Employee Expectation to Demonstrate Innovative Work Behaviour in Asia

Abstract

The competitive nature of enterprises requires organizations to foster an environment that encourages employee innovation that leads to profitability and customer satisfaction. Organizational innovation is influenced by several factors with employee behaviour being one of the important factors. Employees contribute in the innovation process and thus, it is important for organizations to understand employee expectations to demonstrate innovative work behaviour in order to create and maintain an innovative work culture. In the present study, a conceptual model based on culture, reward and program, training, compensations, leadership and systems was tested to assess that impact on employee expectations leading to innovative work behaviour. The study was conducted in the context of city-state of Singapore due to its significant emphasis on promoting and nurturing employee innovation. The model was tested using empirical data collected through a survey of employees in Singapore. The results indicate that while culture, rewards and training programs have a direct relationship on employee expectations to demonstrate innovative work behaviour, when considered together, leadership and systems are significantly and positively associated with employee expectations. These factors are usually under the control of organizations and can be enhanced through systematic interventions, thereby providing practice managers an avenue to improve employee innovation behaviour. The other implications of the findings and future scope are discussed.

1. Introduction

Organizations are facing challenges and disruptions triggered by globalization and technological advancements accentuating the need for systematic innovation in organizations (Drucker, 2014), compelling the need to innovate product, processes and services. There is increasing evidence that firms with focus on innovation enjoy better business performance and are expected to survive longer than normal ones due to their adaptive behaviour (Sinar, Wellins, & Pacione, 2011). Innovation continues to be one of the critical challenges faced by firms in Asia (Hu, 2015) and organizations are relying on their employees as key resources for innovations at work. Employee values, attitudes, perception and behaviour influences their performance which in turn contributes to organizational growth (Martins & Terblanche, 2003). Employee’s innovative work behaviour is crucial in any organization for continuous improvement. Innovative firms consider their employee’s as sources of innovation and are constantly looking for ways to encourage employee driven innovations (de Jong, 2006), (Imran, Saeed, Anis-Ul-Haq, & Fatima, 2010).

Employee performance depends on the employee expectation, work experience and job satisfaction and the gap created due to mismatch with the workspace reality leads to job dissatisfaction, which can impact an organization’s innovative culture (Dörner, 2012). The employee behaviour can be studied using Innovative Work Behaviour (IWB) framework which is the sum of work activities carried out by an employee for innovation development (Messmann & Mulder, 2012).

Past research indicates benefits of innovative work behaviour for organizations and anticipates organizational profit from encouraging it. This means that it is important to identify precedents for innovative work behaviour such as employee expectation, which is closely linked with Innovative work behaviour (Dörner, 2012). There is a link between innovations, enhanced quality of services and better financial performance and these links are strengthened through employee empowerment (Camuffo & De Stefano, 2016), hence it is critical to study employee perception on innovative work behaviour. Organizations need to further understand employee expectation and their priority in order to get productivity, efficiency and new ideas in workspace.

The city-state of Singapore is reliant on innovation for its continuous economic growth and constantly implements initiatives that supports innovations (Ng, 2012). Past research indicates a significant positive relationship between organizational factors and innovation, however there is scope to study the role of leadership and human resource practices on employee’s motivation to innovate (Wan, Ong, & Lee, 2005). The primary aim of this research is to assess the role of employee expectation in demonstrating innovative work behaviour in Singapore context.

2. Literature Review

A comprehensive review of existing literature was undertaken to study innovative work behaviour and the precedents influencing employee expectations. This section outlines the key factors considered in the present study on employee expectations namely culture, reward and program, training, compensations, leadership and systems.

2.1. Innovative Work Behaviour (IWB)

IWB is viewed as a set of behaviours that includes idea generation and opportunity exploration (Scott & Bruce, 1994); (de Jong & den Hartog, 2010); (Janssen, 2000) and other definitions include proactive idea implementation and problem solving (Parker, Williams, & Turner, 2006). These behaviours can range from incremental improvements to developing radically new ideas, thus having varying effect on organizational outcomes. Innovative work behaviour is seen as an extra role behaviour, not usually defined as part of a typical job description of an employee (Dörner, 2012), thus making it a discretionary behaviour. Past studies indicate that IWB is affected by leadership, problem-solving style of an individual and work group relationship (Scott & Bruce, 1994).

