Literature Review and Project Specification - Research Paper Example

?The Effect of Innovation on Organizational Recruitment Practices Review of Related Literature Earlier studies in a few disciplines, such as sociology, economics, and management studies, have studied the connection between components of human resources (i.e. recruitment) and technological innovation (Krouse 1997). Generally, the prevalent use of Information and Communication Technology (ICT) has been related to several adjustments in internal organizational processes, like recruitment practices, required employee competencies, job design, organizational structure, and others, focusing on enhancing flexibility. More particularly, different studies prove the connection, practically and theoretically, between the employment influences of organizations’ ICT ventures and the effect of ICT dissemination on organizational factors linked to human resources. Berman and colleagues (2009) identify a growth in mandatory competencies during the 1980s in the sector of manufacturing, which is in part ascribed to the arrival of ICT. Bresnahan and Gambardella (2004) claim that employees and organizations have to implement the application of ICT, and provide empirical proof, at the organizational level, about the connection between the characteristics of the labor force and new recruitment practices. They show that organizations that implement innovation linked to ICT, development of new products or services, and restructuring of work, have a tendency to recruit more skilled employees. Ultimately, Landry and colleagues (2003) analyze the evolving nature of work in the period of technological innovation (i.e. emergence of e-business) and underline major changes in organizational practices, accompanied with a marked transition towards a labor market of adaptable, skilled groups of entrepreneurial workers. It could be that developments in the use of ICT are aggravating the disparity in employability between the rich and poor technology savvies, also referred to as the ‘digital divide’ (Sims 2002). Current investigations highlight the relationships between social inequalities and ICT, their effect on recruitment practices, vocational training, professional competencies, wages, and others. As suggested by Milgrom and Roberts (1990), a business organization can be considered as a structure founded on agreements between each of its parties, comprising its workers. The interdependencies and ties that arise among those parties necessitate prompt information in order to sustain harmony. Furthermore, in competitive, demanding environments, there is an apparent need to initiate changes in the firm toward more resilient practices, where regular job-training and specialization are means (Swart, Mann, Brown & Price 2005). In this situation, technological innovation simplifies the flow and organization of information, giving a needed assistance to the organization. The adjustment of the organizational recruitment practices is hence facilitated, allowing the formation of intricate organizations in the form of a system, in contrast to the former hierarchies founded on centralization, and reassigning an essential function to its workers through decentralization of the process of decision making (Swart et al. 2005). The arrival of innovative practices, and its relation to recruitment methods, has been broadly studied in the scholarly literature at the organizational level, leading to a number of studies of the notion referred to as ‘skill-biased technical change’ (SBTC) (Lawler, Mohrman, Mark & Neilson 2003). SBTC, more particularly, studies how the arrival of new technologies creates a prejudice towards more competent employees, and brings about a comparative boost in the demand for competent employees, because these competent employees are required in order to exploit the innovations appropriately (Lawler et al. 2003). A transformation in recruitment practices will be inclined in support of competent employees, or skill-inclined, if the new competencies are more expensive to obtain than those needed to work with old system, while it will support de-skilling if the new competencies can be obtained at a lesser cost than the knowledge or competencies linked to previous technologies (Swart et al. 2005). Machin and Van Reenen (1997) claim that the prevalent use of technology is an evidence of skill-inclined technological development, which is the cause of the emergence of skill bias. The arrival of ICT will influence a smaller population of unskilled employees, but a larger population of employees with knowledge and abilities in harmony with innovation (Berman et al. 2009). Other studies arrive to identical findings, thereby reporting a firm relationship between ICT usage and the growth of employee competencies (Sims 2002). As concluded by Landry and colleagues (2003), regular jobs in particular will be influenced by considerable levels of employment loss. In contrast, the growth in demand for competent employees has dramatically increased in the last three decades, particularly from 1980 to the 1990s (Sims 2002). The underlying assumption of the SBTC model states that innovations match, rather than displace high-skilled jobs (Lawler et al. 2003). The complementary assumption states that two assets are matched if their combined use generates a progress in the value of each. According to this point of view, and with the notion of skill-inclined technological development, it can be assumed that skilled recruitment practices and ICT components are matched (Lawler et al. 2003). As a result, firms that employ one of these components will show a tendency to exploit the other component, combined with the first, with the intention of maximizing the consequential complementarities (Swart et al. 2005). The aim of this study is to examine the influence of technological innovations, particularly ICT, on the current recruitment practices. This study will also examine the different norms between those organizations using technological innovations, and those not doing so, particularly in those factors connected to recruitment practices. Research Questions The assumption is that general education will assist individuals in incorporating innovative information. Thus, if factual, better-educated employees will have leverage in making use of technological innovations. Generally, the higher the educational level, the more a job applicant will correctly use technology at home, and in the potential job (Landry et al. 2003). Arvanitis and Hollenstein (as cited in Swart et al. 2005) reports that the investment level in innovations have been directly influenced by the proportion of employees with a higher education, and emphasizes that the education levels of users is directly connected to innovation usage. In relation to the skill-inclined recruitment practices and technical adjustment framework, the first research question is: Does organizations that use innovations have a recruitment practice that values higher educational level? An important variable enhancing ICT usage is the presence of technological skills. The ‘absorptive capacity’ (Machin & Van Reenen 1997), described as the capability of the organization to give importance, assimilate, and use new knowledge, enables organizations to cope more appropriately with innovations. When an organization aims to obtain and apply knowledge not related to its current operation, it should generate absorptive capacity (Sims 2002). Ventures in recruitment become more crucial in working out the issue of the oldness of the earlier skills, this being the practice obliged by innovation. Likewise, information from the Information Week’s human