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Article

Enhancing Employee Creativity for A Sustainable Competitive Advantage through Perceived Human Resource Management Practices and Trust in Management

by
Juil Lee
1,
Sangsoon Kim
2,
Jiman Lee
1 and
Sungok Moon
3,*
1
School of Business, Yonsei University, Seoul 03722, Korea
2
The Korea Institute of Nuclear Nonproliferation and Control, Daejeon 34054, Korea
3
Department of Hotel Management, Korea Tourism College, Icheon 17306, Korea
*
Author to whom correspondence should be addressed.
Sustainability 2019, 11(8), 2305; https://doi.org/10.3390/su11082305
Submission received: 21 March 2019 / Revised: 12 April 2019 / Accepted: 15 April 2019 / Published: 17 April 2019
(This article belongs to the Special Issue Knowledge and Intellectual Capital Management for Sustainability)
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Abstract

:
This study explores the black box of the relationship between perceived human resource management (HRM) practices and employees’ creativity. Building on the literatures on social exchange and creativity, this study advances a moderated mediation framework of the link between perceived HRM practices and employees’ creativity. We develop the argument that the positive relationship between perceived HRM practices and employees’ creativity is mediated by trust in management and that the mediated relationship is stronger for permanent employees than for temporary employees. Our study finds strong support for the moderated mediation model in a survey study of 285 employees in 14 research institutes funded by the Korean government. We discuss the theoretical and practical implications of our findings.

1. Introduction

Studies on the relationships between perceived human resource management (HRM) practices and outcomes have burgeoned in recent decades, because researchers studying HRM practices began to recognize that employees interpret and respond to HRM practices in different ways [1,2,3,4,5]. From this perspective, researchers have begun to pay attention to how perceived HRM practices influence individual- and organizational-level outcomes.
Most researchers studying HRM practices have regarded social exchange theory as an underlying mechanism between HRM practices and outcomes [6,7,8,9]. Building on the social exchange theory, prior studies have found that employees who receive socio-emotional and economic benefits from HRM practices reciprocate with positive attitudes or behaviors, which are commensurate with employees’ positive perceptions of HRM practices. Indeed, much research has demonstrated that employees’ positive perceptions of HRM practices lead to employee well-being [1], enhanced work-related attitudes and behaviors [4], higher trust in management [10], positively perceived procedural justice and organizational commitment [3], positive psychological contract, and employee outcomes [11], enhanced discretionary behavior [12], affective commitment and organizational citizenship behavior (OCB) [6], and employee engagement, OCB, and lowered turnover intentions [2].
Notwithstanding the burgeoning research on the outcomes of perceived HRM practices, little attention has been paid to employees’ creativity, which leads to a sustainable competitive advantage. Understanding how and why perceived HRM practices may lead to employees’ creativity would provide theoretical and practical implications for strategic HRM and creativity. Indeed, empirical evidence demonstrates that employees’ creativity leads to innovation, positive performance outcomes, and organizational longevity [13,14]. Employees’ creativity has increasingly become a critical factor of firm performance and long-term survival. As firms seek to utilize employees’ ideas and suggestions, enhancing employees’ creativity has become a determinant of a sustainable competitive advantage [15,16]. For instance, Google has long encouraged its employees to spend 20 percent of their time during work hours on their passion and interests to foster employees’ creativity, thereby enabling it to initiate sustainable business models. As such, this study attempts to lay a cornerstone of understanding the link between perceived HRM practices and employees’ creativity by exploring an underlying mechanism of the relationship.
Specifically, understanding the link between perceived HRM practices and employees’ creativity requires a more elaborated view because the social exchange model of the relationship provides only a limited understanding. Researchers contend that creativity requires employees to think and behave differently from the prevailing beliefs or routines in their organizations [17,18] while the creativity-outcome link is unpredictable and ambiguous [19], implying that creativity necessarily involves risk [20,21,22]. The creativity literature suggests that risk-taking is essential to creativity [20,23,24,25,26,27,28,29]. Thus, we argue that a key precondition of encouraging employees’ creativity is building a trust-based relationship between employees and their managers. Such a relationship enables them to explore creative ideas and innovative behaviors that deviate from the status quo, because they feel confident in their beliefs about the likelihood that their managers are at least not harmful or favorable to their innovative attempts.
However, the literature on HRM practices has paid little attention to a trust-based relationship as an intervening mechanism between perceived HRM practices and employees’ creativity. Drawing on the research suggesting that risk-taking is indispensable to encouraging creativity, this study suggests that the black box of the link between perceived HRM practices and employees’ creativity would be unlocked via employees’ trust in management. Specifically, we contend that employees’ positive perceptions of HRM practices are related to trust in management, leading in turn to employees’ higher creativity. In sum, we aim to theorize and demonstrate the link between perceived HRM practices and employees’ creativity via employees’ trust in management.
We further elaborate our model by exploring a boundary condition of the indirect effect of perceived HRM practices on employees’ creativity via trust in management. In the literatures of HRM practices, trust, and creativity, type of employment has been highlighted as a key contingency variable [30]. In this regard, we argue that a social exchange relationship is dependent on two types of employment such as permanent employment and temporary employment. This is because the strength of an employee-manager exchange relationship relies on how long employees expect that the relationship will last. From this perspective, it is logical to predict that permanent employees’ expectation of a long-term relationship intensifies the social exchange relationship. By extension, we suggest that the positive impact of perceived HRM practices on employees’ creativity via trust in their management should be stronger for permanent employees than for temporary employees.
This study contributes to the literature on sustainable HRM and creativity in two respects. First, this paper provides support for an emerging approach to HRM, which is labeled sustainable HRM. This approach seeks to examine the relationship between HRM and sustainability. Although scholars have a variety of views about sustainable HRM, there is a common feature of the studies on sustainable HRM [31]. The researchers who suggest the concept of sustainable HRM are concerned with enhancing economic outcomes and organizational sustainability through HRM practices which are positively related to human and social outcomes (e.g., references [32,33,34]). In this respect, this study’s investigation of the relationship between employees’ perception of HRM practices and trust in management and creativity, human, social, and economic outcome variables, which can lead to a firm’s longevity, i.e., a sustainable organization, contributes to the literature on sustainable HRM.
Second, this study contributes to the literature on strategic HRM and creativity. The scholars studying HRM practices and employees’ creativity have primarily paid attention to social exchange theory to elucidate the link between them. However, given that creativity often involves risks, social exchange theory provides only a limited explanation for the relation between HRM practices and employees’ creativity. In this respect, this study suggests that a trust-based relationship between employees and their managers can be a precondition of enhancing employees’ creativity. In sum, this study illuminates trust as a mediating mechanism between HRM practices and creativity.
This study proceeds as follows. We first elicit trust as a key precondition of encouraging employees’ creativity from reviewing the literature on creativity, and then building on the social exchange theory. In doing so, this study suggests that perceived HRM practices are positively related to employees’ trust in their managers. Second, we argue that employees’ trust in management leads to employees’ creativity. Third, we advance the argument that employees’ positive perceptions of HRM practices contribute to employees’ higher creativity via trust in management. Fourth, we further elaborate our mediated model of perceived HRM practices, trust in management, and employees’ creativity by suggesting that the indirect effect of perceived HRM practices on employees’ creativity via trust in management should be stronger for permanent employees than for temporary employees. That is, our research model, illustrated in Figure 1, is a moderated mediation framework of the link between perceived HRM practices and employees’ creativity. Fifth, we test our ideas using a survey of 285 employees in 14 research institutes funded by the Korean government. Sixth, this study presents the results of our suggested hypotheses. We finally discuss theoretical and empirical contributions and implications of our findings.

