industry, knowledge-

intensiveness internalization, internal and external
operational environment, organizational culture,
organizational structure, task characteristics
HRM bundles: Innovation: employee
-high commitment innovativeness,
-collaborative technical / product
-knowledge orientated innovation,
-flexibility related administartive/
Mediators: knowledge management,
-professionalism process innovation,
knowledge exchange, creativity, climate
+ additional bundle labels organizational
organizational culture, ownership,
innovation, estimated
absorptive capacity, employee creativity,
probability of
HRM practices: innovative work, behaviours, work
innovation, number of
-training engagement, production ownership
percent of sales of
-learning -related new innovation,
-compensation radical / incremental
-appraisal innovation
-recruitment & hiring
-participation
-autonomy
-rotation
Figure 1. Framework summarizing the reviewed literature.
that flexibility-orientated HRM systems enhance market responsiveness and firm

innovativeness by fostering employee’s core knowledge absorptive capacity. Collins
and Smith (2006) further demonstrate that commitment-based HR practices con-
tribute to organizational social-climate conditions and drive organizational perfor-
mance, including innovation, through their positive impact on knowledge exchange
and social climate related measures of trust, cooperation and shared language.
Lau and Ngo (2004) in turn highlight the role of organizational culture, which
they find to play a mediation role between an HR system and a firm’s innova-
tion related outcomes. In line with this finding, Heffernan, Dundon, Cafferkey,
and Harney (2009) found that various components of high-performance work
practices have different impacts on a firm’s propensity to be innovative through
their impact on the mediating-variable creativity climate. Communication and
involvement emerged as the most significant practice, probably due to its impact
on collaboration and knowledge exchange.
Altogether, our knowledge about the mediating and moderating variables in
the HRM – innovation relationship remains scattered. The variables vary greatly
in terms of their level of analysis: in the case of mediation they vary from individ-
ual-level variables such as work engagement to organizational-level variables such
as culture, and in the case of moderation studies have used contingency variables
both internal (e.g. strategy, climate) and external (e.g. operational environment,
sector) to the organization. These limited and varying approaches highlight the
need to develop more thorough theoretical perspectives to explain the conditions
under which HR can influence innovation. Similarly, parallel to the ongoing dis-
cussion of HR and performance, there is a ‘black box’ between HR and innovation
in terms of our understanding of how HRM influences innovation.
Taking stock and future directions