resources survey show the fact that technological innovation is directly related to an enhancement in skill qualifications of the labor force with the intention of optimizing the use of technological innovations (Burke & Cooper 2005). Based on the preceding assumptions, corresponding to the possible relationships between ICT and recruitment practices, this second research question is created: Does organizations that adopt innovations require a higher level of training in recruitment practice? This study assumes that the wage level will be greater in organizations adopting ICT. Because numerous studies have found it hard to explain the boost in the levels of wage of skilled in comparison to unskilled labor, skill-inclined technological adjustment has been suggested as the major cause (Burke & Cooper 2005). This paradigm comprises studies of the influences of innovative change on the requirement for skilled employees, through the differences in comparative wages (Lawler et al. 2003), thereby acquiring empirical support about the boost in the compensation rates of skilled compared to unskilled workers. Research Methodology This section will provide an overview of the methodology that will be used to answer the major research questions discussed above. In addition, there will be an account of the information that will be used, and the existing information will be discussed. In order to answer the research questions, multiple descriptive analyses will be carried out that will enable the observation of the features of recruitment practices that invest in technological innovations. Included in the group of organizations venturing in technological innovations will be those that have ventured in equipment to perform information processing, while the other group will be those that have not ventured in these technological innovations. To answer the first research question, relative to the connection between the required educational level of recruitment agencies and the use of ICT at the organization, we will identify a factor on education. The second research question that is related to the connection between recruitment agencies’ requirement for training and adoption of ICT is suggested, so that they may be able to use ICT’s potential and enhance the outcomes of the organization. To perform the first analysis, two factors connected to education and training will be defined. First, the comparative training costs per employee will be assessed by the overall external and internal training costs of the organization. Second, a variable will be defined that comprises the particular training costs of the organization. This study will examine these training costs per employee in the overall sample, differentiating between organizations that venture in ICT and organizations that do not. To answer the first research question, this study will assess the average wage level employing the overall personnel costs per employee at organizational level, based on the annual statements of the organizations. The variable similar to personnel costs amass gross salaries and wages, social inputs assigned to the organization, inputs to corresponding pension schemes, and other social costs sustained during the year. Strengths and Limitations of the Study It is usually better to answer research questions in a small number of respondents, which is one of the features of this study. This prevents spending excessive resources, such as financial costs, time, and respondents, on finding a relationship between the variables mentioned above. Nevertheless, if a relationship between recruitment practices and use of technological innovation is found it is essential to explain it thoroughly in the conclusions that it was derived from a hypothesis-producing research and a bigger confirmatory research is required. On the other hand, one of the major limitations of this study is that it can generate superficially positive outcomes, or it may over-calculate the scale of the relationship between the aforementioned variables. Nonetheless, since the number of observations is not that large, these methods may fall short in generating sensible outcomes. Conclusion In this paper, the researcher provided a more accurate description of the possible effect of the use of technological innovation on recruitment practices. There are numerous studies that provide empirical support on the abovementioned relationship, employing information from surveys in the US and the UK. On the contrary, this study enhances the set of research in this arena by providing substantiation from a small sample of organizations. It has been find out in the literature review that the contemporary digital revolution is inclined in the benefit of qualified employees, who simultaneously take precedence in recruitment standards. Particularly, it is identified that organizations using ICT mandated well-trained and qualified employees, able to respond to the needs for adaptation and resiliency to technological innovations, and to the emerging environments where in they are used, so as to attain higher productivity and efficiency levels. In such contexts, greater attention should be given to issues of apprenticeships and constant enhancement, since employees should adjust to evolving conditions produced by technological innovations, making definite ventures to attain knowledge adjusted to the new requirements. Furthermore, it has been discerned that organizations using ICT provide standard compensation rates higher than those given by organizations that make no similar ventures. This strengthens the assumption that the employees who make use of ICT acquire greater productivity levels than are shown in the wages they have as compensation for this productivity. Ultimately, it is important to give particular attention to the disparities in employability between the rich and poor technology savvies, a trend referred to as the ‘digital divide’. Decision makers should orient their efforts to the condensing of this digital divide by encouraging the adjustment by all employees of the required competencies for the new knowledge society. References Berman, E.M., Bowman, J.S., West, J.P. & Van Wart, M., (2009). Human Resource Management in Public Service: Paradoxes, Processes, and Problems. UK: Sage Publications, Inc. Bresnahan, T. & Gambardella, A., (2004). Building High-Tech Clusters: Silicon Valley and Beyond. UK: Cambridge University Press. Burke, R.J. & Cooper, C.L., (2005). Reinventing Human Resources Management: Challenges and New Directions. London: Routledge. Krouse, S.B., (1997). ‘Managing without Traditional Methods: International Innovations in Human Resource Management’, Personnel Psychology, 50(1), 191+ Landry, R., Lamari, M. & Amara, N., (2003). ‘The Extent and Determinants of the Utilization of University Research in Government Agencies’, Public Administration Review, 63(2), 192-205. Lawler, E.E. III, Mohrman, S.A., Mark, A.Y., & Neilson, B., (2003). Creating a Strategic Human Resources Organization: An Assessment of Trends and New Directions. Stanford, CA: Stanford University Press. Machin, S. & Van Reenen, J., (1997). ‘Technology and changes in skill structure: evidence from seven OECD countries’, London School of Economics and Political Science, vol. 24, pp. 1-48. Milgrom, P. & Roberts, J., (1990). ‘The Economics of Modern Manufacturing: Technology, Strategy, and Organization’, American Economic Review, 80(3), 511-528. Sims, R., (2002). Organizational Success through Effective Human Resources Management. Westport, CT: Quorum Books. Swart, J., Mann, S., Brown, S. & Price, A., (2005). Human Resource Development: Strategy and Tactics. Oxford, England: Butterworth-Heinemann. Read More