Abstract:We identify firm innovation as a channel through which the treatment of employees affects firm value. Long-term incentive theory supports positive effects of 'good' employee treatment on innovation. Alternatively, entrenchment theory suggests such treatment will lead to complacency and shirking, hence deterring innovation.These opposing views merit investigation since human capital is increasingly essential to the growth and success of a firm. Using the KLD database and patent/citation data, we find a signific… Show more
“…Thus, achieving innovation in products, processes, ideas, and services to achieve cost-efficacy and long-term success for an organization is more desirable than ever (Calantone et al , 2002). In recent years, with the advent of a resource-based view in business, it is argued that the human resources and intellectual capital (intangible asset) of a firm are important sources of innovativeness (Coff, 1997; Mao and Weathers, 2019; Ode and Ayavoo, 2020). It is proposed that to achieve innovative performance, firms are required to capitalize on the abilities, knowledge, opportunities and willingness of employees to innovate (Fu et al , 2015).…”
PurposeThis study is aimed at examining the mediating effect of meaningful work (MFW) between human resource practices (HRP) i.e. staffing, training, participation, performance-based evaluation, and reward with innovative work behavior (IWB) of Indian small and medium-sized enterprise (SME) employees.Design/methodology/approachThis is a cross-sectional study with data of 199 respondents collected from the Indian SME sector. The mediation path was analyzed using multiple hierarchical regression analysis and processes.FindingsResults of the study indicate that human resource practices, i.e. staffing, training and participatory decision making, are positively related to IWB; MFW mediates the relationships between these human resource practices and IWB. Interestingly, performance-based evaluation and reward are not found to be related positively to IWB in SMEs.Originality/valueThe study adds value to SME literature on how SMEs may promote innovation amongst their employees. In addition, the findings of the present study add to human resource management (HRM) literature regarding practices in Indian SMEs.
“…Thus, achieving innovation in products, processes, ideas, and services to achieve cost-efficacy and long-term success for an organization is more desirable than ever (Calantone et al , 2002). In recent years, with the advent of a resource-based view in business, it is argued that the human resources and intellectual capital (intangible asset) of a firm are important sources of innovativeness (Coff, 1997; Mao and Weathers, 2019; Ode and Ayavoo, 2020). It is proposed that to achieve innovative performance, firms are required to capitalize on the abilities, knowledge, opportunities and willingness of employees to innovate (Fu et al , 2015).…”
PurposeThis study is aimed at examining the mediating effect of meaningful work (MFW) between human resource practices (HRP) i.e. staffing, training, participation, performance-based evaluation, and reward with innovative work behavior (IWB) of Indian small and medium-sized enterprise (SME) employees.Design/methodology/approachThis is a cross-sectional study with data of 199 respondents collected from the Indian SME sector. The mediation path was analyzed using multiple hierarchical regression analysis and processes.FindingsResults of the study indicate that human resource practices, i.e. staffing, training and participatory decision making, are positively related to IWB; MFW mediates the relationships between these human resource practices and IWB. Interestingly, performance-based evaluation and reward are not found to be related positively to IWB in SMEs.Originality/valueThe study adds value to SME literature on how SMEs may promote innovation amongst their employees. In addition, the findings of the present study add to human resource management (HRM) literature regarding practices in Indian SMEs.
“…Additionally, socially responsible firms appeal to certain customers and have been found to be associated with superior sales and firm performance (Lev et al., ). Socially responsible firms can also attract and retain high‐quality employees, which contributes to firm value (Edmans, ; Mao & Weathers, ). Furthermore, commitment to social and environmental activities can decrease lawsuits and environmental costs (Dhaliwal et al., ) and increase investment efficiency and innovation (Cook et al., ).…”
We investigate whether powerful chief executive officers (CEOs) influence the conditions of their cash bonus contracts. Specifically, we examine (i) the association between CEO power and the proportion of ex‐ante cash bonus to base salary (bonus ratio), (ii) the association between CEO power and the relative use of non‐financial to financial performance targets in cash bonus contracts, and (iii) the performance consequences of incorporating non‐financial targets in cash bonus contracts. Results show that powerful CEOs are associated with greater ex‐ante bonus ratios and higher proportions of non‐financial performance targets compared to less powerful CEOs. Furthermore, the use of quantitative and corporate social responsibility (CSR)‐related non‐financial performance targets is positively associated with subsequent firm performance, and the use of undefined non‐financial performance targets is negatively associated with subsequent firm performance. These results are robust to alternative econometric specifications and variable definitions.
“…The evidence offered by the literature in this context is very variegated (Perry et al 2009); only in some contexts, for example medical and education, is its effect positive (Andersen 2007;Davidson et al 1992;Dowling and Richardson 1997;Shaw et al 2003). It is worth noting that this is true in corporate contexts as well Mao and Weathers (2019).…”
Section: Literary Review and Research Hypothesismentioning
In this paper, the role of the monetary incentives in the employee performance is investigated in the context of Public Administration (PA). In particular, the distribution of monetary incentives among the employees based on the position held, is compared with a merit approach which tends to recognize and reward individual contributions. Starting from a questionnaire, the informal network, which ignores the vertical relation among supervisor and employees, is created and a Centrality Index, based on the employee connections, has been defined and used to proxy the performance of employees. The main goals of the paper are to understand if the two mechanisms of monetary incentive distribution affect the employee performance, to analyze the variables that influence the employee performance, and therefore to identify the role of monetary incentives. The linear regression methodology has been chosen as a tool of analysis. Results show that the distribution of monetary incentives according to merit criteria rewards the employee performance and has positive effects on the employee performance in the short term.
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