Overall, we can conclude that HRM influences innovation, but that the research
remains fragmented, in particular with regard to measurement and theoretical
frameworks, thereby allowing for few generalizations. Given the variety of ways to
classify and measure innovation and the various approaches to HRM, the reviewed
studies vary widely in their focus and specificity with respect to the independ-
ent, dependent, mediating and moderating variables. Supporting the growing
literature on complementarities (see Ennen & Richter, 2010), the most definitive
finding concerns the impact of bundled HRM practices, which can be more firmly
linked than individual HRM practices to innovations of different types. The role of
context-specific, high-commitment practice bundles appears particularly impor-
tant. As crisply put by Boxall and Purchell (2011), focusing on high-commitment
work practices takes us away from extensive and contentious selection of ‘best
practices’ and, unlike HPWS, high-commitment work practices do not assume,
unless demonstrated by the specific context, that ‘the particular configuration of
management practices is necessarily performance-enhancing’, (Boxall & Macky,
2009, pp. 7–8 ; Bryson, Forth, & Kirby 2005, p. 460). (See Figure 1.)
Studies on the various individual practices in turn indicate that practices that
foster employee commitment, loyalty, learning and intrinsic motivation are con-
ducive to innovation. At the same time, the evidence cautions against the poten-
tially negative effects of some independently implemented practices, mainly those
related to material incentives and different measures for control and appraisal.
However, when combined with other practices, such as training, the problems
appear to be avoidable, again pointing to the importance of considering the com-
plementarities created by bundled HR practices.
Whilst conducting the review, we noted a number of insufficiently covered areas
and inconsistencies in the literature that align with innovation or HRM literatures
and call for further research. To this end, we present four specific recommenda-
tions: (1) different phases of the innovation process deserve greater attention since
they may benefit from the use of different HRM practices; (2) the invention of
radical innovation warrants further investigation; (3) measurement of innovation
and HRM should be more consistent; and (4) the theoretical underpinnings of
the HRM – innovation relationship should be strengthened.
(1) Different phases of the innovation process deserve more attention: We echo
the notion of Shipton and colleagues (2006) that the role of HRM is likely
to differ depending on the phase of the innovation process. Currently,
this remains a somewhat grey area in empirical research, although the-
oretical models differentiating between the phases have been presented
in the past (De Leede & Looise, 2005; Farr & Tran, 2008). Of the stud-
ies we reviewed, not a single one focused explicitly on different stages
of the innovation process, although a need for this was recognized by
some studies (De Leede & Looise, 2005). Shipton and her colleagues
(2006) acknowledge in their study that the role of HRM in the explora-
tion phase, for example, is likely to be different from in the implementa-
tion phase. Training activities that foster ‘thinking outside the box’ and
encourage risk-taking may be more beneficial at the front end of the
innovation process, which emphasizes employee creativity, while more
structured ways of working are preferable in the implementation phase.
At the idea generation stage, similar practices may be useful in support-
ing radical innovations, including autonomy and flexible working hours
(Beugelsdijk, 2008). At the idea-promotion stage, personal incentives,
such as career development, social rewards, recognition and intrinsic
rewards, could be important in encouraging employees to follow up
and market their ideas to their team and organization. In the final idea
realization and implementation stages, evaluation and feedback from
colleagues, and particularly from clients, may be important motiva-
tors. Whether this is the case and whether organizations take this into
consideration when designing and implementing HR are questions for
future studies.
(2) The invention of radical innovations warrants further attention: The
development of different types of innovation, novel to varying degrees,
may require specific support. As discussed earlier, the studies we
reviewed provide evidence of the differential influence of HRM on pro-
cess vs. product innovation. We were, however, surprised by the limited
attention paid to the distinction between radical and incremental inno-
vations. This warrants further research, as also pointed out by De Saá-
Pérez and Díaz-Díaz (2010), as from the strategic perspective the focus
of HRM can vary significantly depending on whether the organization
is, for example, aiming at radical break-throughs or at incrementally
improving its existing products or services. Interestingly, the findings
of Beugelsdijk (2008) suggest that incremental innovation appears to be
easier for HRM to support in comparison to radical innovation, as a
range of practices was shown to have a positive impact on incremental
innovation. Only autonomy and flexible working hours were found to
influence radical innovation, highlighting the importance of employee
independence. More research is needed on how HRM can support dif-
ferent types of innovation.
(3) Measurement should be more consistent and study design more ambitious:
We noted a high degree of inconsistency in the operationalization of
both HRM and innovation – a concern similar to that expressed in HRM
and performance literature (Guest, 2011; Paauwe, 2009). In the studies
reviewed, HRM measures were frequently developed for the purposes
of the study in question, depending on whether the authors empha-
sized, for example, learning orientation, total quality management, high
commitment or knowledge-intensive context. For example, the HRM
definition and the understanding of ‘best practices’ and HRM systems

