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1. CHAPTER 2: LITERATURE REVIEW
2.1 Introduction
This chapter aims to provide a theoretical and empirical framework covering all the
aspects related to HRM and creativity, in general. In particular, this chapter covers barriers of
HRM to creativity, practices of HRM to creativity, cultural values within organization, and
implications of HRM to creativity. Similarly, componential theory of organizational creativity
and innovation, and four factor theories to team climate are included in theoretical framework.
2.2 Theoretical Framework
2.2.1 Componential Theory of Organizational creativity and Innovation
The componential theory of organizational creativity is identified as one of the major
theories of creativity for employees and organizations, which serve as an incomplete foundation
for various other theories as well as for a number of empirical investigations. Teresa Amabile
(1988) initially articulated this theory and undergone significant progression since then. The
theory is an explicit model of the social and psychological aspects essential for an employee to
produce creative work. It has been specified within the theory that a combination of four aspects
is required for creativity (Amabile, 2012). In addition, creativity should be highest when an
intrinsically motivated employee works in an environment high to support for creativity, high
domain expertise, and high skill in creative thinking. Knowledge, technical skills, intelligence,
expertise, and talent are included in domain-relevant skills particularly where the problem-solver
is working. The tools and techniques developed from the theory for encouraging creativity and
innovation throughout their organization are used by several managers.
A cognitive style and personality characteristics that are conducive to independence, new
perspectives on problems, a disciplined work style and skills to generate ideas, and risk-taking
2. are included in creativity-relevant procedures. Intrinsic motivation principle of creativity is the
third core aspect (Amabile & Pratt, 2016). Employees are mostly creative when they feel
encouraged primarily by the enjoyment, satisfaction, challenge of the work itself, and the
interest, but not by extrinsic factors. Creativity can be stimulated by a social environment by
providing work teams that are diversely skilled, freedom in conducting the work, encouraging
the development of supervisors toward new ideas, and a sense of positive challenge in the work
(Zhang & Bartol, 2010). Intrinsic motivation is the most directly affected component by the work
environment of the three intra-individual components. In contrast, work environment has
influences on creativity-relevant procedures and domain-relevant skills with respect to its
influences on intrinsic motivation.
2.2.2 Four Factor theory of team climate
West (1990) pointed out the most popular model of team climate for innovation. A four-
factor model of team climate for innovation comprises of support for innovation, task
orientation, participative safety, and support for innovation, which was termed as the Team
Climate Inventory. Working environments are understood and evaluated by the concept of team
climate. It informs several important features with interprofessional collaboration. In this regard,
the four factor theory of climate for work group innovation can offer an effective emphasis to
understand both interprofessional collaboration and teamwork (Anderson & West, 1994).
2.3 Empirical Framework
2.3.1 Barriers to Creativity at Group Levels in Organizations
Both quantitative and qualitative studies have recognized other factors that are apparent
barriers to creativity even though constraints and challenges led to creative problem-solving. It
has been indicated that there is a detrimental influence of controlling and hierarchical structures
3. on business creativity (Hon & Lui, 2016). It has been observed that other barriers to creativity
have a tendency to oppose the behaviors of HR managers. On the other hand, organizational
barriers act to ignore or punish creative problem-solving or have inappropriate methods to
capture individual creativity and to use it for innovative objectives while supervisory
encouragement and organizational support identify and reward creativity (Chae, Seo & Lee,
2015).
In addition, the poor use or insufficient resources of current resources further act as
barriers to creativity. In particular, employee skills and expertise are the most underutilized
resources. Still, one of the most important qualities achievers share is the explicit expertise and
knowledge of their subject matter, developed through a combination of practical experience and
years of study (Blomberg, Kallio & Pohjanpää, 2017). Therefore, investment is important in
employee expertise using training and the opportunity for learning. Risks created on employee
motivation and engagements are considered as the most harmful barriers to employee creativity.
