HRM FOR CONTINUOUS IMPROVEMENT 363

Human Resource Management for

Continuous Improvement
Frances Jørgensen, Bjørge Timenes Laugen and
Harry Boer

This paper investigates the relationship between HRM practices and Continuous Improve-
ment (CI) activities in order to gain an understanding of how the HRM function may be
utilized to improve CI implementation success, and consequently, company performance. The
paper begins with a brief review of the HRM and CI literature and then presents statistical
analyses of data collected from the Continuous Improvement Network Survey (2003), which
demonstrate that HRM has a significant effect on CI behaviour and company performance,
with the strongest relationship between HRM, CI and performance occurring when companies
align their CI activities with their strategic objectives and use systems, procedures and pro-
cesses to measure the results of their CI activities.

Introduction CI tend to have higher levels of CI maturity,

but this and other studies stop short of identi-

I t is widely agreed that successful imple-

mentation of Continuous Improvement (CI)
depends a great deal on involving members of
the organization at all levels. However, there is
surprisingly little literature on the human
aspects of CI. As Human Resource Manage-
ment (HRM) is generally associated with
recruiting and hiring people with the appro-
priate knowledge and skills to accomplish the
work tasks, it seems logical that HRM would
also be involved with CI, at least in terms of
securing a workforce capable of implementing
CI. Moreover, since HRM often participates in
the planning of employee training and devel-
opment, companies should be able to capital-
ize on this function to continuously enhance
individual and organizational CI capability.
At present, there is little evidence that com-
panies are aware of the importance of the HRM
function for their CI efforts and/or how to
realize the potential contribution of HRM to CI
efforts in practice (Jørgensen & Hyland, 2007).
One difficulty companies may face when
attempting to support CI through HRM prac-
tices is in knowing which practices yield the
greatest benefit in terms of CI development
and, consequently, performance (Jørgensen &
Hyland, 2007). A recent study conducted
by Hyland et al. (forthcoming) indicates that
companies involving the HRM department in
fying the capacity in which HRM is involved.
Consequently, little is known regarding the
types of employee behaviours that are influ-
enced by HRM involvement or whether spe-
cific HRM practices have a greater or lesser
influence on CI implementation, practices and
performance. Thus, there is still much to
learn about the role particular HRM mecha-
nisms might play in CI development efforts
aimed at achieving improved organizational
performance.
The aim of this paper, then, is to identify
whether HRM-related practices are associated
with successful CI implementation and if so, to
what degree. In the next section, the literature
on CI is reviewed to develop a better under-
standing of the types of knowledge, skills and
behaviours considered necessary for success-
ful CI implementation. Next, a brief introduc-
tion to HRM provides a general foundation for
exploring the areas in which HRM could
potentially be exploited to support CI. There-
after, the results of statistical analyses of data
derived from the 2nd Continuous Improve-
ment Network (CINet) Survey (2003) are
presented and discussed for the purpose
of identifying relationships between HRM-
related practices, CI activities and perfor-
mance effects. The paper concludes with
specific recommendations for integrating