2. Theoretical Background and Hypotheses

2.1. Perceived HRM Practices and Employees’ Trust in Management

The creativity literature indicates that creative ideas and innovative behaviors necessarily involve risk [20,23,24,26]. Researchers have argued that since creative ideas and innovative behaviors deviate from the existing ways or routines [18], such ideas and behaviors necessarily involve risk [20,21,22]. In this respect, scholars have investigated potential predictors of employees’ risk-taking attitudes and behaviors. Prior studies have suggested that employees are willing to take risk when they trust their managers. This is because they feel that their managers are at least not harmful or favorable to risky attempts. [20,23,24,25,26,27,28]. Accordingly, we argue that employees’ trust in their managers is a key precondition of encouraging employees’ creativity.
The social exchange researchers argue that trust is often viewed as a favorable outcome of social exchange [35]. In the explanation of how social exchange is formed between employees and their managers and how social exchange is activated into a trust-based relationship, the literature on HRM practices provides an explanatory framework to shed light on how perceived HRM practices contribute to employees’ trust in their managers. The researchers studying HRM practices have suggested that HRM practices provide employees with socio-emotional and economic benefits, thereby leading to their awareness of how valuable they are in their organizations and their reciprocity with positive attitudes and behaviors [8,9,10]. In keeping with this perspective, Tzafrir et al. [10] found that employees’ positive perceptions of individual HRM practices such as communication, procedural justice, empowerment, and employee development contribute to building a trust-based relationship between employees and their managers. Gould-Williams [36] also investigated the effect of bundles of HRM practices on workplace trust by using a theoretical model based on theories of organizational behavior, organizational psychology, social exchange, and economics. The author found that bundles of HRM practices provide a consistent and positive message to employees in the UK local government and further highlighted that HRM practices are powerful determinants of trust.
Taken together, we suggest that employees’ positive perceptions of HRM practices may contribute to building a trust-based relationship between employees and their managers. Employees who positively perceive HRM practices including employment security, selective hiring, education and training, fair performance appraisal, participation in decision making, reduction of status differences, retirement management, and benefits package as a synthesis of supporting them reciprocate with trust in their managers commensurate with the extent to which they positively recognize and react to HRM practices. Thus, we propose the following hypothesis:
Hypothesis 1 (H1).
Perceived HRM practices are positively related to employees’ trust in management.

