Training human resource to generate innovation: Solution for developing organization’s performance
TRAINING HUMAN RESOURCE TO GENERATE INNOVATION:
SOLUTION FOR DEVELOPING ORGANIZATION’S PERFORMANCE
**
1
2
Nguyen Thi Phuong Loan*- Nguyen Thi Tu Quyen
ABSTRACT: In the globalized world with highly interconnected processes, organizations now have to cope
with an increasing number of challenges. Facing competition from all over the globe, innovation capacity
has become more and more essential in each firm, ensuring the sustainable development in a long run. In
this paper, the authors will focus on presenting several concepts including human resource management,
training human resource, and innovation; discussing the value of training in generating innovation and the
relationship between employee training and organizations’ innovation performance. This paper serves as a
theoretical foundation by pointing out the relevance of training human resource and innovation capacity
for organizations and giving some suggestions on innovation training programs for organizations as well
as the ways to measure the effectiveness of training.
Keywords: human resource management; training; innovation; organization’s performance
1. INTRODUCTION
In today’s economy, there is an increasing conviction that the investment of an organization in
innovation is an important factor that can strongly affect an organization’s competitive advantage
through overall improvements in performance. Marsh (1996) states ‘Companies that introduced new
technologies at least once a year were three times as likely to forecast an increase, or rapid increase in
turnover, than those that never introduced new technology’. In other words, innovation helps with the
bottom line. How to generate innovation is a hard question for all managers. To address this issue, Rosli
and Mahmood (2013) and Nicholson et al. (1990) indicate that human resources management (HRM)
with an incomparable source of competitive advantage is key to innovation. Rosli and Mahmood
(2013) also conclude the significant relationships between training as one aspect of HRM, innovation
and firms’ performance.
The main objective of this paper is to identify the relationship between training human resource
management and generating innovation in organization in order to improve organization’s performance. This
paper also aims to present how enterprises organize training programs. The following research questions
will be answered: What is human resource management, what is training human resource and what is
innovation? What are the roles of training human resource in generating innovation for organization? How
do enterprises organize innovation training programs?
*
Academy of Finance,58 Le Van Hien Street, Duc Thang Ward, Bac Tu Liem District, Ha Noi, 10000, Vietnam
** Thuongmai University, 79 Ho Tung Mau Street, Mai Dich Ward, Cau Giay District, Ha Noi, 10000, Vietna, Cor-
responding author. Tel.: +84948929938, E-mail address: [email protected]
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2. DISCUSSION
2.1. Human resource management, training human resource and innovation
2.1.1. Human resource management
Human resource management is a part of management dealing directly with people whereas
management includes marketing, management information systems, production, research and development,
and accounting and finance. The focus of human resource management is on managing people within the
employer – employee relationship. Specially, it involves the productive use of people in achieving the
organization’s strategic business objectives and the satisfaction of individual employee needs. Because the
purpose of human resource management is to improve the productive contribution of people, it is intimately
related to all other aspects of management. Delaney and Huselid (1996) find a positive association between
HRM practices and organizational performance. Their research showed that staff selection, employee skills,
employee motivation, structure of jobs and training are positively related to organizational performance.
Islam and Siengthai (2010) further confirm the positive relationship between human resource management
practices and organizational performance when they examined the impact of human resource management
practices have on the performance of enterprises in the Dhaka Export Processing Zone.
After reviewing the research literature, Pfeffer (1998) identify seven dimensions of effective people
management that produce substantially enhanced economic performance, including: employment security,
rigorous selection, self-managed teams and decentralized decision making, comparatively high compensation
linked to individual and organizational performance, extensive training, reduce status distinctions and extensive
sharing of financial and performance information throughout the organizations. Harel and Tzafrir (1999) after
drawing on empirical and theoretical studies on human resource management practices, identify that recruitment,
selection, compensation, employee participation, internal labor market and training as the six of human resource
management practices, have a positive relationship with organizational and market performance.
2.1.2. Training human resource
According to Hackett (2004), training is about changing the behavior of employees to maintain or
improve the performance of individuals in a direction that will achieve organizational goals. It focuses
on providing instruction to develop skills, behaviors, abilities that can be used immediately on the job.
Training, in short, can be seen as very much about getting the job done. There are various forms of training:
informal and formal training; general and specific training. Informal training consists of learning by doing
and guidance from colleagues during work. Formal training has a predetermined plan and format design
and can be provided by external instruction or in – house. General training provides workers with skills
and knowledge that are transportable between firms, to a lesser or greater extent. Specific training provides
workers with skills that are generally of use to only one firm. In practice, there is a continuum between
specific and general skills.