© 2007 The Authors Volume 16 Number 4 2007

Journal compilation © 2007 Blackwell Publishing doi:10.1111/j.1467-8691.2007.00452.x
364
HRM practices with CI activities that have
demonstrated positive influences on company
performance as well as directions for further
research aimed at providing more insight into
the role of HRM in supporting CI.
Continuous Improvement and
Performance
The term Continuous Improvement (CI) is
used to refer to an organization-wide change
initiative consisting of incremental improve-
ments planned and implemented with exist-
ing resources (Boer et al., 2000). Ultimately, the
reason companies implement CI is to improve
their performance. Although it has long been
assumed that successful CI implementation
would affect various measures of company
performance, there has been little empirical
evidence to support a causal link between the
two. Recently, however, statistical analyses of
data from the 2nd CINet Survey revealed sig-
nificant relationships between CI behaviours
and the organization’s overall performance
(Jørgensen, Boer & Laugen, 2006). Generally, it
was shown that increased CI activity increases
overall company performance and, specifi-
cally, these three measures of performance:
• Speed/cost performance, including pro-
ductivity, volume, lead time and reliability.
• Relationship performance, including inter-
departmental, customer and supplier rela-
tions and performance.
• Organizational performance, including
employee commitment and attitudes
towards change, absenteeism, safety and
well-being, organization, cooperation and
communication, competency and skill
development, and administrative routines.
Of these performance measures, organiza-
tional performance was shown to be most
strongly affected by increased adoption of CI
behaviours. In addition, the results of these
analyses suggest that behaviours that seek to
align the company’s strategic objectives with
CI goals and the continued development of CI
within the organization (i.e., strategic manage-
ment of CI development) appear to have the
strongest impact on speed/cost and organiza-
tional performance.
These findings highlight a number of
important issues regarding successful CI
implementation. Most importantly, that CI
implementation does in fact positively influ-
ence company performance. Specifically, these
results emphasize the need for employees to
have a thorough working knowledge of CI and
their own role in supporting the company’s
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CREATIVITY AND INNOVATION MANAGEMENT
strategic objectives through CI. However, a
number of researchers have described how
failure to fully understand CI may serve as a
barrier to successful CI implementation (e.g.,
Schroeder & Robinson, 1991; Boer et al., 2000;
Jørgensen, 2003), indicating that organizations
may not orientate their employees well in this
regard. Thus organizations may fail to realize
performance improvement with CI. Another
barrier to successful CI implementation men-
tioned in the literature involves the necessary
skills and abilities employees must possess.
Jørgensen, Nielsen and Kofoed (2005) suggest
that sets of competencies can be described for
both shopfloor employees and middle manag-
ers, including the use of CI tools (e.g., fishbone
analysis, PDCA cycle); CI knowledge (as
described above); project management (e.g.,
running effective meetings, planning and goal
setting); team skills (e.g., conflict resolution,
communication); and, leadership (primarily
for managers). Furthermore, several personal
attributes such as motivation, high energy
levels and inspiration (i.e., ability to see oppor-
tunities) have been identified as being condu-
cive to successful CI implementation. Bessant
and Caffyn (1997) describe a number of indi-
vidual, group and organizational CI capabili-
ties that are consistent with the competencies
listed here, with the addition of behavioural
routines associated with learning, cross-
functional cooperation and organizational
culture. Providing the organization with these
competencies, in addition to supporting
mechanisms to ensure their application, may
easily be construed as partially or wholly
within the realm of the HRM function, which
is described in the following section.
Human Resource Management
The role of HRM can be viewed as encompass-
ing little more than the most basic functions of
personnel management such as recruitment,
selection, training and perhaps labour negotia-
tor to a critical strategic ally (Storey, 1992;
Guest, 1997). One issue that complicates defin-
ing HRM and the functions for which HRM is
responsible concerns the increasing decen-
tralization or devolution of practices related to
obtaining, training, developing, maintaining
and sustaining a competent workforce (Hoo-
gendoorn & Brewster, 1992; Brewster & Sod-
erstrom, 1994). For the purposes of this paper,
it is not especially relevant to consider who
fulfils these functions, but rather how particu-
lar practices could support CI. Therefore, a
somewhat broad definition of HRM is consid-
ered preferable, such as that offered by Beer
et al. (1984, p. 1) as ‘all management decisions
© 2007 The Authors
Journal compilation © 2007 Blackwell Publishing
HRM FOR CONTINUOUS IMPROVEMENT
and activities that affect the nature of the rela-
tionship between the organization and its
employees – the human resources’. Such a
definition of HRM would ostensibly include
the design and organization of tasks (e.g.,
job rotation, enrichment, multitasking, group
work, quality); staffing (e.g., recruitment,
assessment, selection, introduction, career
development, education and training, termina-
tion, outplacement, retirement); performance
