Do high-involvement management practices enhance employees' innovative behavior?

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Volume Title
School of Business | Master's thesis
Date
2015
Major/Subject
Economics
Kansantaloustiede
Mcode
Degree programme
Language
en
Pages
74
Series
Abstract
This thesis studies the connection between High-Involvement Management (HIM) practices and employees' innovative behavior. Opportunity-enhancing, ability-enhancing, and motivation-enhancing HIM practices' connection to the probability for expressing innovative behavior is studied quantitatively using a probit regression and propensity score matching with an extensive set of control variables. Data is obtained from the Finnish MEADOW survey, which contains more than 1000 combined employer-employee observations. The main finding in the thesis is that opportunity-enhancing and ability-enhancing practices are associated with innovative behavior: In the scale of 0-10, a one-point increase in the aggregate score of the practices is associated with a statistically significant 3.4%-point and 1.3%-point average increase in the probability for innovative behavior for opportunity-enhancing and ability-enhancing practices, respectively. For motivation-enhancing practices, such association is not found. In addition, propensity score matching reveals that bundling the different practice types is associated with an increase in the probability for innovative behavior, but the association is smaller than the single practice types' combined association. Motivation-enhancing practices show slightly positive, yet insignificant association when not combined with other practices, while ability-enhancing practices show larger associations in magnitude when combined with other practices. The results are aligned with the vast majority of prior theoretical and empirical studies, and provide interesting future research topics, especially considering the effect of non-monetary incentives, which could not be investigated with the data used in the study, and the potential trade-off between productivity and innovativeness. Prior studies have suggested HIM practices to have a positive association with productivity, and it would be interesting to find out if productivity and innovativeness are complementary, substitutes, or independent of each other.
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Keywords
innovative behavior, Finland, high involvement management, human resource management, training, performance pay, team work
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