Organizations that are competent to create a culture of innovation and creativity are possible to
empower employee engagement and motivation at the same time, but business creativity is so
dependent on motivation (Walter, 2012).
Extrinsic and intrinsic motivations were identified by Amabile. Indeed, organizations
have more control over extrinsic or external motivators, which include rewards and recognition
(Khalili, 2016). On the other hand, it has been explained that intrinsic motivation tends to exert a
much greater effect of creativity, which include intense interest or passion in a task or subject.
HR once again plays a vital role in order to stimulate this important motivator of creativity while
intrinsic motivation might deem more complex to impact as compared to external drivers (Tian
et al., 2018). HR enhances the odds that individual employees will be linked with the forms of
4. roles that tap into their intrinsic motivation by apparently recognizing the purpose and content of
each job role and exploring the appropriate individuals to do these jobs (Ritzén & Sandström,
2017). Similarly, HR assists that managers do the vital job to assign the right tasks to the relevant
individuals and work teams by working with line managers for communicating the
organizational strategic goals (AllahBakhshian et al., 2017).
It has been identified that social norms, religion, and language are some of the main
motivators affecting creativity with the existing internationalizations and globalization of
organizations in workgroups (Evans, 2018). The reliance on powerful leaders might be a
fundamental need whereas creativity might be led by different social procedures. The association
of culture and language is highly positive and can shape the grammar of an individual. In
addition, the fear of risk taking is the second greatest problem deemed to be evaluating from the
number of post (Ritzén & Sandström, 2017). It is a common perception of employees that they
are either afraid of being ridiculed, criticized, corrected, judged or not accepted in any other way.
Low encouragement from HR or negative experiences led to the feeling of missing
objectiveness. It is assumed that the idea creation and promotion is inhibited by workgroups.
2.3.2 HRM Practices to Creativity and Sustainability
Companies seek for effective human resource management to foster the knowledge and
development in organizations. Gope, Elia & Passiante (2018) conducted a study to examine the
impact of HRM in strengthening the level of creativity along with the knowledge management
capacity (KMC) among individuals working in IT industry. The study has indicated that HRM is
significant in promoting positive attitude among employees that highly values creativity and
knowledge sharing. The study concluded that the given factors are important in improving the
organizational performance of IT companies. Similarly, Kianto Sáenz & Aramburu (2017)
5. studied the role of HRM practices in creating a significant impact over the intellectual capital of
organizations and innovative efforts. The study has indicated that HRM practices are highly
significant in promoting the innovative measures in organizational performances. Besides, HRM
that is integrated through purposeful knowledge is highly impactful in promoting the relational
and structural capital. The study thus identifies that human capital is highly valuable in fostering
and strengthening innovative performances in firms.
Another important identification was related to the role of work team, since they serve as
an important constituent in solving complicated organizational issues. However, in certain cases
work forces failed to acknowledge the role and value of creativity in forming an impactful
organizational environment. Binyamin & Carmeli (2017) conducted an important research in this
regard. The study indicated that the teams were significant in providing maximum contribution
to creativity, while promoting maximum satisfaction level in relation to employee growth. Teams
integrated through low level of structuring were highly evident in positively influencing the level
of creativity among the given group of individuals. Contrary to this, high structuring level
contributed in low levels of growth satisfaction among employees; however no significant
impact was identified in relation to the level of creativity in employees’ performances.
A significant consideration was provided to the influential role of HRM practices in
fostering the job performance of individuals. The impact however was created through effective
trainings initiated as a part of HRM practices. Manzoor et al. (2019) in their study conducted a
survey to identify the relationship between HRM training and job performance. The study has
indicated that training significantly affects the HRM practices while providing a substantial
impact on employee performance. Other variables such as HRM participation, selection, along
with employee empowerment played a crucial role in determining the given relationship.