measurement and compensation (appraisal,
job evaluation, bonuses, employee ownership);
and the channels for communication (e.g., per-
formance feedback) and participation in work
and decision making (participation, leader-
ship, information and communication).
Further, Beer et al. (1984) contend that HRM
can and must strive to positively influence the
development of the organizational context as a
whole, which is consistent with the under-
standing of CI as a philosophy for change,
rather than simply an isolated change initia-
tive. Indeed, a number of studies have sup-
ported the notion that HRM can support
organizational development, for example
through encouraging learning and the estab-
lishment of learning environments conducive
to change and development (e.g., Pearn,
Roderick & Mulrooney, 1995; Walton, 1999;
Langbert & Friedman, 2002; Maxwell,
Quail & Watson, 2002; Laursen & Foss, 2003).
However, although the economic and orga-
nizational benefits of utilizing the HRM func-
tion to enhance performance and support
organizational change and development have
been consistently demonstrated for several
decades (e.g., Arthur, 1994; Becker & Gerhart,
1996; Wright, Gardner & Moynihan, 2003), the
mechanisms and processes by which this
occurs are not fully understood (Purcell et al.,
2000). According to the resource-based
approach to HRM (e.g., Barney, 1995), perfor-
mance is enhanced through alignment of
resources – both human and non-human –
with business objectives. Guest (1997) devel-
oped a model that illustrates the link between
HRM and business performance through
strategic alignment (e.g., differentiation/
innovation, low cost). The general premise
underlying these models is that, when linked
to the organizational strategy, certain HRM
practices, such as selection, training, appraisal,
compensation, job design and employee
involvement, lead to effects (e.g., motivation,
commitment, cooperation, involvement, flex-
ibility, organizational citizenship, reduced
turnover and absenteeism) that in turn result
in positive business outcomes in the form of
increased productivity, quality, profit and cus-
tomer satisfaction (e.g., Arthur, 1994; Becker &
Gerhart, 1996; Wright, Gardner & Moynihan,
© 2007 The Authors
Journal compilation © 2007 Blackwell Publishing
365
2003). Thus it appears that HRM has the poten-
tial to exert a positive influence on perfor-
mance at individual and group level through
a variety of mechanisms (e.g., recruitment,
support of learning and development, com-
pensation and rewards, job design). In
addition, de Leede and Looise (2005) and Jør-
gensen, Hyland and Kofoed (forthcoming)
suggest that HRM may potentially influence
the organization as a whole, via systems,
procedures and processes that support
organizational development. These types of
mechanisms would include, for example,
resource allocation, top management support,
organization-wide deployment of learning,
strategically-aligned performance systems,
and structures that integrate the organiza-
tional strategy with operational practices.
The Role of HRM in CI
From this line of reasoning, business perfor-
mance should improve through alignment of
the organization’s HRM function with its CI
strategy. There are indications that increased
CI activity is associated with HRM involve-
ment in the implementation of CI (Hyland
et al., forthcoming), but the precise nature of
this relationship is unknown. Specifically, it is
not known which HRM practices are most
beneficial in increasing CI activity nor how
HRM practices aimed at supporting CI may
influence performance. The question investi-
gated in this article therefore is: ‘How and to
what extent do HRM-related practices affect
business performance through CI?’.
The items and responses to the 2003 Con-
tinuous Innovation Network Survey (see next
section for details) were used to further refine
the research question and to formulate two
working hypotheses to direct the analyses. The
first hypothesis assumes HRM-related prac-
tices will indeed positively affect CI activity, as
suggested by Hyland et al. (forthcoming) and
Jørgensen, Boer and Laugen (2006), and in
doing so, have a positive effect on business
performance (e.g., Boer et al., 2000), which in
this paper is defined according to three vari-
ables, namely: speed/cost performance, rela-
tionship performance and organizational
performance, as described previously and in
Jørgensen, Boer and Laugen (2006).
H1: HRM-related practices have a positive
effect on CI behaviours and, through that, busi-
ness performance.
Previous research on CI (e.g., Boer et al., 2000)
has identified a number of potential barriers to
successful CI implementation. On this basis,
the second hypothesis is formulated as
follows:
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366
H2: CI implementation problems will moderate
the relationships between HRM practices, CI
behaviours and business performance by either
reducing or eliminating positive relationships or
increasing negative relationships between these
three variables.
In the next section, the methodology used to
research these hypotheses is presented.
Methodology
Data Collection
Data for the study were collected from
responses to the 2nd CINet Survey, which was
developed in 2003 by an international research
consortium involving researchers from Aus-
tralia, Denmark, Ireland, Italy, the Nether-
lands, Norway, Hong Kong, Spain, Sweden,
Switzerland and the United Kingdom, and
was administered by the Continuous Innova-
tion Network (CINet). The objective of the
survey was to explore the purposes and prac-
tices of organizations implementing CI-related
activities. Further, the 2nd survey was
intended to gain insight into the evolution of
