HUMAN RESOURCE PRACTICES, FAILURE MANAGEMENT APPROACHES AND INNOVATIONS IN SERBIAN PUBLIC ADMINISTRATION.

• Author: Radonic, Milenko

1. Introduction

   Recently, a broad body of scholarly work has been devoted to the practices of human resource development in public administration (Miao et al., 2017). Human resource practices have been recognized as a paramount antecedent of innovation and intellectual capital creation. Most of the concurrent research in public administration is centered around leadership potential or strategic features of human resources (Manning, 2010). Unfortunately, only a few have attempted to depict and explore the relationship between human resource practices and innovation in public administration.

   On the other hand, the notion that the private sector has been overwhelmed with the explanation of the importance of HR development for the creation of intellectual capital is to some extent intriguing. For instance, Kianto, Saenz and Aramburu (2017) recognize human resource management as a key enabler of intellectual capital and innovation. However, Uslu (2015) finds significant differences in the interaction of HR practices and innovation between public and private sectors. Additionally, organizational behavior theory has pervasively touted failure as a prerequisite for learning and innovations (Mueller and Shepherd, 2016). This failure-innovation interplay, however, is not salient to the private sector only. Nonetheless, this relationship has been out of research radars in the realm of public administration research.

   General reasons for this research gap have been vividly discussed in the existing literature (Milosavljevic, Milanovic and Benkovic, 2016). For instance, Chow, Xiao and Wen (2018) emphasize that public administration 'has been suffering from three maladies, namely, reductionism, traditionalism, and conservatism, which together reinforce mediocrity'. That being said, the lacuna in the present body of knowledge seeks to be fulfilled.

   The aim of this paper is to examine and explore the relationship between high-performing human resource practices and the creation of intellectual capital and consequent innovations in public administration in Serbia. More precisely, the paper aims to explore how human resource practices (training and development, promotion, job security, internal communication and work design) can be used to foster rather than hinder innovation (service, process, organizational and communication innovation), and how bureaucracies as hierarchical structures can overcome the traditional inertial lack of dynamism. Scholars still have limited insight into how human resource development interacts with innovation, let alone public administration. Also, Serbian public administration has been an unexploited field (Milosavljevic, Milanovic and Benkovic, 2017). This paper is particularly focused on controlling the previously defined model for failure management practices. In essence, the study will address the impact of tolerance to failure or failure analysis on innovation in public administration.

   The remainder of the paper proceeds in the following order. Section 2 examines prior literature and develops the hypotheses. Section 3 depicts the research methodology by explaining variables, measures and research instrument, sampling procedure, and data collection and processing. Section 4 provides an overview of the results. Section 5 discusses and contextualizes the study findings and explains the main contributions and implications for theory and practice. This section ends with concluding remarks.

2. Theoretical background

   2.1. Innovations in public administration

   Innovations could be defined as the improvements of the current state or the creation of new ideas. In the realm of public administration, they have been thoroughly analyzed in the last few decades (Hartley, 2005). A myriad of different typologies has been proposed. In the same study, the term innovation has been distinguished using the following typology: product innovation, service innovation, process innovation, position innovation, strategic innovation, governance innovation and rhetorical innovation. In a systematic review of innovation in the public sector, De Vries, Bekkers and Tummers (2016) collected the recent researches and listed service, organizational, process and communication innovations as the main classes of innovations.

   What drives or pushes back innovations in the public sector has been vastly examined in the literature. To name a few--citizen centrism has been advocated to facilitate public services innovation (Cicvaric Kostic et al., 2013). Technology and digitalization play an important role in establishing the necessary infrastructure needed to spur innovation (Scupola and Zanfei, 2016). On the other hand, bureaucratic structure of the public organizations usually slows down the process of organizational learning and change management (Rashman, Withers and Hartley, 2009; Gray, Broadbent and Hartley, 2005; Hartley, 2005; Martin, 2005). Moreover, low tolerance to any potential failures in bringing innovations in the public administration could discourage employees from changing any routine or experimenting with new services, processes or organizational changes (Mazzucato and Semieniuk, 2017).

   Bureaucracies are not a fertile ground for innovations. Although innovations can hardly be imposed, the innovation process can be managed. Van de Ven (2017) infers that 'the process of developing innovations from concept to implementation follows a remarkably similar pattern'. Almost anecdotally, the public sector lacks good mechanisms and tools for empowering service, process, organizational or other innovations (Rashman, Withers and Hartley, 2009). An interesting way to boost entrepreneurial spirit, innovation and learning (in the case of the UK) is by converging managers from the public and private sectors (Poole, Mansfield and Gould-Williams, 2006). Nevertheless, a more down-to-earth solution is investment in the development of political appointees and career civil servants to facilitate innovations (Makanyeza, Kwandayi and Ikobe, 2013).

   2.2. High performing human resource practices and innovations

   Human capital has a major role in the overall performance of any organization (Raineri, 2017). The existing literature defines human resources practices (HRP) as the mechanism and set of practices which enhance the motivation and participation of employees, as well as their skills, focusing on better business performance and results. Even though there is not an official and agreed set of practices, some of the frequently cited practices include: training and development, performance-linked compensation and promotion (Raineri, 2017), job security (Shanker et al., 2017), as well as work design (Van der Voet and Van de Walle, 2018) and internal communication (Chandani et al., 2016).

   Training and development as the determinants of high performing human resource practices are highly related to the performance of an organization. Training has been defined by many authors, showing a strong relationship with organizational performance. Some authors also define it as a systematic approach for improving personal and organizational performance (Punia and Kant, 2013). Nonetheless, training affects innovations and vice versa--the needs for innovation in the public sector require certain investments in employee training and development (Gabriyella, Tobing and Tampubolon, 2018). According to Seidle, Fernandez and Perry (2016), leadership training and development programs in the public sector contribute to raising the efficiency and effectiveness of the public sector. In a study by Ko and Smith-Walter (2013), it was shown that HRM practices have an impact on the organizational commitment, job involvement and organizational citizenship behavior as a cause of an increased organizational performance. Simply put, organizational performance is dependent on the training design and programs for leaders in the public sector. While it was shown that economically developed countries significantly invest in training and development of the public sector, despite various interventions and efforts, emerging countries still achieve poor performance due to the lack of investment in this field (Ozioma Obi-Anike and Ekwe, 2014).

   Besides training and development, in emerging and developing countries, recruitment of the top talent represents a big issue (Woo, 2015). Most of the applicants seek job security, fixed working hours and an optimal work-life balance, promotion possibilities and a competitive salary. Due to the change resistance in the public sector, there is an increased need for job security as one of the determinants affecting innovation (Shanker et al., 2017). By analyzing the concept of failing, learning from failures and developing employees, there is a gap between the private and public sectors.

   It could be said that job security, promotion and rewards are closely linked to the performance of employees. Employees which have shown to be motivated by promotion, have an increased level of productivity (Nimri, Bdair and Al Bitar, 2015). Also, rewards and promotion are shown to have a significant impact on employee retention, but do not necessarily have an impact on job satisfaction (Terera and Ngirande, 2014). Therefore, promotion as a motivational factor should be treated separately. Promotion as a phenomenon does not have a straightforward relationship with the performance of employees. The Peter Principle states that firms prioritize current job performance in promotion decisions at the expense of other observable characteristics, which can lead to a managerial mismatch (Benson, Li and Shue, 2019).

   The infrastructure of public organization services is determined not just by the type of service, but also by work design. Work design is related to how the process es are set, but it also represents an important part of the structural capital, as one of the essential elements of intellectual capital (Bukh, Larsen and Mouritsen, 2001). Managerial...