2.2. Trust in Management and Employees’ Creativity

As noted, the creativity literature suggests that since employees’ creative ideas and innovative behaviors deviate from the existing routines and status quo [19], creativity is likely to meet resistance from prevailing views in their organizations, thereby exposing them to risk of evaluation- and reputation-related devaluation [20,21,22]. As such, employees generally are likely to be reluctant to explore creative ideas and innovative behaviors, as a result lowering employees’ creativity. In this regard, researchers have explored possible predictors of encouraging employees’ risk-taking. Studies have suggested that employees tend to take risky alternatives when a trust-based relationship exists in their organizations [20,23,24,25,26,27,28]. Indeed, Schoorman, Mayer, and Davis [26] (p. 346) pointed out that “trust is the ‘willingness to take risk,’ and the level of trust is an indication of the amount of risk that one is willing to take.” This is because employees who trust their managers believe that their managers are willing to support their risky attempts irrespective of the outcomes.
In sum, we argue that employees’ trust in their managers is the bedrock of encouraging employees’ creativity. Employees who highly trust their managers are willing to explore creative ideas and attempt innovative behaviors because they believe that their managers are at least not harmful or favorable to their innovative attempts, thereby leading to higher creativity. On the other hand, employees who have low trust in their managers are reluctant to explore creative ideas and pursue innovative behaviors because they recognize that their innovative attempts will not be welcomed and supported by their managers. Accordingly, we predict that employees’ trust in their managers contributes to higher creativity. We then suggest the following hypothesis:
Hypothesis 2 (H2).
Trust in management is positively related to employees’ creativity.

2.3. The Mediating Impact of Trust in Management on the Relation between Perceived HRM Practices and Employees’ Creativity

As stated earlier, intervening mechanisms between perceived HRM practices and employees’ creativity remain to be explored in more depth. Building on the creativity literature suggesting that creativity necessarily involve risk, this study suggests that perceived HRM practices are related to employees’ creativity through trust in their managers because the trust-based relationship enables them to explore creative ideas and to attempt innovative behaviors. As discussed earlier, trust in management is a key factor enhancing employees’ creativity because they feel that their managers are supportive when they attempt to propose creative ideas, which often involve risks. The prior studies on social exchange theory have shown that a positive outcome of social exchange relationship between employees and their managers helps to build a trust-based relationship. Building on the social exchange theory, this study suggests that employees’ positive perceptions of bundles of HRM practices help build a trust-based relationship because they reciprocate with trust in their managers when they recognize consistent and positive messages of HRM practices. Such trust encourages employees to explore creative ideas and attempt to innovative behaviors, which positively contribute to employees’ creativity. This is because they believe that although their innovative ideas and attempts often bring about risks and failures, their managers are willing to support their innovative ideas and attempts. Taken together, we propose the following hypothesis:
Hypothesis 3 (H3).
The relationship between perceived HRM practices and employees’ creativity is mediated by trust in management.

2.4. The Moderating Effect of Type of Employment

Two types of employment, permanent employment and temporary employment, affect employees’ perceptions, attitudes, and behaviors because expected roles and socio-economic status differ between permanent employees and temporary employees. From this view, we suggest that permanent employees are more likely to build a long-term exchange relationship with their managers than temporary employees, intensifying the reciprocal exchange relationship. This is because the level of an employee-manager exchange relationship is dependent on how long employees expect the relationship to last [37]. Therefore, type of employment may moderate the link between perceived HRM practices and employees’ trust in management. Furthermore, the link between perceived HRM practices and employee creativity via employees’ trust in management may be stronger for permanent employees than for temporary employees.
We contend that permanent employees’ expectation of a long-term relationship can amplify the social exchange associated with building a trust-based relationship between the employees and their managers. We infer that permanent employees are more likely to build a close relationship with their managers than temporary employees because permanent employees’ frequent, repeated interactions give rise to a formation of reciprocal dependence based on a credible relationship. If permanent employees expect a long-term relationship with their managers, they are more likely to form strong attachments to their managers, thereby intensifying the permanent employees’ reciprocal attitudes and behaviors. In sum, the impact of perceived HRM practices on employees’ trust in management should be stronger for permanent employees than for temporary employees. We, therefore, suggest the following contingency hypothesis.
Hypothesis 4 (H4).
The positive relationship between HRM practices and trust in management is stronger for permanent employees than for temporary employees.

2.5. The Moderated Mediation

Taken together, we construct a moderated mediation model of the links among perceived HRM practices, type of employment, trust in management, and employee creativity. We predict that employees’ positive perceptions of HRM practices lead to higher trust in management and employees’ higher creativity under the condition of permanent employment. Specifically, although two different types of employment are associated with how employees respond to the impact of high or low employees’ perceptions of HRM practices, which in turn may be related to their trust in management, the extents of trust in management are still essential to be associated with employees’ creativity. Based on the preceding arguments, this study suggests that since permanent employees’ expectation of a long-term relationship can facilitate social exchange associated with building a trust-based relationship, the effect of perceived HRM practices on trust in management and ultimately employees’ creativity will be stronger. Thus, we propose the following moderated mediation hypothesis.
Hypothesis 5 (H5).
The indirect effect of perceived HRM practices on employees’ creativity is stronger for permanent employees than for temporary employees.