CI practices during the five year interim since
Table 1. People-Oriented HRM Mechanisms
HRM mechanisms Variable description
People-oriented Job design
Middle management
involvement
Leadership
Middle management
participation
Support of experimentation
Support of learning
Reward system
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CREATIVITY AND INNOVATION MANAGEMENT
the 1st survey (Middel et al., 2004). The survey
tool was conducted as a postal questionnaire
addressing the following: company character-
istics; the structuring and organization of CI;
the mechanisms, procedures, systems and
practices used to support CI; and the perfor-
mance effects of CI. The database comprises
data from 543 manufacturing companies in the
11 countries involved.
Variables and Data Analysis
We feel it is important to clarify the distinction
between HRM mechanisms and CI behaviours
to avoid any confusion in the remainder of this
article. HRM mechanisms concern ‘all man-
agement decisions and activities that affect
the nature of the relationship between the
organization and its employees – the human
resources’ (Beer et al., 1984). Some of these
mechanisms may be focused on CI, but have a
wider impact on, for example, organizational
learning (e.g., introducing a formal CI system
– see Table 1). Others may be more generic, but
in effect create a suitable context that triggers
and/or supports CI behaviours (e.g., manag-
ers support experimentation by not punishing
mistakes, but by encouraging learning from
Items from the questionnaire
Improvement is an integral part of the
individuals’ or groups’ work, not a
parallel activity
Managers accept and, where necessary,
act on all the learning that takes place
Managers at all levels display
leadership and active commitment to
ongoing improvement
Managers lead by example, becoming
actively involved in the design and
implementation of systematic
ongoing improvement
Managers support experimentation by
not punishing mistakes, but by
encouraging learning from them
The organization articulates and
consolidates (captures and shares) the
learning of individuals and groups
The organization recognizes in formal
but not necessarily financial ways the
contribution of employees to
Continuous Improvement
© 2007 The Authors
Journal compilation © 2007 Blackwell Publishing
HRM FOR CONTINUOUS IMPROVEMENT
Table 2. Organization-Oriented HRM Mechanisms
Mechanisms Variable description
Organization-oriented Formal improvement
system
Deployment of learning
Monitoring and
measurement system
Resource allocation
Improvement system
maintenance
Top management support
them – see Table 1). CI behaviours concern all
activities performed as part of an organiza-
tion’s attempts to continuously improve its
operations and, through that, its performance.
In our analysis, first a total of 13 HRM
mechanisms were identified in the question-
naire (see Tables 1 and 2), using Beer’s (1984)
definition and previous work by Jørgensen
and Hyland (2007). Then, 20 CI behaviours
were identified from the survey items on the
basis of descriptions offered by Bessant &
Caffyn (1997) (see Table 4).
Based on a theoretical assessment of
the target of the HRM mechanisms, the 13
HRM mechanisms were grouped into
two factors, people-oriented mechanisms
and organization-oriented mechanisms. In
essence, this categorization differentiates
between HRM-related decisions and actions
that were intended to impact the individuals
and groups within the organization (see
Table 1) and more system-wide intended
HRM mechanisms (see Table 2). Because the
distinction was made before the construction
of the questionnaire and hence was not
embedded in the items of the questionnaire, it
© 2007 The Authors
Journal compilation © 2007 Blackwell Publishing
367
Items from the questionnaire
A Continuous Improvement (CI) or
equivalent formal improvement
system (e.g. Total Productive
Maintenance) has been introduced to
involve all employees in ongoing
improvement
Appropriate organizational mechanisms
are used to deploy what has been
learned across the organization
Improvement activities and results are
continually monitored and measured
Managers support improvement
processes by allocating sufficient
time, money, space and other
resources
Ongoing assessment ensures that the
organization’s processes, structure
and systems consistently support and
reinforce improvement activities
Senior management make available
sufficient resources (time, money,
personnel) to support the continuing
development of the company’s
improvement system
was delineated between the mechanisms on
the basis of theoretical assessment, i.e. the
authors’ judgements of the degree to which
the mechanisms targeted individuals and
groups or were more system-wide. Using
SPSS13, a regression analysis was then
performed to investigate the relationship
between these two groups of HRM mecha-
nisms (independent variables) and the 20 CI
behaviours.
A second regression analysis was per-
formed to investigate the relationship between
the 20 CI behaviours (independent variable)
and 16 indicators of performance improve-
ment (dependent variables) also identified
from items on the questionnaire. As previously
described, the performance indicators were
grouped into three factors based on a
factor analysis with a Varimax rotation (see
Jørgensen, Boer & Laugen, 2006). To exclude
relationships with a poor level of significance,
the regression was performed stepwise.
To study the second hypothesis, 11 imple-
mentation problems identified in the literature
(e.g., Bessant & Caffyn, 1997; Boer et al., 2000)
and included in the questionnaire were
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368 CREATIVITY AND INNOVATION MANAGEMENT