IWB is influenced by the lack of resources and other factors at individual employee level such as meaning of work, boredom and personal growth (Stock, 2015). At a team level IWB is influenced by team processes variables such as support for innovation, vision and task orientation and external communication (Hülsheger, Anderson, & Salgado, 2009). Since these factors are controlled and designed by organizations, a better understanding of these will enable improvement of employee IWB.

The IWB has been described as a set of four related tasks that include ‘intentional idea generation, promotion and realization of new ideas to provide benefit for organizations’ by West and Farr (1990). These four factors of IWB are further elaborated as -

i. Opportunity exploration

Innovation is triggered by identification of a performance gaps that lead to identifying the opportunities. These opportunities can be either internal such as improvement in current products or services or external through different sources.

ii. Idea generation

Any opportunity can be exploited in the presence of a creative idea and employee are a major source of these ideas. According to Kanter (1998), employee’s ability to construct new ideas is as important as identifying new opportunities. Idea generation and opportunity exploration include recognizing opportunities to innovate and produce ideas.

iii. Championing

Championing refers to promoting the generated ideas for the benefits of organization by overcoming any resistance to change. Championing includes behaviour related to finding support and building coalitions, such as influencing employees, pushing and negotiating.

iv. Application

Application means doing what is needed to convert ideas into reality. It includes behaviour such as product or work processes and testing and modifying them. From the aspect of IWB, such a behaviour needs to be proactive and persistent (de Jong, 2006).

2.2. Culture

Organizational culture asserts significant influence in shaping behaviour patterns of employees (Kotter & Heskett, 1992). Hofstede (1980) summaries organizational culture as a collective process of the mind that differentiates the members of one group from others. Organization culture is the drive that recognizes the organization member’s effort and contribution and provides a holistic understanding of purpose and means of the goals, interrelationships and ways for each employee to attain organizational goals. Organization culture influences creativity and innovation through the values, norms and beliefs in both positive and negative manner (Martins & Terblanche, 2003). Culture plays an important role in organization growth and innovation (Imran et al., 2010) and the long-term success of organizations is influenced by innovation, especially related to people and behavioural factors and organizational culture has proven to foster both innovation and performance (Naranjo-Valencia, Jiménez-Jiménez, & Sanz-Valle, 2016). Further, innovation processes are reliant on the cultural dimensions of the country of operation with the individualism dimension positively related to innovation (Kaasa, 2016). The playing field of innovation is culture, innovation would be stifled before starting if ideas and risk taking is not supported by culture (Wycoff, 2003). Organizational culture changes dynamically to meet varying demand for employee expectation and satisfactions. While organizations prefer to hire high performing individuals to meet their objectives, these individuals expect supporting organizational culture to attain their individual objectives. Researchers have considered the importance of individual factors to make a link with organization culture and employee performance, employee satisfaction and productivity (Uddin, Luva, & Hossian, 2013).

Culture: Internal environment that results from the behaviour and policies of members of organization, especially in top management.

H1: Culture positively affects employee expectation for innovative work behaviour

2.3. Reward and Recognitions

Employees are the mainstay of organizational innovation and their active participation ensures that sustainable innovation. Employees demonstrate innovation behaviour when they perceive positive organizational support (Eisenberger, Fasolo, & Davis-LaMastro, 1990). Rewards and recognition play a critical role in energizing employees to demonstrate innovative work behaviour. The psychological contract of an employee to include innovative work behaviour is influenced by meritocracy, pay equity and procedural justice (Ramamoorthy, Flood, Slattery, & Sardessai, 2005). Organizations offer extrinsic rewards to employees to demonstrate creative performance, these rewards positively affect the intrinsic motivation of employees (Malik, Butt, & Choi, 2015). Most innovative firms are seen to adopt comprehensive human resource practices including reward systems that recognizes and boosts employee creativity (Gupta & Singhal, 1993). These HR policies can promote self-leader behaviour among employees, which is seen to encourage innovative behaviour (Stashevsky, Burke, Carmeli, Meitar, & Weisberg, 2006).