3. Methods

3.1. Sample and Data Collection

We developed a survey questionnaire based on prior studies on HRM practices, trust in management, and employee creativity to measure the key variables used in this study. The questionnaires were distributed to researchers and administrative employees in research institutes funded by the Korean government, including the Korea Atomic Energy Research Institute, Korea Research Institute of Standards and Science, Korea Institute of Nuclear Safety, Korea Institute of Nuclear Nonproliferation and Control, Institute for Information Technology Advancement, Science and Technology Policy Institute, Korea Research Institute for Vocational Education and Training, etc. In this study, we selected research institutes because the employee creativity to which we pay attention is an essential factor for a research context. Specifically, since the key performance metrics of the research institutes funded by the Korean government are reports, papers, and patents, it is important for the research institutes to enhance employees’ creativity. The research institutes used in this study belong to the National Research Council of Science and Technology and the National Research Council for Economics, Humanities, and Social Sciences. Out of a total of 51 research institutes belonging to the institutions, we randomly selected 14 research institutes, accounting for about 27 percent. We visited the research institutes that had been chosen in advance and distributed 350 questionnaires, considering the size distribution of the research institutes. After three weeks, of the 350 questionnaires distributed, 312 questionnaires were retrieved from the respondents. Of the 312 questionnaires, we finally used 285 questionnaires for data analysis after excluding 27 incomplete or unfaithful responses, yielding a response rate of 81.4 percent. In our sample, men accounted for 72.6 percent of the respondents. The average age of the respondents was 35.5 years. The average tenure of the respondents was 6.2 years. 25.6 percent of the respondents hold a bachelor’s degree. 55.8 percent of the respondents hold a master’s degree. A total of 18.6 percent of the respondents hold a doctorate degree. The type of employment was comprised of permanent employment and temporary employment, and permanent employment accounted for 74.4 percent of the respondents.

3.2. Measures

3.2.1. Perceived HRM Practices

We measured employees’ perceptions of HRM practices using 29 items obtained from prior empirical studies on HRM practices or newly developed for this study. We assessed eight practices demonstrated in the previous empirical studies: employment security [38], selective hiring [39], education and training [38], participation in decision making [38,40], fair performance appraisal [38,40], reduction of status differences, retirement management, and benefits package. The eight practices were rated using a five-point Likert scale ranging from (1) “strongly disagree” to (5) “strongly agree.” Table 1 shows all items’ questionnaires regarding HRM practices used in this study and the result of exploratory factor analysis for eight HRM practices.

3.2.2. Trust in Management

Trust in management, the mediating variable, was measured using four items from Cook and Wall [41]’s six-item questionnaire associated with trust in management: (1) “Management at my firm is sincere in its attempts to meet the workers’ point of view”; (2) “Our firm has a poor future unless it can attract better managers(reverse-coded)”; (3) “Management can be trusted to make sensible decisions for the firm’s future”; (4) Management at work seems to do an efficient job.” The items were measured using a five-point Likert scale ranging from (1) “strongly disagree” to (5) “strongly agree.”

3.2.3. Type of Employment

The moderating variable, type of employment, was measures as a dichotomous variable that was coded one for permanent employees, and otherwise was zero.

3.2.4. Employees’ Creativity

The dependent variable, employees’ creativity, was designed and measured using Farmer, Tierney, and Kung-Mcintyre’s [42] four-item creativity scale. We used employee self-reports of their creativity rather than using the original four items measured as supervisor assessments of employees. The revised items for employees’ creativity are as follows: (1) “I try new ideas and methods first”; (2) “I seek new ideas and ways to solve problems”; (3) “I generate ground-breaking ideas related to the field”; (4) “I am a good role model of creativity.” Employees responded to the items on a five-point Likert scale ranging from (1) “strongly disagree” to (5) “strongly agree.”

3.2.5. Control Variables

To rule out alternative explanations, we controlled for employee gender, age, educational level, and tenure. Employee gender was measured as a dichotomous variable that was coded zero for female and one for male. Employee age was measured in years. We measured educational level using categorical variables such as master’s degree and doctorate degree. Bachelor’s degree was a reference group. We included employee tenure, which was measured as subtracting the year of entering a company from the given survey year.

3.3. Analyses

Empirical analyses were performed as follows. First, exploratory factor analyses of the items for HRM practices, trust in management, and creativity were employed with varimax rotations to identify the common factors. We included items with communalities greater than or equal to 0.5 and extracted factors with eigenvalues greater than or equal to one based on a conventional rule of thumb [43]. Second, we conducted confirmatory factor analyses to validate the latent constructs. Third, we computed Cronbach’s alpha coefficients for internal consistency reliability for the items. Fourth, we performed hierarchical regression analyses for our suggested hypotheses. Fifth, we tested the indirect effect of perceived HRM practices on creativity via trust in management using a bootstrapping approach with 5000 iterations. Finally, we analyzed that the strength of the mediating effect and its dependence on the value of employees’ trust in their managers using an SPSS macro invented by Preacher, Rucker, and Hayes [44].