Table 3. Results of Factor Analysis of CI Implementation Problems

Factor Variable Variable Factor Factor

(CI implementation average* loading average*
problems)

Lack of leadership Culture not supportive of improvement 2.94 0.802 3.086

Insufficient worker commitment 3.03 0.739
Insufficient management commitment 3.28 0.667
Lack of clarity or ambiguity in goals 3.13 0.565
Insufficient performance measures 3.03 0.531
Insufficient support/facilitation 3.10 0.505
Lack of knowledge Insufficient training facilities 3.05 0.800 3.047
Insufficient information 3.09 0.763
Insufficient knowledge/capabilities/ 3.01 0.752
experience
Lack of resources Insufficient time 2.02 0.797 2.384
Insufficient budget 2.74 0.710

* Scale: 1 = very frequently, 5 = very rarely.

divided into three groups (see Table 3)
through a factor analysis with a Varimax rota-
tion. Next, the moderating effects of these
implementation problems on the relationships
between the HRM mechanisms and the CI
behaviours (Table 4) and the relationships
between CI behaviours and performance
improvement (Table 5) were measured.
Results
Table 41 shows the effects of HRM mecha-
nisms on CI behaviours and the impact of the
three groups of implementation problems on
these relationships.
Organization-Oriented Mechanisms and
CI Behaviours
Of the organization-oriented HRM mecha-
nisms, the strongest relationship was found
with CI behaviours that involve employees
measuring the success of their CI activities
(b = 1.12, p < 0.01, R2 = 0.559). The strength of
this relationship is significantly reduced by
lack of leadership, one of the expected barriers
in the implementation process (b = -1.08),
while lack of knowledge or resources, two
other potential barriers, does not have signifi-
cant moderating effects.
1
Three CI behaviours that are not significantly
influenced by HRM practices have been excluded
from the table.
The organization-oriented HRM mecha-
nisms also have a strong impact on the behav-
iours linking improvements to organizational
strategy (b = 0.88, p < 0.01, R2 = 0.469) and
responding to ideas (b = 0.88, p < 0.01,
R2 = 0.494). Lack of leadership (b = -0.97)
significantly reduces these relationships;
however, lack of knowledge appears to
increase the strength of these relationships.
Further, organizational HRM mechanisms
have a positive relationship with CI behav-
iours involving learning from experience,
understanding goals, sharing learning, mea-
suring the CI process, broad involvement, and
implementing improvements with customers.
Lack of resources reduces the positive effect
of organizational mechanisms on doing CI
collaboratively with customers.
People-Oriented Mechanisms and
CI Behaviours
The people-oriented HRM functions have the
strongest influence on the following CI behav-
iours: employees seeking opportunities for
learning and development (b = 0.96, p < 0.01,
R2 = 0.416), explaining failures by looking
for causes rather than blaming individuals
(b = 0.78, p < 0.01, R2 = 0.373) and process own-
ership (b = 0.77, p < 0.01, R2 = 0.410). None of
these relationships is significantly moderated
by implementation problems.
People-oriented HRM mechanisms also
have a significant positive effect on CI behav-
iours related to worker participation, incorpo-
ration of learning, customer orientation, use of

© 2007 The Authors

Volume 16 Number 4 2007 Journal compilation © 2007 Blackwell Publishing
 Table 4. Results of the Regression Analysis of the Relationships between HRM Mechanisms (Independent Variables) and CI Behaviours (Dependent Variables), and
the Influence of Implementation Problems

CI mechanisms/ Continuous Improvement behaviours

Moderating

© 2007 The Authors

variables
(implementation Align CI Learn from Understand Respond Share Measure Seek Participate Incorporate
problems) to strategy experience goals to ideas learning results opportunities in CI learning

(Constant) * *** ** *** *** * ***

Mechanisms – Organizational 0.88*** 0.51* 0.68** 0.88*** 0.82*** 1.12*** -0.39 0.27 0.00
Leadership -0.46 -0.58* -0.77** -0.97*** -0.33 -1.08*** 0.52 -0.28 0.32
Knowledge 0.22 0.39 0.70** 0.58** -0.17 0.42 -0.06 0.40 -0.37

Journal compilation © 2007 Blackwell Publishing

Resources -0.23 -0.02 -0.20 0.13 0.06 0.09 0.17 0.10 0.37*
Mechanisms – People -0.16 0.11 0.04 -0.14 -0.09 -0.36*** 0.96*** 0.48** 0.76***
Leadership 0.42 0.55* 0.79*** 0.92*** 0.39 1.06* -0.36 0.35 -0.31
HRM FOR CONTINUOUS IMPROVEMENT

Knowledge -0.18 -0.44 -0.82*** -0.58** 0.11 -0.41 -0.02 -0.46 0.32
Resources 0.22 0.13 0.22 -0.14 -0.04 -0.09 -0.15 -0.09 -0.33
R2 0.469 0.378 0.429 0.494 0.512 0.559 0.416 0.559 0.563
F 31.573 21.700 26.769 35.028 37.498 45.236 25.483 45.090 45.654
Sig 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

CI mechanisms/ Continuous Improvement behaviours

Moderating
variables
(implementation Customer Formal Felt Use Use Broad Improvement Make Explain
problems) oriented problem process improvement measurement involvement with customers system failures
solving ownership tools process adjustments

(Constant) *** *** *** ***

Mechanisms – Organizational 0.05 0.23 -0.09 0.28 0.44* 0.45* 0.82*** 0.12 -0.04
Leadership 0.25 0.26 0.29 0.21 -0.19 -0.31 -0.06 -0.38 -0.37
Knowledge -0.21 0.15 -0.04 0.06 0.14 0.35 -0.22 0.39 0.48
Resource 0.26 -0.20 0.08 -0.06 0.18 -0.05 -0.49** 0.30 0.09
Mechanisms – People 0.72*** 0.48** 0.77*** 0.45** 0.14 0.26 -0.07 0.58** 0.78***
Leadership -0.23 -0.24 -0.31 -0.13 0.26 0.38 0.09 0.32 0.21
Knowledge 0.13 -0.20 0.08 -0.11 -0.04 -0.42 0.18 -0.37 -0.50
Resource -0.24 0.24 -0.12 0.11 -0.18 0.05 0.36 -0.29 -0.17
R2 0.534 0.486 0.410 0.586 0.466 0.492 0.436 0.463 0.373
F 40.697 33.234 24.749 50.320 30.964 34.280 27.524 30.157 21.119
Sig 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000

Volume 16
Significance levels: *** p < 0.01, ** p < 0.05, * p < 0.1.

