According to the European Commission, workplace innovation is a generic term used to describe ‘innovations in the way enterprises are structured, the way they manage their human resources, the way internal decision-making and innovation processes are devised, the way relationships with clients or suppliers are organised or the way the work environment and the internal support systems are designed’.
Workplace innovation aims to increase employee motivation and enhance working conditions. This in turn can impact positively on a range of factors such as productivity, organisational performance and competitiveness. Workplace innovation is often combined with other types of innovation, such as technological innovation.
Eurofound published a report in 2012 on Work Organisation and Innovation (611Kb PDF), based on case study research in 13 EU Member States. According to the findings, pressure to improve performance was the main driver for workplace innovation. The research showed this was particularly true in the context of the current economic crisis, as well as the need to meet the challenges posed by demographic change and increased competition.
Some companies adopted a dual approach to workplace innovation, consisting of a top-down decision to innovate, followed by a bottom-up implementation approach.
The case study evidence in the research suggests that the presence of social dialogue and the involvement of worker representatives make a valuable contribution to the implementation of human resource innovations. It was found that workplace innovation, under the broader label ‘high performance work practices’, led to increased knowledge sharing and problem sharing and solving. Innovatory practices involving lean management, teamworking, flexible working practices, workplace redesign and employee involvement were most commonly associated with positive features such as increased company productivity, greater organisational commitment, improved service quality and, to a lesser extent, reduced customer complaints. Lean management, teamworking and flexible working also contributed to reduced operational costs.
From a longer-term perspective, workplace innovation can contribute to managing an ageing workforce by helping to retain the skills of older workers while maintaining and increasing their productivity levels. Some of the Eurofound case studies highlighted improvements in job security for older workers, who benefited from initiatives targeted at keeping them in the labour force.