Training refers to the process to obtain or transfer knowledge, skills and abilities needed to carry out a
specific activity or task; therefore, benefits of training both for employer and employees are strategic in nature
and hence much broader (Nguyen and Nguyen, 2017). McNamara (2008) confirms that training involves
an expert working with leaners to transfer to them certain areas of knowledge or skills to improve in their
current jobs. The goal of training is for employees to master the attitude, skill and knowledge emphasized in
training programs and to apply them to their day-to-day activities. It is clear that a comprehensive training
program helps in deliberating on the knowledge, skills and behaviors necessary to create competitive
advantage and help organizations meet the goals (Peteraf, 1993).
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2.1.3. Innovation
Related to innovation, the academic focus on innovation was initiated by the work in 1934 of the
economist, Joseph Schumpeter, who defined an innovation as any of the following: (1) the introduction of
a new goods, (2) the introduction of a new method of production, (3) the opening of a new market, (4) the
conquest of a new source of supply and (5) the carrying out of a new organization of industry (Schumpeter,
1934). He also stressed the novelty outputs aspect which can be summarized as ‘doing things differently’.
Many authors have followed Schumpeter’s lead by associating newness with innovation. For instance,
Drago and Wooden (1994) define innovation as the introduction of major new plant, equipment or office
technology. Nunes et al. (1993) extend the definition of innovation to include major changes in the product
or service. Rogers (1999) extend the definition of innovation to include the major restructuring of how work
is done and a reorganization of management structure. Based on their reviews, Crossan and Apaydin (2010)
compose a comprehensive definition: Innovation is production or adoption, assimilation, and exploitation
of a value - added novelty in economic and social spheres; renewal and enlargement of products, services,
and markets; development of new methods of production; and establishment of new management systems.
It is both a process and an outcome. Practically, innovation is a process of turning opportunity into ideas
(Flynn, Doodley & Cormican, 2003) and it refers to the application of explicit and tacit knowledge assets in
holding new processes and products. It may occur in service, design or market (Perez et al., 2012).
2.2. Roles of training human resource in generating innovation for organization
Training, by way of HRM plays an important role in generating innovation.
• Firstly, training can drive the innovation as the incubator of new ideas. It is clear that training enables
employee’s to master specific skills and abilities needed to be successful. In other words, training helps
them to access a chain of new skills, knowledge as well as new ways to work. It is widely acknowledged in
management literature that training programs directly influence the quality of organization human capital and
help organizations create and develop a unique workforce with expansive knowledge and skills to innovate
(Perez et al., 2012). One example to illustrate this point can be found at VIETTEL. VIETTEL, one of the
fastest growing telecom operators in Vietnam, had a training program, namely ‘initiatives and ideas’ in 2011.
This year, VIETTEL attracted 406 initiatives and 3224 ideas (more than three times higher than in 2010) that
gave VIETTEL benefits worth up to 372 billion VND (Nguyen, 2012). Moreover, through training programs,
a learning environment can be created for all employees to share their spark. Wright et al (1994) also make
this point because they accredit training as indispensable HRM practice to create, share and use knowledge.
From this knowledge, a lot of new ideas that lead to innovations will be creative. That is why Loewe and Chen
(2007), Shipton et al. (2005) suggest training is a vehicle for new products, processes and technologies.
• Secondly, training programs help employees recognize the movement of business environment and
therefore, engender renewal to adapt with these changes. Without training, it may be difficult to apprehend
the changing environmental factors and employees and organization simply continue to do whatever was
done in the past. Rosli and Mahmood (2013) note that due to the continuous changing of the economic
environment, it is necessary for an organization to respond to the market need through training employees
to be innovative. Training programs provide necessary data about the changing environment issues for
employees and then they use these data to convert into their information, knowledge (Castellanos & Martin,
2011). This knowledge can be used to make a new suitable change, as an innovation, and develop the
inimitability of human resource (Fahy, 2000). Hence, there is no doubt that training, as a fundamental
practice has significant value in inspiring innovation.
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2.3. Training and an organization ability to innovate
It may be interesting to specify below the relationship between employee training and an organizations
ability to innovate. It is a controversial topic that has been researched by many. Generally, training has
a positive effect on organizations’ innovation (Perez et al., 2012). For instance, Roffe (1999) believes
that through training, the organization can build the intellectual capital and use the intellectual capital
to stimulate innovation. As previously explained, training is an attempt to improve skills, behaviors and
knowledge of employees. These improvements permit employees to quickly accept the new skills in order
to innovate. Similarly, Shipton et al. (2005) state that training can expose individuals to new experiences
and harness the passion of workforces, consequently, training contributes to innovation performance of
an organization. Additionally, other authors consider that innovation in products and services should be
gone together with higher level of training (Beugelsdijk, 2008; Marquardt, Nissley, Ozag & Taylor, 2000).
