Innovation capacity is one of the essential elements that ensure sustainability of the organizations. Organizations need to be creative and innovative so as to put products and services to market by forecasting customer needs to get competitive advantage in a rapidly changing business environment. Businesses that are more pioneering in innovation will be more successful if they can respond to changing environmental conditions and develop new capabilities that will allow them to deliver better performance. Innovation helps businesses to reduce costs, improve performance, and create new products and services to increase their competitiveness. Scholars contend that the development and implementation of human resource management is critical to benefit such essential employee contributions.
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Studies on creativity and innovation in the field date back to 1940s and from 1940s to the present date, the aim to determine under which conditions creativity can be achieved and factors affecting innovation and innovation performance has been one of the most crucial issues in the field of management (Rothwell, 1992; Xu, Chen, Xie, Liu, Zheng & Wang, 2007).
The fact that many factors both inside and outside of the organization affect innovation performance, and because of the issues’ multidimentional structure, from many aspects of life such as innovation economy, business, management, industrial psychology, sociology and marketing, countless lots of researchers and authors have been affected while interest in HRM started much later.
In the period up to the 1990s, in order to improve innovation performance, employees in the literature on Business and Management were seen as important assets in this process and proposals were made for employees. However, they did not go beyond being the tools used in the innovation process.
Up to 20 Until now, apart from just few researchers who mentioned the need for HR policies as an enterprise strategy regarding innovation, there were no studies on HRM-innovation relationship (Miles & Snow, 1984; Schuler & Jackson, 1987).
Schuler and Jackson (1987) citing Porter, argued that a firm should follow one of its innovation, quality improvement and cost reduction strategies to gain competitive advantage. The authors have stated that all three strategies must demonstrate employees with specific skills and their different role behaviors. According to competitive strategies, Miles and Snow (1984) apply firms are divided as the ones implementing defensive strategies, implementing leading strategies, and firms implementing analyst strategies. Researchers likewise argued that each type of strategy would need organizational and human resources and policies to be managed and regulated in a manner appropriate to it.
However, much attention has not been paid to HR policies for innovation in their work-the conversion to specific HR practices or the consequences of these policies to “organizational innovation”.