Creativity and Innovation in Human Resource Management

With the advent of globalisation era in India since 1990-91, the Indian organisations have felt an urgent need of including creativity and innovation in all spheres of management including Human resource management. The role of HR has increased manifold in the present day organisations (as today’s economy is knowledge economy) but it was not an easy path to tread. What we call the “human Capital” today was named with various terms as ‘employees’, ‘personnel’ and ‘human resources’ during different eras. Finally we have reached an era where our ‘employees’ have come to be known as ‘capital’ for the organisation. Simultaneously, the role of human resource department has also seen a sea change from merely managing industrial relations to personnel management to human resource management and now functioning as strategic human resource management. Though in economics we had realised the importance of our employees and had given them a place in major factors necessary for production, but still they were not recognised as partners or stakeholders of a firm. It is now that we accept that the role HR, as a department and as a function, plays in any organisation is far more crucial and imperative than any other unit or function operating within the firm. And we proudly admit that human resources or human capital is necessary for an organisation to gain competitive advantage and sustain it.
Therefore a resource (including human resources) must fulfil four criteria to contribute for sustained competitive advantage in a firm. These are:
1. They must add positive value to the firm.
2. They must be unique and rare among current and potential competitors.
3. They must be imperfectly imitable.
4. They cannot be substituted with any other resource by competing firms.
Since the human resources of any organisation have the competence and efficiency to make the firm achieve sustained competitive advantage, they must be managed carefully. For this, many companies across sectors are focusing on some of the more critical HR practices to achieve creativity and innovation in the ways human resources must be managed in a firm. Some of the trends that have been noticed are: Leadership development, Work-life balance, Diversity management and inclusion, Ensuring Health and well-being of employees, Providing right skills, Providing instant rewards, Managing the solid citizens, Managing aspirations of employees, Feedback processing etc.
Therefore the companies who are able to imbibe creativity and innovation in their climate, culture and practices are able to achieve competitive advantage and sustain it too.