varied greatly in the reviewed studies (see Appendix 2), which makes
systematic theory-testing and development challenging. HRM bundles
were studied under various labels, including flexibility and profession-
alism, sophisticated HRM systems and complementary HRM practices.
A more systematic approach to measurement would increase the gener-
alizability of the findings and the chances of publishing more HRM and
innovation studies in top-tier journals. Similarly, in terms of innovation,
a combination of objective (such as share of new products, patents) and
subjective (managerial/employee) measures would be helpful in gaining
a comprehensive view of innovation activities. Overall, more ambitious
study designs are recommended for theory testing and theory devel-
opment. Methodologically, for example, longitudinal and comparative
studies were rare. Longitudinal study designs in particular, such as that
of Shipton and colleagues (2005, 2006), would advance the understand-
ing of the influence of HRM on innovation processes. Additionally,
qualitative studies of HRM and innovation are scarce. The existing
studies (Hope Hailey, 2001; Zanko et al., 2008) demonstrate that qual-
itative studies are particularly insightful in examining processes and
administrative innovations, due to the intangible and complex nature
of such innovations, which can make them less accessible to quantita-
tive researchers. Finally, we regard the relationship between HRM and
innovation as well suited to multi-level analysis, because both concepts
present cross-level phenomena. To date such studies are, however, scant.
(4) The theoretical underpinnings of the HRM – innovation relationship could
be extended: We observed (see Appendix 2) that very few studied drew
upon a specific theoretical framework – a problem similar to that iden-
tified in HRM and performance literature, which typically builds on
theoretical constructs from the human capital or resource-based view
of the firm (Guest, 2011; Paauwe, 2009). Related to these theories, the
reviewed studies used knowledge-management (e.g. Chen & Huang,
2008; Collins & Smith, 2006) and organizational learning (e.g. Shipton
et al., 2005, 2006) as explanatory mechanisms. In order to expand the
scope of this literature and to tap into the underlying mechanisms, we
consider it particularly important to include other theoretically inter-
esting concepts in the study designs. One such example is the AMO
framework that we discuss in greater detail in the following.
Future prospects
Boselie et al. (2005) found, in their review on HRM and performance, that the
AMO framework is used in more than half of all articles published after 2000,
whereas more than half of the papers using strategic contingency theory and
RBV were published before 2000 (Paauwe & Boselie, 2005). Given the present
popularity of the AOM, we conclude by reflecting the ‘black box’ stage between
HRM and innovation using the AMO framework as a lens. We believe that, simi-
larly to the case of HRM – performance linkage (Lepak et al., 2006), the practices
embedded in an HR system affect innovation on multiple levels (Boxall & Macky,
2009; Boxall & Purcell, 2011). The AMO framework (Lepak et al., 2006; Purcell,
Kinnie, Hutchinson, Rayton, & Swart, 2003) suggests that individuals’ abilities
(A), motivation (M) and opportunities to participate (O) provide the explanatory
mechanisms for how HRM influences performance or, as we argue, innovation.
As it is individual employees, either alone or together in groups, who are the
source of creative ideas and subsequent innovation (Anderson et al., 2004), the
individual-level performance theories within HRM, most notably AMO (Lepak
et al., 2006; Purcell et al., 2003), are in our view particularly relevant when trying
to understand the role of HRM in enhancing innovation and innovative perfor-
mance. Similarly to Boxall and Macky (2009), we also see that the individual and
collective levels are inextricably linked because the abilities, opportunities and
motivations of individuals are influenced by the quality of resources, collaboration
and trust of their organizational environment/context, for example in the form
of HR practices.
With respect to abilities, for example above-average skills, knowledge and
general intellect, as well as task-specific skills and knowledge, have been found
to facilitate innovativeness (Taggar, 2002), as has the ability to think creatively,
generate alternatives, engage in divergent thinking and suspend judgment (Shalley
& Gilson, 2004). Domain or task-specific skills in turn reflect an employee's level
of education, training, experience and knowledge within a particular context and
with reference to particular tasks (Shalley, Zhou, & Oldham, 2004). Selection,
training and development are probably most closely linked with ability. However,
performance appraisals, since these focus attention on employees’ development
needs, and compensation systems, since these attract competent people and enable
their retention, are also important (Lepak et al., 2006; Purcell et al., 2003).
Opportunity is enabled autonomy, which has probably received the most atten-
tion in creativity research (Shalley et al., 2004). Opportunity is also enhanced by
involvement and teamwork (West, Hirst, Richter, & Shipton, 2004). For example,
job design (Shalley & Gilson, 2004), workload and time (Amabile et al., 2002)
impact and limit the types of opportunity one has for innovation. Further, innova-
tion research has repeatedly highlighted the importance of intrinsic motivation and
of inner drive in creative work (Collins & Amabile, 1999). Motivation is linked, for
example, to job content, achievability of goals, desirability of rewards and sense
of fairness, and is influenced by performance management and compensation
systems, as well as selection of suitable employees, training and work organization.
However, as a system, all practices are likely to reinforce one another’s effects
on AMO, just as A, M and O are likely to reinforce both one another and one
another’s effects on innovation. Boselie et al. (2005, p. 79). suggest that motivation
is an HR-related mediator and Opportunity and Ability have a more direct influ-
ence on performance. How exactly employees’ ability, motivation and opportunity
channel innovation is an important question for future research.
Limitations
Our study has its limitations, which need to be acknowledged. First, our primary
goal was to integrate prior empirical research results. A logical next step would
be to develop propositions, which was beyond the scope of this paper. Second, as
stated at the beginning of our review, both the HRM and the innovation-related
literatures are rich and complex, and the way we selected and categorized the
studies to be included could be complemented by other ways of classifying the
existing research. We believe, however, that the procedure we selected for this
systematic review was justified and that our methods resulted in the identifica-
tion of a complete set of interesting HRM and innovation studies and reduced
the likelihood of excluding any study containing information that would have
significantly altered our conclusions.
Conclusions
In this article, we have examined the HRM – innovation relationship and have
identified where the potential gaps and inconsistencies in the current research
lie. On the whole, we confirm that HRM practices implemented in bundles
have an overall positive effect on innovation. The effect of independently imple-
mented HRM practices is not, however, clear-cut and may vary depending on,
for example, the industry or the level of internationalization. Contingency fac-
tors and explanatory mechanisms have, however, received limited attention in
the extant literature. We noted the rather fragmented state of HRM and inno-
vation research and identified four key areas for future research, and including
the AMO model. In order to solidify the theoretical understanding of the topic
and to substantiate the existing empirical knowledge base, we call for future
studies to embrace the complexities underlying the relationship between HRM
and innovation.
Acknowledgements
The authors thank the anonymous reviewers and Associate Editor, Paul Boselie, for thor-
ough and useful comments. The authors also thank the presenters and other participants of
Academy of Management Annual Meeting 2013 program session Strategic HR and Creativity
and Innovation for comments. In particular, thanks to session Chair Riki Takeuchi for guid-
ance and encouragement.
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Appendix 1. Overview of HRM innovation studies
3. What are
the direct Which moder-
1.Context: where and how was effects of ators (MO) or What are the effects of
the study conducted and who 2.Measure of innovation 3.HRM practices: Which HRM prac- HRM on mediators (ME) these moderators (MO)
Study were the respondents? used: tices are used in the studies? innovation? are used? or mediators (ME)?
Hope Hailey 2001 Longitudinal case study (includ- Organization’s ability to HR practices including training, *
ing a combination of interviews innovate appraisal system and performance
and survey evidence) in UK-based management
head office of large multinational
company
Laursen (2002) Sample of 726 Danish knowl- Estimated probability of Complementary HR practices + MO: Level of +
edge-intensive firms with more innovation knowledge-inten-
than 50 employees in manufac- siveness
turing and private services
Laursen and Foss Danish survey of 1900 business Estimated probability of Complementary HR practices + MO: complemen-
(2003) firms innovation tarities of HRM
practices and
sector