6. Similarly, training served as a crucial factor in creative a positive impact over HRM practices
that in return influence the performance of individuals. Sustainability in quality HRM practices
was identified as a valuable component in promoting quality practices. Similarly, Jerome (2013)
has elaborated the idea of sustainability as an impactful strategy to improvise the organizational
environment and work force. An important emphasis is provided to the positive impact of
sustainable human resource management to maximize the quality of employee performance.
Alnawafleh, Halim & Tambi (2018) conducted a study to examine the impact of different
HRM practices including, performance recognition and achievement, knowledge management
and employee motivation, training and development etc. on employee performances. The study
has indicated a significant impact of HRM practices in motivating employees. Also, a significant
improvement regarding employee work performance was identified in terms of employing
creative and innovative means to carry out organizational tasks.
2.3.3 Cultural Values
The competitive innovative techniques are employed by various business organization to
maintain a strong market position. This has laid the foundations of a business model that is
entirely based on innovation and creativity. Raj & Srivastava et al. (2013) provided firm focus
towards the impact of organizational learning in influencing employee’s creative abilities. The
idea is employed through HRM practices along with the role of organizational culture.
Organization learning serves as the mediating component in fostering the relationship between
organizational culture, HRM practices along with employee creativity. To promote a culture of
maximum learning and creativity among employees, management should provide a significant
focus towards the formation of culture that values innovativeness and leadership within the
7. business market. Besides, firms should also promote HRM practices that values employees’
autonomy, growth, reward and flexibility.
Liu et al. (2017) investigated the types of HR systems on the basis of employees’
experiences to identify the impact on employee creativity. The study findings were more
significant among cases where employees experienced HRM systems that were oriented through
maintenance. The relationship was highly significant in most of the private owned enterprises, in
comparison to those owned by the state. High level of employee creativity was reflected under
firms operated through the given relationship. Finally, a significant relationship was identified
between employee creativity and firm performance. Similarly, relationship between team
creativity and quality human resource practices were studied by Ma et al. (2017). The study, on
the basis of the input-process-output perspective tested the hypothesis according to which HR
practices and motivation improvement practices are important in significantly impacting the
team creativity. The study has indicated that team efficacy is significant and thus acts as a
mediating variable between HRM practices and team creativity. Besides, knowledge sharing was
another important variable that integrates team creativity and improved motivation practices.
Park et al. (2015) provide a relationship between organizational creativity and HRM
practices. The congruency of communicating various messages shared through HRM practices
following the formality and the informality in response integrated through learning goal
management of CEO was investigated to identify level of growth in organizational creativity.
Organizational creativity depends on the extent to which knowledge is shared. It further depends
upon the maximum learning goal management of CEOs. However, no significant relationship
was identified between organizational creativity and reward system.
2.3.4 Implications of HRM in Affecting Creativity
8. Creativity and innovation are the misunderstood terms in most of the literary studies, as
stated by Zennouche, Zhang & Wang (2014) in their study. According to the study, creativity is
related to the innovative ideas related to the production, process and organizational practices.
Whereas, innovation refers to the process through which novel ideas are gathered, scrutinized,
modified and then implemented in any process. Creativity helps in analyzing the need of
introducing development changes. Innovation on the other hand, helps in assessing the need and
importance of creativity. To maintain the standard bar, organizations are often expected to
provide valuable consideration towards the two ideas that is reflected in the working patterns of
an organization. The study conducted by Jiang, Wang & Zhao (2012) is highly important in
analyzing the effectiveness of management practices in developing a significant impact over
organizational innovation and employee creativity. Employee creativity is completely mediated
among the give four HRM practices along with organizational innovation. Results finally
concluded that HRM practices are important in promoting creativity and innovation in different
organizations.
