Developing Employee Innovative Structures

Encouraging employees to be agents in change is difficult due to the lack of theoretical frameworks associated with the new innovative paradigm. To ask an employee who has not contributed before to become a contributing member of organizational development is difficult until they are able to formalize such concepts into a process and then create an internalized routine of the new expectation. Developing employee innovation requires the understanding of bounded rationality and the need to create a methodology that fosters a participative process.

Employees follow a particular pattern and routine throughout their working day (Nelson and Winter, 1982). Even though these routines make for orderly workdays, ease of management, and stability of the organization they do not necessarily improve upon the organizations output. To encourage employees to act purposively, beyond daily routine, requires the ability of employees to deliberatively plan and make decisions (Kirzner, 1997). 

Of course, one cannot expect employees to suddenly become freethinking, mature, and participative employees without changing the way they view their responsibilities to the organization and themselves. In economics, organizations represent bounded rationality. Employees are part of this bounded rationality and this has an impact on the limited scope of their decision-making abilities and the possible outcomes based within the organizational culture (Conlisk, 1996).

To change the poor employee expectations bounded within an organizations culture requires changing and adjusting the processes and routines by which employees operate. The ability to help employees critically think and reflect on their experiences and work practices requires social triggers through group interaction and social exchange (Jensen and Meckling, 1976).  In other words, employee culture and social interaction  with management should change to create higher expectations of performance.

The bounded rationality of organizations must become unbounded and rebounded on new principles and perceptions. Problem solving and innovative employees will require a new way of viewing themselves, their responsibilities, and their potential contributions to the organization. Instead of seeing themselves as process following, unquestioning, and uninspired contributors, they should be encouraged to question and contribute to organizational objectives through strong management-employee relationships that foster collaboration in problem solving.

One of the greatest social exchanges in innovation is between management and employee; management having the ability to use resources to implement ideas and the employees having the ability to find solutions to problems in their daily routines. Managers should create the right atmosphere and positive regard for employee ideas even if such ideas are not practical in the short-term. Employees invest a considerable amount of face and self-image when they bring forward ideas that may be blindly ignored by management despite the merit or benefit of those ideas (Clegg et al, 2002). 

A single negative interaction with a manager will lessen the likelihood of that employee bringing forward those ideas again. Repeated among multiple employees and a culture begins to form with an ever-expanding divide between employees and management. To rectify this situation it may be beneficial for managers to write down ideas, no matter how silly they may seem at the time, and create a running battery of employee ideas for possible future development. A single idea may become a goldmine of resources in the future.

Innovation is not a process of certainty that has specific outcomes from the start. In innovation, ideas develop, transform into practical ideas, and are eventually created for the market. Because innovation is not able to be calculated numerically (Lewis, 2008) the collection of ideas today it can still help formulate future solutions to problems through the hedging of the large group of employees participating in daily organizational functioning. Management must only open up the possibility to the perspective that employees are not as incompetent as they seem.

Providing a useful framework where employees may participate based upon their abilities can be beneficial for developing employee innovative contribution. Management may have the power to implement ideas but employees know if such ideas should be adjusted or disregarded in order to make them more effective. The two responsibilities can be provided into a framework for higher levels of employee-management collaboration.

According to Kesting and Ulhoi (2010) it is possible to create employee driven innovation processes through the following methodology:

-There are managers and employees and each has their own authority level.

-Management innovation decisions are imperfect and only provide a framework.

-Employees must fill out this frame with operative and supportive decisions.

-Through trying this frame employees must go back to management to provide feedback.

-In time employee internalize routines and work off of autopilot until change is needed again.

In this methodology, management provides a framework through their authority and employees try the framework providing constant feedback on its effective utility. When adjustments are necessary, based upon this feedback, management changes the structure to improve the process. Overtime the new processes become routine and work off of processes of internalized expectation until change is needed again. In the process provided by Kesting & Ulhoi employee innovation is a supportive feedback loop to the effectiveness of management decisions. This requires the ability of management to be receptive to this feedback and implement change when necessary.

Clegg, C., Unsworth, K., Epitropaki, O.& Parker, G. (2002), Implicating trust in the innovation process. Journal of Occupational and Organizational Psychology,  75 (4), pp. 409-22.

Conlisk, J. (1996). Why bounded rationality? Journal of Economic Literature, 34, pp. 669-700.