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Table 5. Results of the Regression Analysis of the Relationships between CI Behaviours (Independent Variables) and Performance Dimensions (Dependent Variables),
and the Influence of Implementation Problems

2007
Performance/Moderating variables
(implementation problems)

Speed/ Leadership Knowledge Resources Relationship Leadership Knowledge Resources Organization Leadership Knowledge Resources
Cost

Constant *** *** ***

CI Strategic 0.731** -0.405 -0.169 -0.257 0.221 -0.330 0.275
behaviours alignment
Respond 0.522** -0.271 -0.307 0.708*** -0.520* -0.269
to ideas
Work 0.460* 0.232 -0.851***
across
divisions
Share 0.817*** -0.729** 0.469 -0.926*** 0.516*
learning
Measure 0.672* -0.225 -0.524* 0.233 -0.230 0.486 -0.763** 0.260
results
Seek -0.408** 0.418* -0.280 0.505 -0.439 0.212
opportunities
Worker -0.890*** 0.238 0.871*** -0.205 -0.407 0.395 0.449 -0.459
participation
Customer -0.644** 0.869*** -0.527* 0.114
oriented
Process 0.601** -0.422 -0.189 0.403 -0.783** 0.160 0.307
ownership
System 0.822*** -0.772***
adjustments

© 2007 The Authors

Customer -0.177 0.517** -0.256 -0.738*** 0.152 0.600 -0.115
feedback
Explain -0.679*** 0.607**
failures
R2 0.169 0.162 0.212
F 2.800 2.862 2.668
Sig 0.000 0.000 0.000

Significance levels: *** p < 0.01, ** p < 0.05, * p < 0.1.