Reward & Recognition: is an acknowledgement by the organization of contributions or the value of expertise and experience of an employee or a team. It is the return on an employee’s effort, dedication at work and results.

H2: Organization Reward & Recognition positively affects employee expectation.

2.4. Training

Training is seen to contribute in promoting innovation strategy in an organization given that acquisition of new skills and thinking precedes innovation. A longitudinal study indicates a positive association between training and innovations in technical environments (Shipton, West, Dawson, Birdi, & Patterson, 2006). The decision to innovate and intensity of innovations are linked to skills training and resources of the workers (González, Miles, & Pazó, 2015). The employee motivation to innovate and persist in innovative performance outcome is also influenced by other human resource practices adopted by firms, including strategic goal setting, motivation and adoption of technology (Schmidt, 2015). Innovation competency develops over time through active learning and engaging on real tasks. This requires the training processes to include elements of coaching to ensure development of the competency (Wycoff, 2003). The post-training behaviours of employees having undergone training are affected by the supporting environment provided by organizations (Tracey, Tannenbaum, & Kavanagh, 1995). Thus ability-enhancing and opportunity-enhancing support extended by organizations to employees is seen to as some of the expectations of employees (Ma Prieto & Pilar PerezSantana, 2014).

Trainings: Training is provided to improve performance on the current job by learning process that enables achievement of organizational objectives and goals to carry out specific tasks.

H3: Training positively affects employee expectation

2.5. Compensation

Compensation is one important factor for employees to demonstrate innovative work behaviour including the perception of fairness in effort-reward (Janssen, 2000). A compensation model needs to strike a balance between the risks and rewards associated with the work to encourage innovation to avoid non-risk taking behaviours of employees in favor of career stability or future compensation. Organizational factors such as equity perception and individual factors such as pay are seen to influence IWB (Ramamoorthy, et al., 2005). On other hand, there is a likelihood of negative impact of pay on employee motivation and performance in the form of reduced creativity and productivity and this can be mitigated by focusing the rewards on long-term performance (Ederer & Manso, 2013). In addition, the rewards that are seen to be contingent upon learning are also seen to have positive effect on employee innovation (Shipton et al., 2006)

Compensation: Compensation represents the total monetary and non-monetary benefits provided to an employee by an employer to perform required work.

H4: Compensations positively affects employee expectations

2.6. Leadership

Leadership has been shown to be an important factor contributing to innovation and employee innovative behaviours at work are influenced by the leadership behaviours that stimulate idea generation and application (de Jong & den Hartog, 2007). A number of previous studies have shown that leadership has positively influenced organizational innovation (de Jong, 2006). Transformational leadership is seen to have significant positive relationship with IWB (Reuvers, van Engen, Vinkenburg, & WilsonǦEvered, 2008) and these leaders stimulate employee ability to perceive problems differently and develop their full potentials. These leaders also encourage experiments to explore new ways of doing things, to test new products, services and procedures (Gumusluo÷lu & Ilsev, 2009). On the other hand, firms adopting transactional leadership style are likely to demonstrate higher performance in product innovation than process innovation. (Huijun & Jianjun, 2015).

Ambidextrous leadership are effective in predicting team innovation behaviour and these are highest when the two ambidextrous leadership behaviours - opening and closing - are highest (Chan & Liu, 2016). In addition, leadership style adopted by firms has an impact on their innovation performance. In the 21st century organizations that are characterized with high levels of autonomy and motivation, individual creativity is positively related to shared and distributed leadership style (Peter, Braun, & Frey, 2015). The attitudes of the top management are also seen to influence the innovation capability of employees (Zmud, 1984). Management plays an important role in decision making and inspiring others to perform well.

Leadership: The ability of an organizations management to make decisions and inspire others to perform well. It is the process of influencing and facilitating individual and collective efforts to accomplish the shared objective.