Jensen, M.& Meckling, W. (1976), Theory of the firm: managerial behavior, agency costs, and ownership structure”, Journal of Financial Economics,  3, pp. 305-60.

Kesting, P. & Ulhoi, J.  (2010). Employee-driven innovation: extending the license to foster innovation. Management Decision,48 (1)

Kirzner, I. (1997). Entrepreneurial discovery and the competitive market process: an Austrian approach, Journal of Economic Literature, 35, pp. 60-85.

Lewis, P. (2008), Uncertainty, power and trust.  Journal of Austrian Economics, 21. pp. 103-98.

Nelson, R. and Winter, S. (1982). An Evolutionary Theory of Economic Change. Harvard University Press, Cambridge, MA.

Fostering Cultural Innovation Through Employee Satisfaction

Are satisfied employees more innovative? Research helps to show how fostering the right organization culture leads to both satisfaction and innovation. Such concepts are embedded in social dynamics of a company and create subtle expectations on employees. Those organizations that foster positive interaction and recognition also set the right tone within their populations to overcome market challenges.

Organizational culture can be envisioned as the totality of beliefs, values, knowledge, ideas, and habits that defines the very nature of an organization. Such culture impacts how employees make meaning of their environment and their chosen methods of needs attainment (Olivier, 2008). Through culture an organization can define how it is going to view, understand, approach, and overcome organizational challenges through innovative behavior.

When culture has encouraged beneficial premises that are focused on innovation and problem solving the entire organization can achieve rewards reinforcing additional employee commitment and the financial benefits to the organization. However, before such culture can be appropriately fostered employees should have a minimal level of satisfaction with both the organization and the social structures that exist within the workplace. It is this satisfaction that can lay the framework for expectation and innovation on an organizational socio-cultural scale.

Employee satisfaction can be defined in terms of commitment to the organizations values, the nature of the work, and to other employees. Through this satisfaction and commitment employee will begin to change their perceptions and behaviors to match the needs of their new social group (Adeyinka, Ayeni and Popoola, 2007). Positive social group interactions furthers a sense of unity and similarity in perception and expectations. This can be positive when the workplace fosters constructive ideas or it can be negative when such ideas draw away from self-efficacy.

Employee commitment is further defined through employees complaints, identification with the organization/social group, and overall employee values (Charles, 1986). It is this commitment of values that help employees define their expectations and understanding of the work environment. When commitment to the group entails the ability to produce solutions to problems then innovation becomes a social expectation.

Employee satisfaction also impacts the openness of employees to workplace innovation and its process. Those employees who were satisfied with their jobs also were adaptable, fulfilled and productive which further sets the framework for organizational innovation (Sexena & Vyas, 201). Such employee were open to new concepts as well as the changing roles needed for organizational adjustment. In today's world it is this level of satisfaction and flexibility that creates the commitment to organizational innovative needs and allows companies to adjust to environmental problems.

If one fits within the organization, accepts their social group, and has at least a minimum agreement with the organizational values the employee is likely to be socialized and integrated into the larger cultural network. It is this alignment of values, perceptions and beliefs that create lower organizational costs and can lead to higher levels of motivation and innovation. When signals coming from managers and the organizational structure are  not congruent and confusing the overall socialization process that leads to commitment and satisfaction breaks down.

Positive relationships with management as well as praise and recognition influences both motivation  and satisfaction. A study of 339 employees in ten different wire and cable companies on the Taiwan stock exchange indicated that employees who are innovative, have positive relationships, and receive recognition are more satisfied (Yuan-Duen & Huan-Ming, 2008). The concepts of innovation and satisfaction were based deeply in the environment and its motivational potentials.

The development of higher levels of organizational innovation requires the building of appropriate cultural expectations. Such cultural expectations are based within the social group and the satisfaction the employee feels with his coworkers and managers. By fostering higher levels of positive interaction with organizational members and management, employee satisfaction can raise the level of innovative expectations embedded within the culture. Through solving problems for the self, the social group, and the company an employee can find and make positive meaning out of his/her working life.



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Olivier, S. (2008). Culture Theory. Knowledge Solutions, 22.

Saxena, N. & Vyas, J. (2011). Employees' job satisfaction in power back-up industry: an analytical approach. SIES Journal of Management, 7 (2). 

Yuan-Duen, L. & Huan-Ming, C. (2008). Relations between team work and innovation in organizations and job satisfaction of employees: a factor analytic study. International Journal of Management, 25 (4).