Lau and Ngo Survey of 332 firms in Hong Kong Perceived firm performance Training-focused HR + ME: Organiza- +
(2004) in area of development of tional culture
new products or services Performance-based rewards 0
Team development 0
Bondarouk and Three case studies in Dutch IT innovation implemen- A number of HRM practices relating *
Kees Looise organizations tation e.g. to job design, communication,
(2005) participation and rewards
Jiménez-Jiménez Survey (sent to a CEO of each Perceived innovation Recruitment 0
and Sanz-Valle firm) of firms with more than 25 strategy related to e.g. Hiring 0
(2005) employees from the most sig- product and technological Training 0
nificant industries of the region innovation, as well as to Performance appraisal 0
of Murcia in Spain, a total of 376 staff qualifications. Internal career opportunities +
firms (180 CEOs responded) Participation +
The International Journal of Human Resource Management
Compensation 0
Practice bundles +
(Continued)
937
938
Appendix 1. (Continued)
3. What are
Shipton et al. Longitudinal study of managers Estimations of activities Sophistication of HR system +
(2005) from 111 UK manufacturing firms in and amount of product HR for learning climate +
innovation Pay level determined by appraisal 0
Evaluation of innovation in Sophistication of HR system +
production technology HR for learning climate +
H. Seeck and M.-R. Diehl
Pay level determined by appraisal 0