4. Results

Table 1 exhibits the result of the exploratory factor analysis for perceived HRM practices. The result shows that the cumulative variance explained by the eight-factor model of perceived HRM practices was 81.15 percent, indicating that the eight-factor model of perceived HRM practices is appropriate for our statistical analysis.
All items for the eight factors of perceived HRM practices were adequately loaded on the theoretical constructs used in this study. We also found that the standardized factor loadings exceed 0.5, ensuring the construct validity. The results of the confirmatory factor analysis (CFA) are available from the authors upon request. The observed correlations among the subordinate constructs of perceived HRM practices were so high that we further tested the convergent and discriminant validity. As shown in Table 2, the construct reliability and average variance extracted (AVE) values of the eight latent constructs exceeded the acceptable thresholds of 0.7 and 0.5, respectively. To ensure the discriminant validity of the latent constructs, we compared the square root of every AVE with any correlation among the specific constructs. According to a rule of thumb, the square root of all the AVE should be greater than any other correlations. The highest correlation was between perceived HRM practices and trust in management (r = 0.73; p < 0.01). Specifically, since perceived HRM practices, the independent variable, were measured as an additive composite index of the weighted average of the eight subordinate constructs, it is necessary to verify whether the eight subordinate constructs differ from ‘trust in management’, a superordinate construct. The correlations between the eight subordinate constructs (ES, SH, ET, FPA, PDM, RSD, RM, and BP) and the superordinate construct ‘trust in management’ were 0.22, 0.62, 0.51, 0.68, 0.60, 0.48, 0.54, and 0.49, respectively. The square root of the smallest AVE (0.74) is greater than the highest correlation (0.68), thereby ensuring the discriminant validity between them.
Finally, we employed the second-order CFA to identify whether perceived HRM practices can be a superordinate construct of the eight subordinate constructs. As shown in Table 2, the goodness-of-fit indices were χ2(d.f.) = 1086.96(598), χ2/d.f. = 1.818 (p < 0.001), GFI = 0.832, CFI = 0.945, IFI = 0.946, TLI = 0.939, and RMSEA = 0.054, indicating that our theoretical constructs used in this study were adequate for the subsequent empirical analysis.
Table 3 presents descriptive statistics, pairwise correlations, and reliability coefficients among the key variables used in this study. Correlation coefficients are low to moderate. To avoid a problem of multicollinearity, we checked variance inflation factor (VIF), a commonly used method for detecting multicollinearity. Since all VIF values, ranging from 1.19 to 3.1, were well below the threshold value of 10, multicollinearity does not seem to be serious in this study [45].
Table 4 shows the hierarchical regression results for employees’ trust in management and creativity. Model 1 is our base-line equation of the trust in management model. Hypothesis 1 suggests that perceived HRM practices are positively related to trust in management. As shown in Model 2 of the trust in management equation, the estimated coefficient of perceived HRM practices was significant and positive (p < 0.01). Thus, Hypothesis 1 was supported. Model 4 is our base-line equation of the creativity model. Model 5 shows that employees’ trust in their managers was significantly and positively related to creativity (p < 0.01). Thus, Hypothesis 2 was supported. Hypothesis 3 states that the link between perceived HRM practices and employees’ creativity is mediated via employees’ trust in their managers. We tested the mediation hypothesis using the Baron and Kenny’s [46] method. First, the independent variable must be related to the dependent variable. Second, the independent variable must be related to the mediating variable. Third, the mediating variable must be related to the dependent variable. Fourth, when the independent and mediating variables are entered the regression model, the strength or significance of the independent variable must be attenuated or dissipated. Model 6 of the creativity equation shows that the perceived HRM practices were significantly and positively related to employees’ creativity, meeting the first condition of mediation. As shown in Model 2 and 5, the second and third conditions for mediation were met. Finally, both perceived HRM practices and trust in management were entered the creativity model, perceived HRM practices were not significant while trust in management remained significant, implying full mediation. To further identify the indirect effect, we performed Preacher and Hayes [46]’s bootstrap approach with 95 percent confidence intervals generated by a bootstrapping procedure with 5000 iterations. We found that the indirect effect of perceived HRM practices on creativity was 0.18 and that the 95 percent confidence interval was 0.048 to 0.317. Since this test did not zero in the confidence interval, we concluded that there is a significant mediation effect. Thus, Hypothesis 3 was supported. Model 3 of the trust in management equation shows that the interaction effect of perceived HRM practices and type of employment on trust in management was significant and positive (p < 0.01). Thus, Hypothesis 4 was supported. Hypothesis 5 suggests that the conditional indirect effects of perceived HRM practices on employees’ creativity via trust in management at two types of employment. The result is shown in Table 5. Our finding indicates that the conditional indirect effect is significant when types of employment are temporary employment and permanent employment. As shown in Table 5, the positive relationship between perceived HRM practices and trust in management is stronger for permanent employees than for temporary employees. We performed Hayes’s [47,48] PROCESS macro for SPSS to test the conditional indirect effects of two types of employment. As shown in Table 6, the index of the moderated mediation was 0.067, and the 95 percent confidence level was 0.018 to 0.143. Since zero was not included in the confidence level, we concluded that there are significant conditional indirect effects of two types of employment. That is, Hypothesis 5 was supported. Thus, our results demonstrate that trust in management as a mediating variable and the indirect effect of perceived HRM practices on employees’ creativity is moderated by the type of employment.