Journal compilation © 2007 Blackwell Publishing

CREATIVITY AND INNOVATION MANAGEMENT
HRM FOR CONTINUOUS IMPROVEMENT
formal problem solving and improvement
tools and making adjustments to the CI
system. Again, none of these relationships is
significantly moderated by implementation
problems.
A quite strong negative relationship is
found between people-oriented HRM mecha-
nisms and the CI behaviours associated with
measuring the results of the CI activities
(b = -0.36, p < 0.01, R2 = 0.559). Lack of leader-
ship appears to aggravate that effect.
CI Behaviours and Performance
The next step in the analysis concerned the
effects of CI behaviours on performance. The
results, summarized in Table 5,2 show that
focusing the CI activities on company strategy
has a significant and positive impact on
speed/cost performance (b = 0.731, p < 0.05).
Further, there is an indication (p < 0.1) that
measuring results of CI activities has a posi-
tive influence on speed/cost performance
(b = 0.672) as well. This relationship is signifi-
cantly reduced by lack of resources during
implementation (b = -0.524, p < 0.1). Customer
orientation has a negative relationship with
improving speed/cost performance (b =
-0.644, p < 0.05). The strength of this relation-
ship is increased by lack of leadership
(b = 0.869, p < 0.01) and reduced by lack of
knowledge (b = -0.527, p < 0.1).
Sharing of learning (b = 0.817, p < 0.01),
feeling process ownership (b = 0.601, p < 0.05)
and responding to ideas (b = 0.522, p < 0.05)
are all positively and significantly related to
increasing relationship performance (i.e. rela-
tionships with customers, suppliers and other
departments, customer satisfaction and quality
conformance). In addition, the findings
indicate that there is a positive relationship
between working across divisions and rela-
tionship performance. Work participation
(b = -0.890, p < 0.01) and seeking opportuni-
ties for learning and development (b = 0.408,
p < 0.05) are negatively related to relationship
performance.
Adjusting the improvement system (b =
0.822, p < 0.01) and responding to ideas
(b = 0.708, p < 0.01) are strongly related to
organizational performance, while explana-
tion of failures (b = -0.679, p < 0.01) is nega-
tively related to this performance measure.
2
Only CI behaviours that have a significant impact
on company performance are included in the table.
© 2007 The Authors
Journal compilation © 2007 Blackwell Publishing
371
Discussion
HRM Mechanisms and CI Behaviour
In general, the first part of the analysis of
hypothesis H1 produced several positive
relationships between the use of HRM mecha-
nisms and CI behaviours. The organization-
oriented HRM mechanisms appear to increase
the following CI activities:
• Understanding of strategic goals
• Alignment of CI activities with strategic
goals
• Responding to improvement ideas
• Learning from experience with CI activities
• Sharing of learning from CI activities
• Measuring CI processes
• Measuring CI results
• Broad employee involvement
• Customer-involvement in CI activities.
The people-oriented HRM mechanisms increase
the following CI behaviours:
• Seeking opportunities for training and
development
• Explaining failures without blaming
individuals
• Feeling ownership for the CI process
• Customer-oriented behaviours
• The incorporation of learning into work
processes
• Worker participation
• Using formal problem solving tools and
techniques
• Using improvement tools
• Making adjustments to the improvement
system.
Only one negative relationship was found,
namely between people-oriented HRM
mechanisms and measurement of CI results.
This is somewhat surprising, as the CI litera-
ture emphasizes the need for systems and pro-
cesses to measure CI results. Further, two of
the 20 CI behaviours investigated, namely
working across divisions and customer feed-
back, are not affected by any of the HRM
mechanisms. Both of these behaviours do,
however, affect performance, as the next
subsection will show.
These findings suggest that HRM mecha-
nisms (exercised by the HRM function and/or
(other) managers in the organization) make a
difference and have a generally positive influ-
ence on the development of CI in organiza-
tions. More interesting, perhaps, is the find-
ing that organization-oriented and people-
oriented HRM mechanisms affect different CI
behaviours. In fact, only one CI behaviour is
influenced by both types of mechanism.
Volume 16 Number 4 2007
372
CI Behaviours and Performance Effects
This part of the analysis of hypothesis H1 pro-
duced some expected but also some rather dis-
turbing results. The survey data show that
organizations that align their CI activities with
their strategy and objectives and measure
the results of CI activities realize improve-
ments in speed/cost performance. This should
be expected as both behaviours support
the pursuit of goal-directed performance.
However, speed/cost is affected negatively
by customer orientation. Apparently, many
companies still experience the relationship
between customer orientation and speed/cost
performance as a trade-off. Not surprisingly,
lack of leadership aggravates that situation.
Responding to ideas, sharing of learning,
working across divisions and process owner-
ship are all positively related to relational
performance, while that performance area is
affected negatively by behaviours related to
worker participation and seeking opportuni-
ties for training and development, respec-
tively. An explanation for the negative impact
of participation, which is strongly aggravated
by lack of knowledge, could be that this does
increase the workers’ local understanding of,
commitment to and involvement in CI, but
decreases the time and energy they have avail-
able for coping with more global issues,
including relationships with (internal and
external) customers and suppliers. The fact
that lack of resources increases the negative
impact of seeking training and development
opportunities could explain why employees
may be more interested in their own goal
fulfilment than in contributing to successful
relationships with others.
Finally, organizational performance is
affected positively by behaviours associated
with responding to ideas and making system
adjustments, respectively, while customer
feedback and explaining the causes of failures
have a negative influence. The latter relation-
ship is aggravated by lack of leadership. This
finding is not only unexpected, but also quite
disturbing, as this is most certainly not the
desired effect of this behaviour. Thus, this
finding begs further exploration.
An overall explanation for the unexpected
findings reported above relates to what has
been referred to as discretionary effort, or the
seemingly personal choices employees appear
to make with respect to how they will use their
time and effort at work (Delbridge, 1998).
Implementation problems related to lack of
leadership, knowledge or resources were
shown to aggravate four of the five negative
relationships. Perhaps, however, these prob-
lems play a more direct role than expected,
Volume 16 Number 4 2007
CREATIVITY AND INNOVATION MANAGEMENT
and actually create a situation in which
employees involved in CI are forced to decide
themselves (lack of leadership) on how to pri-
oritize their time and efforts (lack of resources)
and elect to participate in some activities while
choosing not to participate in others, especially
those outside their immediate scope (lack of
knowledge).
Implementation Problems
Hypothesis H2 concerns the impact of imple-
mentation problems, some of which have
already been touched upon in the previous
subsection.
The findings reported here confirm that if a
relationship between HRM mechanisms and
CI behaviour is affected by implementation
problems, these problems generally reduce
the strength of the positive relationships and
aggravate the strength of most of the negative
relationships. In fact, there were only three
exceptions to this: lack of knowledge has a
positive effect on the relationships between:
• organizational HRM mechanisms and
employees’ understanding of goals
• organizational HRM mechanisms and
responding to improvement ideas
• customer orientation and speed/cost
performance.
These findings are surprising and warrant
further investigation.
Also, the finding that implementation prob-
lems are significantly related to only a very
few of the relationships between the HRM
mechanisms and the CI behaviours is worth
further study. A somewhat optimistic explana-
tion may be that the HRM mechanisms allevi-
ate the consequences that the problems would
otherwise cause for the implementation;
however, this explanation is based solely on
conjecture. Finally, the possibility indicated
previously – that implementation problems
play a more direct role and thus create prob-
lems for employees attempting to achieve
multiple performance objectives – needs
further research.
Managerial Implications
Figure 1 summarizes the cumulative findings
and shows:
• All but two of the 20 HRM mechanisms
studied affect CI behaviour.
• One of the remaining 18 mechanisms has a
negative effect; 17 a positive influence.
Thus it seems clear that HRM makes a differ-
ence when it comes to implementing CI in
© 2007 The Authors
Journal compilation © 2007 Blackwell Publishing
HRM FOR CONTINUOUS IMPROVEMENT 373

