There is no doubt that it is extremely important to manage resources in an effective way when it comes to the activity within different organizations, as the way that resources are used remains one of the factors that are strictly interconnected with commercial success in general. When it comes to such a sphere as human resource management, it needs to be said that it touches upon many important topics that need to be considered to improve the performance of an organization by defining the potential of employees and implementing this knowledge into practice. Labor relations can be listed among important topics studied by many researchers who are interested in practical problems existing within the field of human resource management.
Innovations related to the discussed field need to be successfully implemented into practice by human resource professionals as the ability to align the work of a company with the requirements that exist in the changing world of business increases the chances of organizations to gain a competitive advantage over their business rivals. Apart from leading to the development of new products or services, innovation can go beyond technologies as it requires collaboration between team members to work cooperatively for achieving corporate success.
Human resource leaders must develop and maintain a unique set of organizational capabilities associated with an innovation for giving the business a competitive advantage in their sphere. This requires developing a specific mix of values and resources that rivals lack. Cohesive human resource management paired with innovation efforts play a significant role in maintaining “leading edge” competitiveness for organizations at different stages of their development, either during change or great competition (Dalota & Perju, 2005). In general, it is an innovation that allows specialists to boost performance and increase flexibility by regulating the collaboration of employers and employees.
The paper focuses on the concept of innovation in human resource management and labor relations in particular. Such information can be used by many specialists to improve the collaboration between people within a company and reach organizational goals.
In the enlarged sense of the term, labor relations can be called a topic touching upon a wide range of interplay activities between leaders and their followers at work. Discussing the topic of labor relations, it needs to be said that it is studied concerning unionized workers and those who are not members of employee organizations. Proper labor relations have a direct bearing on overall performance, and it explains why there are many researchers interested in the topic. Competition among businesses is getting more intense due to the changing dynamics of customers’ needs, new technologies, globalization, and deregulation (Aryanto, Fontana, & Afiff, 2015).
Innovation is a socially and economically successful implementation of new ways of changing the inputs and outputs in the value of products or services offered to customers (Aryanto et al., 2015). This section will include a review of research articles on the topics of innovation in HRM and labor relations to determine general trends and expand knowledge on this subject.
According to Farazmand (2004), implementation of innovation and technology for purposes of labor relations can be called an important tool helping to build capacity in the age of industrialization and globalization. Capacity building remains an important goal for human resource specialists who would like to pay more attention to the sphere of labor relations. Capacity building is closely interconnected with labor relations as the latter defines a working climate that is always reflected in business performance. The author addresses innovation and technology as a strategic HRM tool to build capacity in the age of industrialization and globalization.
To withstand the challenges associated with globalization (both positive and negative), it is crucial to implement capacity building and development in all organizational areas such as management, public administration, and maintenance. Farazmand (2004) argued that without human resources and human capital, the successful integration of technologies would be impossible. Without the presence of well-trained and well-managed human resources, modern businesses will not be effective in meeting the challenges of the globalization age. This requires companies to hire a new generation of future-oriented and anticipatory managers that have a clear vision of their organizations’ future and manage the business by “riding the high waves” (Farazmand, 2004, p. 3).
The article by Bileviciene, Bileviciute, and Prazinskaite (2015) explores innovative trends in human resource management and how information technologies can influence its efficiency. As is clear from the opinion supported by the researchers, three are three criteria used to assess the outcomes of innovations in HRM. The latter include efficiency, effectiveness, and economy, and it can also find application in labor relations. It is easier to implement innovations on the individual level than on the organizational level. Due to that, it is not difficult to implement innovations to bring about a resolution to the local disputes involving labor relations.
To promote organizational effectiveness in the context of human resource management and labor relations, Bileviciene et al. (2015) propose to integrate social technologies allowing to improve collaboration within companies. At the same time, the introduction of technologies improving labor relations on the organizational level is a complex task, so the management should develop a cohesive action plan for achieving success.
In their research, Seeck and Diehl (2016) were concerned with bundled HRM practices that firmly aligned with innovation. The researchers concluded that all human resource management practices targeted at learning and regulating labor relations could align well with innovative processes. Some evidence pointed to the important role of micro and macro-level moderators that establish specific condition barriers for maintaining relationships between HRM and innovation in the sphere of creativity and knowledge management.
As is stated by Maier, Brad, Nicoara, and Maier (2014), there is the framework allowing human resource managers to fulfill a range of tasks connected with labor relations and implementation of innovations into practice. According to their model, HR specialists are to be provided with resources allowing them to define the actual capacity provided by human resources in their organizations.
The motivation of employees and employers is urgent when it comes to reaching new opportunities allowing them to gain a competitive advantage. Also, human resource professionals are responsible for modifying employees’ attitudes and encouraging the establishment of innovative labor relations when the collaboration between an employer and an employee is seen as an example of social partnership. Also, it has been found that organizations demonstrating innovative hiring criteria are more likely to hire employees providing diverse ideas and propelling labor relations to the next level. Among the efforts, business culture is the most powerful force that will help to ensure that the integration of innovative technologies into human resource management is successful. A higher level of participation among employees will contribute to the development of conditions encouraging employees to bring new ideas to the table and enhance performance outcomes (Maier et al., 2014).