Perceived process inno- Sophistication of HR system 0
vation
HR for learning climate 0
Pay level determined by appraisal –
Dorenbosch et al. Survey of 243 employees of large Innovative work behaviors High-commitment HR bundle + ME: Production +
(2005) Dutch local government organi- (Self-reported) ownership (i.e.
zation, working in administrative, ownership for
knowledge-intensive professions. their job)
Wang and Zang Survey of 209 managers from Perceived innovative per- Strategic HRM practices +
(2005) companies operating in China formance (both technical Functional HRM practices 0
and process)
Collins and Smith Survey of CEO, HR managers and Revenue from new 16 individual commitment based HR + ME: Trust +
workers of 136 knowledge inten- products and services and practices were used to assess the use of ME: Cooperation +
sive companies (high technology) one-year sales growth HR, a low score indicates a low usage ME: Shared +
in the US language
ME: Knowledge +
exchange &
combination
Liao (2006) Survey of 209 CEOs in Taiwanese Perceived product inno- Behavior control 0 MO: Task charac- +
IT firms vation teristics
Output control – 0
Input control + –
Behavior control 0 MO: Expectations 0
Output control – 0
Input control + +
(Continued)
3. What are
Li et al. (2006) Study of top managers from 194 Perceived technological Training +
Chinese high-tech firms innovation Material incentives –
Non-material incentives +
Outcome appraisal and control –
Process appraisal +
Shipton et al. Longitudinal study of 22 UK Evaluation of product Exploratory learning +
(2006) manufacturing companies. Data innovation Training +
gathered in managerial inter- Appraisal +
views in 22 companies and data Induction +
from innovation surveys of the Contingent pay 0
same companies. Extent of team work +
Complementary effects partial
Perceived innovation in Exploratory learning +
technical systems Training +
Appraisal +
Induction +
Contingent pay 0
Extent of team work +
Complementary effects partial
Verburg et al. Survey of 175 Dutch HR profes- Perceived organizational Bureaucratic HR bundle 0
(2007) sionals innovation relating to Flexibility and professionalism bundle +
external and internal
aspects of technological
and administrative inno-
vations
(Continued)
939
940
3. What are
Chen and Huang Survey of 146 top managers in Perceived technological Staffing + ME: Knowledge +
(2008) Taiwanese firms innovation Training 0 management 0
Participation + +
Performance appraisal 0 0
Compensation + +
Perceived administrative Staffing + ME: Knowledge +
innovation Training 0 management 0
Participation + +
Performance appraisal + –
Compensation 0 0
Walsworth and Survey of Canadian workplaces Product innovation Variable pay 0/– MO: internation- +
Verma (2007) and employees, 2553 workplaces Training + alization 0
Employee involvement + –
Process innovation Variable pay 0 0
Training + 0
Employee involvement + –
Jiménez-Jiménez Interview survey of 173 execu- Product innovation HR system +
and Sanz-Valle tives of Spanish firms Process innovation HR system +
(2008) Administrative innovation HR system +
Zanko et al. (2008) Case study in Australian subsidi- Innovative cross-functional Various HR practices and issues *
ary of European manufacturer of approach to new product
military electronics systems development
Armstrong et al. A survey of Irish companies Percent of sales derived 18 HR practices to form an index +
(2010) representing various industries, from recently introduced presenting a measure of HPWS
responses from the managing products and services
director and HR managers of each
company
De Saá-Pérez Survey of 157 firms in Canary The number of new prod- HRM system in terms of degree of +
and Díaz- Díaz Islands representing various ucts and processes over the commitment fostering practices (high
(2010) industries previous five years or low commitment HRM system)
(Continued)
3. What are
Wei et al. (2011) A questionnaire-survey of 223 An evaluated number of An eight-item measure that was used + MO: Develop- +for developmental
executive managers in China, new products developed to describe the extent to which the mental culture culture
respondents include HRM man- in comparison to industry firms had adopted SHRM practices and firm structure 0 for firm structure
agers and CEO/finance managers average +for three-way inter-
action
Chang et al. A survey of Chinese high technol- Perceived firm innova- Coordination flexibility orientated HRM + ME: Potential +
(2012) ogy firms, respondents include tiveness as rated by the and resource flexibility orientated HR; absorptive +
CEOs and directors as well knowl- respondents capacity and real-
edge workers ized absorptive
capacity
Jiang, Wang, et al. Survey of 106 firms in China (data Administrative innovation hiring and selection + ME: +
(2012) collected separately from three Technological innovation reward + Employee crea-
different groups of respondents) job design + tivity
teamwork +
training –
performance appraisal –
(Heffernan et al., Secondary data based on People Proportion of total sales High-performance work systems: ME: Creativity +, partial mediation for
2009) Management in Ireland Survey. coming from products or employee resourcing; training and climate communication and
2000 top companies. Respond- services introduced within development; performance manage- involvement
ents include HR managers the previous 12 months ment and remuneration; communica-
as a part of a performance tion and involvement/family friendly/
measure work life balance.
Lopez-Cabralez Survey of 86 managers respon- Perceived product innova- Knowledge-based HRM practices 0 ME: Unique 0
et al. (2009) sible for R&D departments in tion activity Collaborative HRM practices 0 knowledge +
innovative Spanish industries
ME: Valuable
knowledge
(Continued)
941
942
3. What are
Beugelsdijk (2008) Survey questionnaire of 998 Share of improved products Training and schooling +
Dutch firms, applied in person in total sales Task rotation 0
Job autonomy +
Flexible working hours 0
Short-term contracts –
Performance-based pay +
Share of radically new Training and schooling 0