Measuring CI results

Aligning CI activities with Seeking opportunities for

strategic goals training and development
Speed/cost performance Explaining failures without
Responding to ideas blaming individuals

Sharing of learning Process ownership

Organization-oriented HRM
mechanisms Relational performance
Customer-involvement in CI
Customer orientation
activities
The incorporation of learning People-oriented HRM
Understanding of goals into the work processes mechanisms

Learning from experience Organizational performance

Worker participation

Measurement of CI processes
Formal problem solving

Broad employee involvement

The use of improvement tools.

Making system adjustments

Work across divisions

positive
Customer feedback
negative

Figure 1. Relationships between HRM Mechanisms, CI Behaviours and Performance Effects

organizations. Making the concept actually paper shows that HRM has an important role
work is a different matter. In fact, the effects of in supporting CI and performance improve-
CI activities on performance are somewhat ment through CI.
puzzling. All the CI behaviours that are In general, the analyses indicate numerous
affected positively by organization-oriented strong relationships between mechanisms that
HRM mechanisms have a positive influence on are commonly associated with the HRM func-
business performance. This finding entails a tion and CI behaviours, as well as between
clear message for managers as well: organiza- these CI behaviours and performance improve-
tion is a good starting point on the road towards ment. This suggests that HRM can play an
performance improvement. In contrast, most of important role in supporting CI implementa-
the CI activities that are positively affected by tion. A natural direction for future research
people-oriented HRM mechanisms have a would be to examine these relationships more
negative performance effect. This finding, as closely in order to identify which HRM mecha-
indicated above, warrants further research. If, nisms within each group (i.e., organizational
however, there is some truth to the explanation or people-oriented) account for the largest
offered previously that these findings reflect increases in CI activity and performance.
the impact of lack of leadership, resources and A number of unexpected results were also
knowledge, the message is clear as well: CI discovered during the course of the analyses,
success depends just as much on learning each of which represents directions for further
(knowledge, skills, attitude) as it does on the research. Specifically, it would be quite inter-
availability of resources (time) for workers not esting to look more closely at the potentially
only to perform CI activities, but also to go negative effects of people-oriented HRM
beyond their immediate scope and make the mechanisms and performance effects. A
right choices in doing so, and on leadership to related question concerns the possible impact
support and facilitate workers in their learning of lack of resources, leadership and knowl-
process and in making appropriate choices. edge on the actual improvement choices made
Only then ‘either-or’ choices are prevented and within an organization: do these barriers in
‘both-and’ choices made. fact lead to ‘either-or’ choices? If so, that
finding will hold a major lesson for the
management of Continuous Improvement.
Conclusion
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© 2007 The Authors
Journal compilation © 2007 Blackwell Publishing
HRM FOR CONTINUOUS IMPROVEMENT 375

Frances Jørgensen (fraj@asb.dk) is Associ-

ate Professor at the Department of Manage-
ment, Aarhus School of Business, Aarhus
University, Denmark. She received her MA
in Industrial and Organizational Psychol-
ogy at Middle Tennessee State University,
USA, and her PhD in Change Management
at Aalborg University, Denmark. Dr. Jør-
gensen’s primary research interests are in
the fields of Human Resource Develop-
ment, Organizational Behaviour, and
Change Management, especially from an
employee perspective.
Bjørge Timenes Laugen is an Associate
Professor in the Department of Business
Administration at the University of
Stavanger, Stavanger, Norway. He received
his MSc in engineering in 2000, and his PhD
in innovation management in 2006, both
from Aalborg University, Denmark. His
main research interest is the link between
new product development, production,
strategy, organizational development and
continuous innovation. Dr. Laugen is a
board member of CINet (Continuous Inno-
vation Network), a global network set up to
bring together researchers and industrial-
ists working in the area of continuous
innovation.
Harry Boer is Professor of Organizational
Design and Change at the Center for Indus-
trial Production at Aalborg University. He
holds a BSc in Applied Mathematics and a
MSc and PhD both in Management Engi-
neering. He has (co-)authored numerous
articles and several books on subjects such
as organization theory, flexible automation,
manufacturing strategy, and continuous
improvement/innovation. His current
research interest is in continuous innova-
tion, the effective interaction between day-
to-day operations, incremental change and
radical innovation.

© 2007 The Authors

Journal compilation © 2007 Blackwell Publishing Volume 16 Number 4 2007