5. Discussion and Conclusions

5.1. Discussion

This study explores the black box of the relationship between perceived HRM practices and employees’ creativity [35]. Building on the literatures on creativity and social exchange theory, this study suggests a moderated mediation model of the relation between perceived HRM practices and employees’ creativity. Specifically, since creativity necessarily involves employees’ risk [20], we propose that employees’ trust in their managers is a key precondition of encouraging employees’ creativity. Drawing on the theoretical perspective, this study advances the argument that the positive relationship between perceived HRM practices and employees’ creativity is mediated by employees’ trust in their managers and that the mediated relationship is stronger for permanent employees than for temporary employees. The empirical results are consistent with our theoretical hypotheses. Employees’ positive perceptions of HRM practices help build a trust-based relationship between employees and their managers, which enables them to explore creative ideas and innovative behaviors. Further, employees’ perceptions of HRM practices are more likely to be effectively activated in building a trust-based relationship for permanent employees than for temporary employees. By extension, the indirect effect of employees’ perceptions of HRM practices on creativity is stronger for permanent employees than for temporary employees. Our findings provide several implications for theory and practice.

5.2. Theoretical and Practical Implications

This study theoretically contributes to sustainable HRM, which is an emerging approach to HRM. Although scholars have different views about the concept of sustainable HRM, they are concerned with improving economic outcomes and sustainability through HRM practices that contribute human and social outcomes. Since, in this paper, we examine the link between perceived HRM practices and trust in management and creativity, human and social outcomes which lead to organizational sustainability, our study would provide support for sustainable HRM.
This study also contributes to the literatures on strategic HRM and creativity. Most scholars studying HRM practices have regarded social exchange theory as an underlying mechanism between HRM practices and individual- or organizational-level outcomes [49,50,51]. As noted by Perry-Smith [21], however, since creativity inherently involves risk, an explanation based on social exchange theory provides only a limited understanding of the link between HRM practices and employees’ creativity. Therefore, we propose that the black box of the relation between employees’ perceptions of HRM practices and employees’ creativity would be unlocked via a trust-based relationship between employees and their managers. In alignment with our theoretical hypotheses, our findings imply that HRM practices should be grounded on individuals’ dignity and trust to derive employees’ autonomous commitment and creativity from the implementation of HRM practices. Therefore, our study sheds new light on trust as an intervening mechanism between HRM practices and creativity.
Given that employees’ creativity is a substantially essential part of creating a sustainable competitive advantage [52], our research results provide a more practical approach to encouraging employees’ creativity. Since employees’ creativity necessarily involves employees’ risk-taking attitudes and behaviors, managers should provide their employees with socioeconomic and psychological support for exploring creative ideas and innovative behaviors. In this regard, building a trust-based relationship between managers and their employees is a precondition of encouraging employees’ creativity. Our findings demonstrate that employees’ trust in their managers, consistently and positively offered HRM practices can facilitate the formation of a trust-based relationship. Accordingly, managers should strive to make employees positively perceive offered HRM practices including employment security, selective hiring, education and training, fair performance appraisal, participation in decision making, reduction of status differences, retirement management, and benefits package as a synthesis of supporting the employees by providing a consistent and strong signal of HRM practices, thereby leading to the employees’ higher trust in management. Our empirical results also show that, as depicted in Figure 2, a trust-based relationship between employees and their managers is stronger for permanent employees than for temporary employees. This implies that the strength of trust is dependent on the expected length and continuity of an employee-manager relationship. As such, if possible, it would be desirable to assure employees’ job security to facilitate the formation of employees’ trust in their managers because it takes a long time to build an unwavering trust relationship.

5.3. Limitations and Future Research

Despite the theoretical and practical implications of this study, some limitations should be noted. First, although we believe that our empirical results do not seem to result in biased estimates, there may be a potential for common method bias because our study uses self-reported survey data to test our hypotheses. To avoid a problem associated with common method bias, we used Harman’s single factor test [52]. The result of Harman’s single factor test shows that one major factor accounts for 39 percent of the covariance, indicating that common method bias does not seem to be serious in this study [53]. Numerous scholars have also argued that self-reports do not result in biased estimates that may be attributed to respondents’ considerations of social desirability [54,55,56,57,58]. In particular, since our study presumes that employees perceive and respond to HRM practices in different ways, a self-reported survey used in this study is more relevant and valid than other-reported surveys. Second, although our findings in the context of research institutes funded by the Korean government contribute to understanding employees’ creativity, it may be difficult to generalize our results.
In sum, this study explores the black box of the link between perceived HRM practices and employees’ creativity. It seems that employees’ trust in their managers is an underlying mechanism between perceived HRM practices and creativity. This is because a high level of employees’ trust in management encourages them to propose creative ideas and to attempt innovative behaviors, thereby leading to enhanced employees’ creativity. Moreover, the strength of a trust-based relationship is contingent on type of employment, and it is stronger for permanent employees than temporary employees. This implies that to improve employees’ creativity, research institutes should endeavor to provide employees with job security. Therefore, it is important for managers to consider how to use employees from a long-term perspective.
Our research provides a richer and meaningful understanding of employees’ creativity by highlighting the role of trust in management, which has been relatively neglected in the literatures of HRM practices and creativity. We hope that our research becomes a catalyst for future research.

