Knowledge is the currency of the new economy and consequently information is power. For this reason, it is a business imperative to grow and shape intellectual capital. Human resource management (HRM) plays a pivotal role in creating and growing intellectual capital and embedding it within organizational systems. Previous studies in HRM have demonstrated the connection between technological innovation and HRM in two conspicuously different ways. Specifically, some have illustrated how HR strategies can enhance technological innovation in organizations (Gloet & Terziovski, 2004; Jiménez-Jiménez & Sanz-Valle, 2005) while others have shown ways in which HR functions can be aligned and made more efficient by the effective use of technology (Ashbaugh & Miranda, 2002; Broderick & Boudreau, 1992; Bussler & Davis, 2001/2002). In this article, a more holistic approach is taken in viewing technology as both an input and an outcome of effective HRM. To this end, the aim here is to provide a description of some of the key ways in which HRM can enhance the development, implementation, and success of new technologies as well as how HRM can enhance its own value through the use of new technologies.
Hrm’S Role In Technological Innovation And Adaptation
The implications of HRM for knowledge management (KM) and innovation are profound. There is a plethora of research, which has linked technical innovation to a range of HR functions such as recruitment and selection (Grandori & Sonda, 1995), training (Beatty & Schneier, 1997), and performance appraisal (Gupta & Singhal 1993; Mumford, 2000). According to the behavioral perspective (Schuler & Jackson 1987), the link between HRM and technological innovation results from HR practices eliciting and controlling attitudes and behaviors of employees to create sufficient conditions in which innovations can occur. For example, Scarbrough (2003) identified three HRM functions capable of impacting the innovative capacity of an organization by mediating its flows of knowledge. These were (1) selection methods, (2) compensation strategies, and (3) career systems. He argued that where HRM is intrinsically linked to a firm’s business strategy, it can serve as a tool, which aligns employee skills and behavior with the flow of knowledge needed to develop innovations. Similarly, Schuler and Jackson (1987) established a connection between HRM practices and three types of strategy, namely (1) cost reduction, (2) quality enhancement, and (3) innovation. Accordingly, they proposed a model where each strategy is underpinned by a distinct set of HR practices that serve to adjust employees’ behavior.
Key Terms in this Chapter
Human Resources Information Systems (HRIS): The use of information systems to gather, store, integrate, and transform HR data into useable information that can be utilized in HR decision making.
Explicit Knowledge: Knowledge that is formal and systematic, which can be easily communicated and shared as product specifications, a working manual, scientific formula or a computer program.
Tacit Knowledge: Knowledge that is highly personal and hard to formalize, communicate, or transfer to others. Tacit knowledge is highly context specific and deeply rooted in action. It is the “know-how” that people develop after years of experience and practice.
Knowledge Management (KM): Concerns the formalization of experience, knowledge, and expertise that create new capabilities, enable superior performance, encourage innovation, and enhance customer value. It entails functions such as knowledge creation, knowledge valuation, and metrics; knowledge mapping and indexing, knowledge storage, knowledge dissemination, sharing and implementation.