products in total sales Task rotation 0
Job autonomy +
Flexible working hours +
Short-term contracts 0
Performance-based pay 0
(Perdomo-Ortiz Survey of 106 respondents from Perceived technological Training + MO: Strategic ori- 0
et al., 2009) medium and large Spanish innovation Teamwork + entation towards 0
industrial firms Controlled extrinsic motivation + innovation 0
Autonomous extrinsic motivation + 0
Perceived non-technologi- Training + MO: Strategic ori- 0
cal innovation entation towards
innovation
Cooke and Saini Qualitative email survey of 54 Perceived adoption of Learning and development + –
(2010) Indian managers production, business pro- employee involvement +
cess and customer service quality initiatives +
innovation performance management schemas +
employee welfare +
engagement schemas +
Sanders et al. Survey of 272 employees in four Innovative behavior Practices relating to influence +
(2010) Dutch and German technical Practices relating to flowPractices 0–
organizations relating to primary rewards
Practices relating to secondary rewards 0
Content +
(Continued)
3. What are
Lin (2011) Survey of 86 information and Employee creativity and IT and Virtual Organization (relating +
electronics companies in Taiwan. organizational innovation to HRM) +
+
+
(De Winne and A survey study 294 Belgian Innovation output A number of knowledge-manage- +
Sels, 2010) start-ups (1–2 years old, 1–49 (consisting of innovation ment-related HRM practices imple-
employees) in production process, mented
improvement of existing
products/services, develop-
ment of new products and
services and innovation in
supporting processes (e.g.
administration)
(Alfes, Truss, A survey of 1153 workers in Self-rated innovative work Perceptions of HR based on practices + ME: work engage- +
Soane, Rees, recycling and waste management behaviors identified by the high-performance ment
and Gatenby, in the UK literature: selection, training, reward
2013) systems, career management, devel-
opment opportunities and feedback
mechanisms
Zhou et al. (2013) Survey of 179 organizations in Firm innovation and per- Commitment-oriented HRM system + MO: Complem
China (multiple sources) formance (consisting of 15 items)
Collaboration-oriented HRM system + entary effect
(using 6 items) between com-
mitment and
collaboration-ori-
entated HRM
systems
(Continued)
943
944
3. What are
Ling and Nasurdin Survey of 674 large manufactur- Organizational innovation- performance appraisal +(only for
(2010) ing companies in Malaysia Product and administrative admin-
innovation istrative
innovation)
career management –
training +(for all
product,
process and
admin-
istrative
innovation
reward system –
recruitment –
(Fu et al., 2015) Survey of Irish accounting firms, Annual revenue per HPWS index created to measure the + ME: employee +
in total 195 HR managers/part- professional staff from new presence and use of HRM practices innovative work
ners/directors represented 120 services and clients behaviors
firms
Denotations:
+ = significant positive influence.
0 = no significant influence.
– = significant negative influence.
* = qualitative study, not possible to indicate.
MO = moderator, ME = mediator.

