Author(s): Sania Khan
Organizations with proper Human Resource (HR) practices play an exemplary role in developing their employees’ innovation. Though there is extensive literature on managing organizational innovation, even in today’s scenario some organizations barricade employees’ growth and innovation at the workplace. This study aimed to holistically explore the organizational factors affecting employee innovation using Principal Component Analysis (PCA) for factorizing sub-items and understand the relationship between various organizational factors and employee innovation using correlation analysis. The study executed a survey questionnaire and collected useful data from two hundred and fifty (250) respondents of various Saudi SME companies. The study developed sub-items and evolved into nine major organizational factors influencing employee innovation namely corporate structure, corporate culture and environment, organization strategy, innovation, employee, technology, resources, knowledge management, and management support. The hypotheses developed were tested with the collected data. The study found all the factors except corporate strategy and corporate culture and environment demonstrated a significant positive relation with employee innovation. The study recommended that any firm must focus on these factors to encourage employee innovation leading to overall organizational success. It also provides broad implications to HR managers, firm policymakers and top management to reassess and formulate the best organizational strategies to promote a culture of innovation in the organization.