Globally, business has undergone a dramatic transition during the last decade. Global economic developments, technical changes, and dynamic market conditions all contribute to this shift. Due to this, sustaining and being competitive has become a struggle for businesses. Organizational innovation based on workplace creativity has emerged as a separate source of competitive advantage. Innovation is defined as the application of new ideas that are innovative and valuable to the organization in order to bring new products and services to market or to change how work is done. Employee creativity, according to researchers, contributes to significant organizational innovation and determines an organization’s sustainability. Modern managers must encourage staff to be more creative in their approach to work as part of business change.

Creativity is influenced by HR interventions such as creativity training, rewards and incentives, and organizational learning. Researchers define creativity as taking a unique approach to solving issues, bringing innovation to old ideas, and coming up with a new solution. The members of the organization are the source of creativity. As a result, many researchers believe that people are an organization’s most valuable resource, and that in order to succeed, companies must learn how to manage, motivate, and reward them. As it excites and inspires individuals, providing rewards and incentives to employees appears to be the most realistic strategy to boost employee innovation. According to empirical research, paying an employee for their innovative achievement increases the employee’s interest.

How Human Resource Management Enhances Creativity and Innovation

Employee creativity and invention have been widely acknowledged as contributing to corporate effectiveness in recent years. Many elements have been identified by researchers as stimulating or inhibiting creativity and innovation. Top-level leadership, organizational culture, R&D investment, and organizational structure and design are all examples of these factors at the organizational level. Leadership at the managerial level, as well as co-worker support, play important roles on the job. Human resource management (HRM) can play a proactive role in supporting innovation in a changing environment, according to a previous argument.

According to research, certain HR practises, including as human resource planning, profit sharing, and result-oriented assessments, as well as selectivity in staffing, training, and incentive compensation, boost performance. Others link various sorts of HRM ‘bundles’, ‘systems’, or ‘configurations’ to various metrics of organizational performance. High-involvement work systems and high-performance work systems are two terms used to describe these integrated systems of HRM practises. These findings make a significant contribution to our understanding of the relationship between HRM and performance; nevertheless, we still don’t know how much HRM supports employee creativity and organizational innovation. The relationship between HRM and employee creativity directly and organizational innovation indirectly has been assumed but not evaluated, which is of special importance.

The importance of human resource management on employee creativity and corporate innovation cannot be overstated, and it may be a significant factor in comprehending. HRM activities, it is further believed, may be related to organizational innovation in two ways: how to choose, develop, and motivate people to generate ideas, and how to assist employees in putting their innovative ideas into action. HRM may help employees examine difficulties and encourage them to learn more about what they already know, which can lead to corporate innovation. Firms can, for example, acquire new employees with a high level of creative capability, provide training, and re-design compensation systems to encourage and reinforce employees’ creative behaviours.

Summing Up

The shift from the perception of creativity as the domain of a select few gifted individuals to the belief that individuals’ creativity can be influenced by groups, organisations, and even entire societies reflects the growing relevance of creativity as a driver of innovation and economic success. Human resource management and HR professionals play a critical role in encouraging a creative environment that reaches across organisations through rewards, recognition, management practises, and the communication of organisational values that respect and support each individual’s unique skills and creative potential.

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