Author Contributions

Conceptualization and Writing—original draft, J.L. (Juil Lee); Data curation, S.K.; Conceptualization, J.L. (Jiman Lee); Writing—review & editing, S.M.

Funding

This work was supported by the National Research Foundation of Korea Grant funded by the Korean Government (NRF-2017S1A3A2065831).

Conflicts of Interest

The authors declare no conflict of interest.

References

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Figure 1. A theoretical model of perceived HRM practices, type of employment, trust in Management, and employee creativity.
Figure 1. A theoretical model of perceived HRM practices, type of employment, trust in Management, and employee creativity.
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Figure 2. The estimated effect of the interaction between perceived HRM practices and type of employment on trust in management.
Figure 2. The estimated effect of the interaction between perceived HRM practices and type of employment on trust in management.
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Table
Table 1. Items used for HRM practices and the result of exploratory factor analysis for HRM practices.
Table 1. Items used for HRM practices and the result of exploratory factor analysis for HRM practices.
ItemsFctr 1Fctr 2Fctr 3Fctr 4Fctr 5Fctr 6Fctr 7Fctr 8
Employment Security
Employees in this job can expect to stay in the organizations for as long as they wish. .797
Job security is almost guaranteed to employees in this job. .724
If our company were facing economic problems, employees in this job would be the last to be cut. .812
Selective Hiring
Our company is trying to recruit competent people. .649
Our company invests a lot of time to recruit people. .805
Our company invests a lot of man-hours to recruit people. .846
Our company invests a lot of money to recruit people. .780
Education and Training
Extensive training programs are provided for individuals in this job. .826
Employees in this job will normally go through training programs every few years. .789
There are formal training programs to teach new hires the skills they need to perform their jobs. .639
Fair Performance Appraisal
Performance is evaluated by accurate means. .803
Performance is evaluated by objective means. .804
Feedback about performance is provided frequently. .639
In determining compensation, the individual’s contribution is emphasized more than his or her position. .584
Participation in Decision Making
Employees in this job are allowed to make many decisions. .780
Employees are encouraged to suggest improvements in the way we work. .806
Superiors keep open communications with employee in this job. .848
Employees are often asked by their managers to participate in the decision-making process. .729
Reduction of Status Differences
Our company is trying to reduce the wage differential between employment types..831
Our company is trying to transition temporary employees into permanent roles..840
Our company is trying to reduce the benefits differential between employment types..905
Our company is trying to reduce the difference in working conditions between employment types..903
Retirement Management
Our company has an effective retirement management program for employee well-being after retirement. .683
Our company supports employees to create a new life after retirement. .836
Our company helps employees find a new job. .860
Our company has a support program to help retirees start businesses. .844
Benefits Package
Relative to that of other companies, I am satisfied with the level of benefit package. .850
I am satisfied with our company’s benefit package over the last few years. .856
Generally, I am satisfied with our company’s benefit package. .848
Variance after Rotation3.7753.1923.1273.1123.1052.6552.1912.082
Percent of Explained Variance13.0211.0110.7810.7310.71 9.16 7.56 7.18
Cumulative Percent of Explained Variance13.0224.0334.8145.5456.2565.4172.9780.15
Table
Table 2. The results of second-order confirmatory factor analysis.
Table 2. The results of second-order confirmatory factor analysis.
VariablesItemUn. St.
Coeff.		St.
Coeff.		S.E.C.R.pConstruct
Reliability		AVE
High Performance
Work System		ES1.00.47
SH2.06.75.385.370.00
ET1.97.71.375.360.00
FPA2.61.79.495.380.00
PDM2.56.78.465.560.00
RSD1.77.55.345.130.00
RM1.25.62.264.740.00
BP1.87.59.374.990.00
Employment
Security
(ES)		ES11.00.53 .777.555
ES21.47.99.197.860.00