H5: Leaderships positively affects employee expectations

2.7. Systems

Systems are another important factor contributing in organization innovations and at a firm level, innovation management process is essential to turn ideas into useful and marketable products (Adams, Bessant, & Phelps, 2006) including input, knowledge and project management. These are the processes, procedures and daily activities that employees engage in to get the job done. It is believed that the organization that following best technology oriented practices such as PMI, ITIL and Six Sigma are innovative on sustainable level and taking low risk (ref). Contrary to earlier research indicating negative effect of management control on innovation, the study (Allen, Adomdza, & Meyer, 2015) report a differing effect of management control of human resources in supporting innovation on employee motivation. The effect is dependent on the attributes of knowledge being used. Increasingly, various techniques or methods are used by organizations to drive innovation such as online creativity contests, crowdfunding platforms to generate and fund innovative ideas, ‘catalyst fund’ and ‘Shark Tank’ style competition where multiple employee teams compete to pitch their best ideas to senior officials. The job resources made available to employees also has a mediating effect on the work engagement and innovative behaviour (Salanova & Schaufeli, 2008).

Systems: This includes process, procedure and daily activities that employees engage in to get the job done.

H6: Systems positively affects employee expectations

2.8. Employee Expectations

Employee expectations play an important role in human behaviour as people are more likely to engage in a specific behaviour when they share a belief of positive outcomes.

Previous research on outcome expectation has found that they positively influence work related activity, such as knowledge sharing (Hsu, Ju, Yen, & Chang, 2007 ) and innovative work behaviour (Yuan & Woodman, 2010). Employee expectations and perception is also affected by the nature of positive and negative stressors at work (Ren & Zhang, 2015 ).

H7: Employee expectations positively affect innovative work behaviour.

3. Research Methodology

The research was conducted using both qualitative interviews and quantitative survey to understand employee expectation for demonstrating innovative work behaviour. Extensive secondary review of extant literature of published research was conducted using databases such as Scopus, to identify the variables influencing employee expectations. Qualitative interviews were conducted among 12 individuals (HR, Line manager and lead role) to assist in designing the research framework. Based on the interview result, study of existing research articles and discussion with various lead profile individuals, six variables were identified as input variables for employee expectations that have a direct impact on dependent variable employee outcome expectations. The dependent and independent variables were identified and their relationship is represented in Figure 1. The measures used in the survey were based on previously developed scales and were modified for the purpose of the present study. The Innovative Work Behaviour was assessed using the scale developed by de Jong (2010) and employee expectation was adapted from (Venkatesh, Morris, Davis, & Davis, 2003). The research framework is indicated in Figure 1.

[Figure 1] Research Framework

3.1. Data collection

The survey questionnaire was prepared on the basis of the literature review and the gaps identified. The survey instrument was pretested to assess in the Information for this research will be obtained through both primary and secondary sources. The pilot study was conducted with 20 respondents to check for the coverage and understanding of the questionnaire. The research framework was discussed with 12 senior professionals associated with innovation departments, team and HR professionals. The inputs from these interviews enabled further refinement of the questionnaire. The final questionnaire included 43 questions. A five point Likert scale was used to record responses. For the purpose of this study a purposive sampling approach was adopted and respondents were chosen from different

industries within Singapore. Care was taken to ensure that respondents have experience in participating in organizational innovation / teams projects in different roles such as team member, team leaders and HR professional. The online survey was distributed to the respondents using Qualtrics platform for anonymous feedback through emails.

The online survey was sent to a total of 150 respondents and of which 82 valid responses were received, representing 54% response rate. Table 1 summarizes the characteristics of the respondents.

[Table 1] Demographic Characteristics of Respondents

3.2. Data Analysis

The data collected from the survey was analyzed using SPSS software for univariate and multivariate analysis (Bryman & Cramer, 1994), (Burns & Burns, 2008).

3.3. Reliability Analysis

The reliability of data was assesses and validated by using Cronbach’s alpha coefficient, which is a measure of internal consistency of measures and a value of 0.6 and above is considered satisfactory (Cronbach, 1951), (Cortina, 1993), (Bland & Altman, 1997). The Cronbach’s alpha coefficients for identified variables are given below in Table 2 and the value is above 0.7, indicating good reliability of measures.