Song, Gu & Wang (2019) discussed similar idea with an aim to provide the extent to
which HRM system is oriented to creativity. Role of innovative culture was also examined in this
regard. The study has indicated three important dimensions that help in the development of
creativity oriented HRM system. The dimensions include creative practices that are important to
enhance individual skills, motivational activities, along with employee empowerment. The
association between firm performance and creativity-innovation was studied by Heller &
Weisberg (2018) in their study. The idea was examined by providing a significant consideration
towards the role of strategic HRM practices in providing maximum contribution in initiating
innovativeness and creativity in the work environment, while analyzing its impact on firm
9. performance. HRM value commitment fosters the element of creativity in every employee which
is further processed into innovative. This helps in generating a constructive climate that promotes
employees’ knowledge sharing behavior. Organization must provide significant efforts in
developing an atmosphere that encourages creativity-performance relationships between
different employees. The factor is significant in modifying the organizational environment; also
it helps in meeting the modern needs of dynamic businesses.
Elia et al. (2017) discussed the idea in the light of the corporate entrepreneurship (CE)
that serves as an important process that in significant in creating a dominant impact over various
individuals. The success of CE is highly dependent on variables, that incudes various
organizational, psychological and professional characteristics that in combination form an
organization that incorporate essential values of management practices. Creativity and
innovation are the most commonly discussed factors that serve as the base of organizational
success. The factors are important as to provide and ensures long term success of firms (Liu et al.
2017). The phenomenon related to innovation and creativity have been considerably discussed,
still many researchers are initiated for further developments within the given area ranging from
micro to macro organizational factors. Colakoglu et al. (2019) conducted a study in similar
perspectives which aimed to provide a broader perspective of creativity and innovation and its
understanding at both individual and firm level. The study further indicates that organization
with strong HRM system is highly successful in sustaining the ambidexterity learning in an
organization. Role of HRM support is crucial here. Prieto-Pastor & Martin-Perez (2015)
conducted a field study in 182 firms of Spain and indicated that maximum involvement of HR
systems help in attaining the goal of ambidexterity learning.
10. Sue‐Chan & Hempel (2016) discussed the relationship between creativity and employee
performance. The study discussed an important idea, where creativity needs motivation that can
be stimulated through rewards and employee’s performance recognition. The study has indicated
that high level of perceived reward helps in improving the association between novelty and
performance. However, the factor was not sustainable in enhancing the relationship between
employee performance and usefulness. The valuable association between HRM and
organizational innovativeness improves firms’ performances. Akram et al. (2017) provided a
deeper understanding in this regard, by illustrating the relationship in the light role of
organizational learning. The study has illustrated a positive relationship between all the three
variables including HRM, organizational innovativeness and learning. Organizational learning
served as the mediating factor between HRM practices and organizational innovativeness. No
organization can prosper only through the developed relationship, without evolving an
environment of organizational learning (Raj & Srivastava. 2013) Therefore, organizational
success lies behind the idea where, organizational learning is integrated through a specific set of
HRM practices and thus includes innovation.
2.4 Gap in Study
Several studies have been conducted regarding the role of Human Resource Management
in contributing towards the improved organizational performance. As apparent from the above
studies, that most of the researches evaluated the idea in a generalized manner, while providing
firm focus to HRM practices and their role. This determines the gap found in previous studies, as
the idea did not focus on the strategies of HRM practices that may be employed to improve the
overall mechanism of organizations. Studies that were conducted in both eastern and western
11. firms were included in the given section to extract the common HRM practices. This is further
helpful in analyzing the gaps in HRM practices in different companies around the globe.
The study is important in illustrating various barriers that limit HRM practices to ensure
maximum output in the form of employee creativity. Several factors including; employee
recognition, reward system, knowledge sharing attitude etc. were identified as the key
determinants in motivating employees towards creative measures. The study is highly important
for various firms, as the information shared in the study is of greater interest in improving firms’
performances. Human Resource departments in different firms along with policy makers can
equally benefit from the study, as this would help them in formulating useful policies that may
positively influence employees working pattern and creativity levels. It is further helpful for
employees working in different organizations, as the study is competitive in enabling them to
identify the lacking found in the HRM practices of the representative company. Despite of the
availability of abundant literature, the study provides an important contribution in the given field
through its concrete and detailed information.
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