Consequently, these findings can be applied in the sphere of labor relations as the attitude of chiefs to employees heavily depends upon the level of participation demonstrated by the latter. Another important point refers to the system of incentives where monetary rewards offer a powerful force for promoting commitment, directing the professional growth of the personnel, and developing a more innovation-oriented organizational culture. Demonstrating appreciation from employers, rewards also remain the measure strengthening labor relations and helping to implement additional innovations in the area.
Aryanto et al. (2015) took a more practical route and studied the association of human resource management and innovation capability by providing real-life examples from experiences of Indonesian software firms. The authors suggest that companies should develop innovation capabilities for managing the process of innovation ranging from the generation of ideas to commercialization (Aryanto et al., 2015).
More than that, innovations in the field of labor relations may also improve the performance of companies. The research included forty-two companies from 172 Indonesian software firms. Authors were successful in proving that strategic human resource management had a significant impact on innovation capability. Concerning human resource management, the achievement of positive results in technology incorporation can only be possible with the help of a cohesive strategy. Thus, HRM efforts should always be aligned with the strategy of the firm. Following this logic, the notion of strategic human resource management develops; it is defined as a framework of activities and patterns designed for human resource management to enable the company to achieve the set objectives.
Apart from that, the topic of innovations in HRM and labor relations is addressed in the study conducted by Chowhan, Pries, and Mann (2017). The authors investigated the role of innovation and human resource management concerning strategy and worked for organization; more than that, the findings reported by the researchers can also be used to improve labor relations. The authors of the discussed article state that by focusing on persistent characteristics of HRM (practices and control variables), managers will have a more cohesive practical account of innovation behaviors in the workplace.
Chowhan et al. (2017) differentiate between practices that could help organizations become more efficient in incorporating innovation into human resource management operations and labor relations management. It is crucial to note that not only high-tech firms should foster innovation and align it with human resource management practices. Among these practices, skill-enhancing, motivation enhancing, opportunity enhancing, use of technology, the introduction of organizational changes as well as integration and collaboration are the most prominent. Sustaining a competitive advantage is impossible without the incorporation of innovative tools that help companies communicate with potential customers, optimize their operations, and make sure that the efforts of the human resources work in cooperation with the key objectives and goals.
Human resource management is a powerful tool that can help companies to perform a wide range of tasks, including managing labor relations. Due to the changes in primary values for working groups, there is a need for businesses to determine how they can integrate innovations for improving their performance, sustaining competitive advantage, and ensuring fruitful contacts between employers and employees involving mutual respect.
The review of research literature revealed that innovation in human resource management and labor relations allows companies to be on track with the latest trends and make sure that employees stay dedicated, inventive and that employers see the latter as important social partners. Human resource management should incorporate special techniques (e.g., skill-enhancing, a system of rewards, etc.) to motivate employees and, therefore, change the vision of labor relations demonstrated by employers.
In the end, organizations are recommended to implement innovative practice into work as often as possible because such an approach allows them to improve labor relations, increase profits, and maintain a competitive advantage over other companies specializing in the provision of the same service. Companies should delve deeper into the world of innovation and incorporate them into every aspect of their operations.
Since the goal of all businesses is to generate more profit and maintain a competitive advantage, researching how to optimize and rationalize the HRM processes will help many companies in becoming more efficient in their costs and resources. Strategic human resource development is also important in the context of innovative practices since technologies, and new ideas can have a significant influence on how corporate strategies work. As labor relations are strictly interconnected with every organizational sphere, the importance of innovations aimed at the creation of an appropriate working climate cannot be overestimated. Many researchers confirm that innovations in the field of labor relations act as momentum into resolving important work-related issues.
Aryanto, R., Fontana, A., & Afiff, A. (2015). Strategic human resource management, innovation capability and performance: An empirical study in Indonesia software industry. Procedia: Social and Behavioral Sciences, 211, 847-879.
Bileviciene, T., Bileviciute, E., & Prazinskaite, G. (2015). Innovative trends in human resource management. Recent Issues in Economic Development, 8(4), 94-109.
Chowhan, J., Pries, F., & Mann, S. (2017). Persistent innovation and the role of human resource management practices, work organization, and strategy. Journal of Management & Organization, 23(3), 456-471.
Dalota, M-D., & Perju, A. (2005). Human resource management and the company’s innovation. Romanian Economic and Business Review, 5(4), 122-131.
Farazmand, A. (2004). Innovation in strategic human resource management: Building capacity in the age of globalization. Public Organization Review: A Global Journal, 4, 3-24.
Maier, A., Brad, S., Nicoara, D., & Maier, D. (2014). Innovation by developing human resources, ensuring the competitiveness and success of the organization. Procedia: Social and Behavioural Sciences, 109, 645-648.
Seeck, H., & Diehl, M-R. (2016). A literature review on HRM and innovation – Taking stock and future directions. The International Journal of Human Resource Management, 28(6), 913-944.