ES30.94.64.109.260.00
Selective
Hiring
(SH)		SH11.00.75 .909.716
SH21.11.85.0715.350.00
SH31.24.93.0913.970.00
SH41.10.84.0813.51.00
Education And
Training
(ET)		ET11.00.87 .837.636
ET21.06.86.0716.080.00
ET30.91.64.0811.430.00
Fair Performance
Appraisal
(FPA)		FPA11.00.94 .896.689
FPA21.03.97.0332.570.00
FPA30.73.71.0515.700.00
FPA40.76.65.0613.490.00
Participation In
Decision making
(PDM)		RM11.00.92 .906.708
RM20.95.85.0519.570.00
RM30.85.78.0516.500.00
RM40.85.82.0518.330.00
Reduction Of
Status Difference
(RSD)		RSD11.00.80 .940.799
RSD21.05.81.0520.950.00
RSD31.27.97.0621.150.00
RSD41.29.97.0621.140.00
Retirement
Management
(RM)		RM11.00.63 .890.674
RM21.19.78.0912.840.00
RM31.40.91.1212.170.00
RM41.43.93.1212.300.00
Benefits
Package
(BP)		BP11.00.90 .948.859
BP21.08.93.0425.470.00
BP31.11.95.0427.170.00
Trust in Management
(TM)		TM11.00.80 .910.716
TM21.08.83.0715.720.00
TM31.15.87.0715.800.00
TM41.05.88.0715.160.00
Creativity
(CR)		CR11.00.89 .860.613
CR21.04.91.0618.340.00
CR30.77.70.0613.450.00
CR40.71.58.0710.570.00
Goodness-of-Fit Indicesχ2(d.f.) = 1086.96 (598), χ2/d.f = 1.818 (p < 0.001)
GFI = 0.832, CFI = 0.945, IFI = 0.946, TLI = 0.939, RMSEA = 0.054
Table
Table 3. Descriptive statistics and correlations.
Table 3. Descriptive statistics and correlations.
VariablesMeanS.D.123456789
1. Gender1.270.45
2. Age35.565.78−0.31 **
3. Tenure6.244.87−0.12 *0.73 **
4. Master’s degree0.560.500.06−0.110.03
5. Doctorate degree0.190.39−0.110.45 **0.10−0.54 *
6. Type of employment0.750.44−0.100.23 **0.38 **0.120.01
7. Perceived HRM practices2.980.57−0.06−0.04−0.11−0.02−0.010.06(.94)
8. Trust in management2.840.83−0.01−0.13 *−0.20 **−0.04−0.01−0.16 **0.73 **(.92)
9. Creativity3.330.61−0.090.13 *0.01−0.070.18 **−0.050.25 **0.29 **(.87)
N = 285, * p < 0.05, ** p < 0.01.
Table
Table 4. Hierarchical regression analysis results.
Table 4. Hierarchical regression analysis results.
Trust in ManagementCreativity
VariablesModel
1		Model
2		Model
3		Model
4		Model
5		Model
6		Model
7
Constant2.996 **
(.539)		−.119
(.410)		.851
(.448)		2.913 **
(.394)		2.257 **
(.398)		2.139 **
(.424)		2.161
(.418)
Gender−.043.035−.029−.057−.048−.038−.045
(.117)(.080)(.077)(.085)(.082)(.083)(.082)
Age.006−.002−.004.014.013.013.013
(.016)(.011)(.010)(.011)(.011)(.011)(.011)
Master’s degree−.071−.041.027.030.046.037.044
(.118)(.081)(.078)(.086)(.082)(.084)(.083)
Doctorate degree−.055.011.082.205.217.222.220
(.179)(.123)(.118)(.131)(.125)(.127)(.125)
Tenure−.039−.020−.005−.013−.005−.008−.004
(.016)(.011)(.011)(.011)(.113)(.011)(.011)
Type of employment −1.537 **
(.371)
Perceived HRM practices 1.051 **
(0.059)		.821 **
(.099)		 .261 **
(.061)		.066
(.088)
Perceived HRM practices × Type of employment .394 **
(.122)
Trust in management .219 **
(.042)		 .186 **
(.061)
F2.60 *56.81 **51.00 **2.43 *6.77 **5.16 **5.88 **
R2.045.551.597.042.128.100.129
Adj. R2.027.541.585.025.109.081.107
N = 285, * p < 0.05, ** p < 0.01, Standard errors are in parentheses.
Table
Table 5. Conditional indirect effects of two types of employment.
Table 5. Conditional indirect effects of two types of employment.
Conditional Indirect Effects of
Two Types of Employment		Boot Indirect EffectBoot SEBoot LLCIBoot ULCI
Permanent employment.142.055.043.267
Temporary employment.209.076.062.363
N = 285, Bootstrap sample size = 5000.
Table
Table 6. Index of moderated mediation.
Table 6. Index of moderated mediation.
MediatorIndexBoot SEBoot LLCIBoot ULCI
Trust in management.067.031.018.143
N = 285, Bootstrap sample size = 5000.

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Lee, J.; Kim, S.; Lee, J.; Moon, S. Enhancing Employee Creativity for A Sustainable Competitive Advantage through Perceived Human Resource Management Practices and Trust in Management. Sustainability 2019, 11, 2305. https://doi.org/10.3390/su11082305

AMA Style

Lee J, Kim S, Lee J, Moon S. Enhancing Employee Creativity for A Sustainable Competitive Advantage through Perceived Human Resource Management Practices and Trust in Management. Sustainability. 2019; 11(8):2305. https://doi.org/10.3390/su11082305

Chicago/Turabian Style

Lee, Juil, Sangsoon Kim, Jiman Lee, and Sungok Moon. 2019. "Enhancing Employee Creativity for A Sustainable Competitive Advantage through Perceived Human Resource Management Practices and Trust in Management" Sustainability 11, no. 8: 2305. https://doi.org/10.3390/su11082305

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