Professor Xiaobei Li | How Companies Can Harness HR Management to Thrive in a Changing World

Li’s team conducted three research projects on different aspects of HR management. In one project, they investigated the role of innovation, and explored an interesting question: “Are performance-based rewards sufficient to encourage innovation?”. To answer this, they used responses from 1589 employees and 186 managers in 29 organisations across 10 countries.

Their findings showed that performance rewards are more effective at encouraging innovation when HR processes are clear and supportive, and when the culture of the country where the organization is embedded is accepting of ambiguity, uncertainty and change. This emphasises the importance of HR practices and employees’ understanding of them.

In their second project, the team investigated the intriguing question: “Will companies’ investment in employees enhance performance?” To find out, they explored data from over 9,000 companies across more than 30 provinces.

They discovered that when employee quality in a region is low, the way a business manages and develops its staff has a bigger impact on company performance. When a company focuses on innovation strategy, the effect is even stronger.

In their third project, Li’s team investigated the role of leadership. As organisations become increasingly complex, leaders face contradictory demands. They are required to focus on the company while also focusing on its employees. Li calls this “paradoxical leader behaviour”.

Her team highlights the alignment between this concept and the yin-yang philosophy. The yin-yang philosophy views the world as a holistic, dynamic environment, where two opposing yet interdependent forces shape all phenomena.

The team used a sample of 76 supervisors and 516 subordinates from 6 firms. By examining the extent to which leaders display paradoxical behaviour, they assessed how successful this mode of leadership is.

Their findings showed that leaders who think holistically and understand complexities tend to exhibit paradoxical leader behaviour. Leaders who embrace this are more effective in complex environments, leading to better employee performance. This challenges traditional leadership approaches and emphasises the importance of cognitive flexibility.

For companies to thrive in our complex, changing world, they need to understand how to motivate their workforce. Li’s research reveals the vital importance of HR management and recommends approaches encouraging high-quality performance.