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The International Journal of Human Resource

ISSN: 0958-5192 (Print) 1466-4399 (Online) Journal homepage: https://www.tandfonline.com/loi/rijh20

A literature review on HRM and innovation – taking

Hannele Seeck & Marjo-Riitta Diehl

To link to this article: https://doi.org/10.1080/09585192.2016.1143862

Published online: 04 Mar 2016.

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A literature review on HRM and innovation – taking stock

CONTACT Hannele Seeck h.seeck@lse.ac.uk

different types of innovation. After this, we move on to look at the moderators

Paralleling HRM – performance linkage and HRM – innovation linkage

Table 1. Overview of HRM and innovation studies (n = 35).

had appeared in the Academy of Management Conferrence Proceedings (AoM)

products or revenue from new products and services as a measure of innovation.

Direct effects: does HRM influence innovation?

start-ups. They found that HRM practices represent an important determinant of

and Valle-Cabrera (2009), neither knowledge-based nor collaborative HRM prac-

The impact of HRM bundles on administrative and process innovation

Compared with technological and product innovation, we find less evidence of

The impact of best practices on technological and product innovation

We find a degree of consistency in the findings concerning the impact of individ-

The impact of best practices on administrative and process innovation

As mentioned earlier, a smaller number of studies have covered administrative

To summarize, the role of context-specific, high-commitment practice bundles

Moderators and mediators: when and how does HRM influence

Why does HRM influence innovation – the mediators

Moderators: strategy, industry, knowledge-

Figure 1. Framework summarizing the reviewed literature.

that flexibility-orientated HRM systems enhance market responsiveness and firm

Taking stock and future directions

definition and the understanding of ‘best practices’ and HRM systems

López-Cabrales, A., Pérez-Luño, A., & Valle-Cabrera, R. (2009). Knowledge as a mediator

Pay level determined by appraisal 0

Share of radically new Training and schooling 0

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