It means that employee training can improve organizations’ innovation performance. By using Statistics
Canada’s 2001 Workplace and Employee Survey, Zeytinogly and Cooke (2013) confirm that workplaces
that provide more on-the-job training for employees will adopt more new information technology and be
more innovative.
There are several different training programs that organizations can use to achieve higher levels of
innovation. For example, orientation programs, an attempt to send clear messages and provide accurate
information about the organization culture, the job and expectation (Ivancevich & Konopaske, 2013) can
be used as the first training program to develop organizations’ innovation performance. In such programs,
organizations should prepare some materials related to basic knowledge about innovation such as a
definition, the necessary of innovation or some common ways to make innovation to help all employees have
a perspective on it. Adaptive training is another program which organizations can apply to get great levels
of innovation. This training concentrates on teaching employees new skills to face changes and problems
(Perez et al., 2002). However, it should be noted that investment in training would not always make higher
levels of innovation. Although training has the recognition importance in generating innovation, it does not
mean that all training will be applied in the workplace. In case of small and medium enterprises (SMEs),
some authors argue that they like external experienced employees recruitment than training internally. More
importantly, Perez at el. (2012) study of 139 SMEs and concluded that training has a negative effect on the
innovation capacity of SMEs. It can be recapped that in normal, employee training can help organizations
improve theirs innovation performance through some programs like orientation training or adaptive training.
2.4. Organizing innovation training programs for organization
As mention above, organizations can choose some training programs like orientation training or
adaptive training to train about innovation and generating innovation for employees. An example of a
systematic approach is shown in Fig. 1. A three – step approach to training that involves: (1) assessment of
training needs, (2) conduct of the training activity and (3) evaluation of training activity.
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ASSESSMENT
ACTIVITY
EVALUATION
Develop evaluation criteria
Identity training needs
- Reaction
- Learning
- Behavior
- Results
- Organizational variables
- Task variables
- Person variables
Establish training
objectives
Select and design
programs
Evaluate outcomes against
criteria
Conduct program
Fig.1. Suggested systematic training model
Source: Raymond J.Stone, 2010
In the assessment phase, organizations establish what training is needed, by whom, when and where so
that training objectives can be established. The effectiveness of training is enhanced when training activities are
preceded by comprehensive analysis. Training needs analysis focuses on identifying what skills, knowledge
and behaviors need to be developed, translating them into training objectives and providing direction and
purpose for the training effort. It includes organizational variables (in what context will training occur), task
variables (what needs to be taught) and person variables (who needs to be trained and why).
In the activity phase, organizations concern with selecting the training methods and learning principles
to be employed in a training program. Once objectives are set, the next issue is how to best achieve these
objectives. This phase involves considering both content and process. Designing training activities include:
location, timing and presenters.
In the evaluation phase, organizations concern about measuring how well a training activity met its
objectives. To evaluation training, it is necessary to compare the intended outcome with measurements of
actual achievement and to analyze and explain any variances. Kirkpatrick (1983) suggests four ways to
measure the effectiveness of training, as the following table:
Table 1. Ways to measure the effectiveness of training
Measure
Reactions
Indicators
Satisfaction
Enjoyment
How measured
Questionnaire
Interviews
Focus groups
Pencil and paper test
Oral examination
•
•
•
•
•
•
•
•
•
•
•
•
•
Learning
Behavior
•
•
Knowledge
Skill
Work sample
Observation of performance
Performance ratings
Observation of performance
Performance ratings
Third-party feedback
•
Changes in attitudes, behavior,
motivation
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Results
•
•
•
•
•
•
Productivity
Sales
Quality
Absenteeism
Labour turnover
Accident frequency
•
•
•
Production statistics
Sales statistics
HR statistics
Source: Kirkpatrick, 1983
3. CONCLUSION
In summary, training has noticeable value in generating innovation because as an incubator, training
helps employees enhance their skills, behaviors and knowledge to not only finish their tasks but create
new ways to work and adapt with all the environment changing. The greater the focus of organization
on training, the greater their innovation is. It is evident that there is no other different way that managers
should invest in human resource management, in general, in training, in particular, to build the high levels
of workforce and generate innovation.
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