[Table 2] Reliability measure – Cronbach’s Alpha

3.4. Correlation Analysis

After verifying reliability of measures, a linear correlation analysis was carried out to view the relationship amongst all variables considered using Pearson’s correlation. This is a measure of strength of linear relationship between paired data. The results of the correlation analysis including Mean and Standard Deviation are given in Table III below. Leadership (r=.587, P<.001) and Systems (r=.62, P[.001) have significant positive relationship with Employee expectations with higher strength of association (r=].5). Culture (r = 0.312, P<.001), Training (r=.406, P<.001), Compensation (r=.443, P<.0001), have significant positive linear relationship with Employee Expectations with moderate strength of association (.3< r < .5). Reward and recognition has a moderate positive relationship with employee expectations, however the relationship is not significant at (P<.001). The relationship between Employee Expectations and Innovative Work Behaviour is positive (r=.288) at P<.01, but the magnitude of association is low (r<.3).

3.5. Regression Analysis

Simple regression analysis was calculated to predict relationship between dependent variable employee outcome expectation and independent variable to determine the relation. Leadership (adjusted R²=.344, unstandardized B value of .641) and Systems (adjusted R²=.385, unstandardized B value of .560), Culture (adjusted R²=.155, unstandardized B value of .370), Rewards and recognition (adjusted R²=.097, unstandardized B value of .264), Training (adjusted R²=.165, unstandardized B value of .362), Compensation (adjusted R²=.196, unstandardized B value of .369) contributes positively to employee outcome expectations at (P<.005). The detailed results are given in Table 3.

[Table 3] Summary of Simple Regression

3.6. Multiple Regression Analysis

Multiple regression analysis was calculated between dependent variable outcome expectation and independent variable culture, reward & recognition, training, compensation, leadership and systems to determine the best relation amongst them. A significant regression equation was found (F(6,42)=10.893, p<.000) with adjusted R² of .471. Based on above analysis, when all the six independent variables are considered together, four variables culture, reward & program, training and compensation become insignificant as their P-value is greater than the stipulated .05. Due to insignificance, these variables will not be evaluated further. Leadership and systems are found significant as their p-value is less than .05. Their respective unstandardized B of .288 and .286 suggest that they contribute significantly and positively to outcome expectation. The result of multiple regression analysis is given in [Table 4].

[Table 4] Multiple Regression Summary

3.7. Hypotheses Testing

From the analysis of collected data, if considered independently, all independent variable culture, reward & program, training, compensation, leadership and system have significant and positive influence on employee expectation, which in turn have significant and positive influence on innovative work behaviour. However, when all variables are considered together in multiple regression analysis, reward & program, training, culture and compensation lose their significance. Leadership and system continue to show significant and positive influence on employee expectation. The summary of the hypothesis testing using simple and multiple regression is given below in Table 5.

[Table 5] Summary of Hypothesis Testing

4. Results

The study identified seven hypotheses and three were supported with significant positive relationship. Following is the detailed explanation on the hypothesis defined. The simple regression of independent variables - culture, reward & program, training, compensation, leadership and system - have significant and positive influence on employee expectation, which in turn have significant and positive influence on innovative work behaviour. However, when all variables are considered together in multiple regression analysis, reward & program, training, culture and compensation lose their significance. Leadership and system continue to show significant and positive influence on employee expectation. Thus, this research has addressed existing research gap and contributed to understanding of employee expectations and innovative work behaviour.

5. Discussion

The objective of this research was to study the factors that influence employee expectations to demonstrate innovative work behaviour. The research offers new insights in the context of Singapore. The research indicates the Leadership and Systems have significant positive relationship with employee expectation and that the innovative work behaviour is positively influenced by employee expectations. Organizations can implement programs for imparting leadership skills to its key employees and invest in enhancing the systems that track innovation processes such as Project Management, Six Sigma, Technology support, Innovation Labs in order to support innovative work behaviour of employees. The descriptive nature of the study may limit the generalizability of the study. The scope of the research was limited to Singapore. Future studies can consider other countries in the region. Other antecedents that influence employee expectations such as, individual motivation (Amabile, 1988) and role of peers (Scott & Bruce, 1994) can be included in future studies.

6. Conclusion

Organizations are dependent on employees as critical sources of innovation. Several factors influence employee expectations to demonstrate innovative work behaviour. These factors can be directly and indirectly influenced by organization and executive leadership. Based on the study, we can conclude that in order to maintain and generate innovative environment and behaviours amongst their employees, organizations should enhance all six factors - culture, reward & recognition, training, compensation, leadership and systems. Of these, leadership and system are crucial dimensions that significantly and positively influence employee expectation.