Creating High-Performance Work Systems The Challenges of Human Resources Management

Chapter Objectives After studying this chapter, you should be able to LEARNING OUTCOME 1 Discuss the underlying principles of high performance work systems. Identify the components that make up a high performance work system. Describe how the components fit together and support strategy. Recommend processes for implementing high performance work systems. Discuss the outcomes for both employees and the organization. LEARNING OUTCOME 2 LEARNING OUTCOME 3 LEARNING OUTCOME 4 LEARNING OUTCOME 5

High-Performance Work Systems (HPWS) HWPS Is a specific combination of HR practices, work structures, and processes that maximizes employee knowledge, skill, commitment, and flexibility. Is composed of many interrelated parts that complement one another to reach the goals of an organization, large or small.

Fundamental Principles Egalitarianism and Engagement Egalitarian work environments eliminate status and power differences and, in the process, increase collaboration and teamwork. When this happens, productivity can improve if people who once worked in isolation from (or opposition to) one another begin to work together.

Fundamental Principles (cont.) Shared Information A shift away from the mentality of command and control toward one more focused on employee commitment. Creating a culture of information sharing where employees are more willing (and able) to work toward the goals for the organization.

Fundamental Principles (cont.) Knowledge Development Employees in high-performance work systems need to learn in “real time,” on the job, using innovative new approaches to solve novel problems The number of jobs requiring little knowledge and skill is declining while the number of jobs requiring greater knowledge and skill is growing rapidly.

Fundamental Principles (cont.) Performance-Reward Linkage It is important to align employee and organizational goals. When rewards are connected to performance, employees will naturally pursue outcomes that are mutually beneficial to themselves and the organization.

Complementary Human Resources Policies and Practices Staffing Practices Training and Development Compensation

Management Processes and Leadership Success of any high-performance work system depends on first changing the roles of managers and team leaders With fewer layers of management and a focus on team-based organization, the role of managers and supervisors is substantially different in an environment of high-performance work systems. Managers and supervisors are seen more as coaches, facilitators, and integrators of team efforts.

Supportive Information Technologies Must be added to the framework of high performance work systems Sharing information vital to business performance High-performance work systems cannot succeed without timely and accurate communications Typically the information needs to be about business plans and goals, unit and corporate operating results, incipient problems and opportunities, and competitive threats

Testing the Alignment of the HR system with HR Deliverables (cont.)

Testing the Alignment of the HR system with HR Deliverables (cont.)

Fitting It All Together The HR Scorecard Assessing Internal fit Do all internal elements of the HR system complement and reinforce one another? Assessing HR Practices Do HR practices significantly enable key workforce deliverables such as employment stability and teamwork? Assessing External Fit Are workforce deliverables connected with key strategic performance drivers?

Implementing the System Necessary Actions for a Successful HPWS: Ensure that change is owned by senior and line managers. Allocate sufficient resources and support for the change effort. Ensure early and broad communication. Ensure that teams are implemented in a systemic context. Establish methods for measuring the results of change. Ensure continuity of leadership and champions of the initiative.

Implementing High-Performance Work Systems

Building Cooperation with Unions

Navigating the Transition to High-Performance Work Systems Ongoing activity - never fully completed Best results occur when managers and employees work together The top down approach communicates manager support and clarity, while the bottom-up approach ensures employees accept and are committed to the approach Building a Transition Structure Establishing an implementation plan that provides a timetable and process for mapping key business processes, redesigning the work flow, and training employees can keep the effort from bogging down

Incorporating the HR Function as a Valuable Partner Recruiting, evaluation, and reward systems devised by HR groups can have a huge impact on how well high-performance work systems are implemented. HR managers are in a good position to help employees in transition handle what they are going through

Evaluating and Sustaining the Success of the System Process Audit – Questions? Are employees actually working together, or is the term “team” just a label? Are employees getting the information they need to make empowered decisions, and are they engaged? Are training programs developing the knowledge and skills employees need? Are employees being rewarded for good performance and useful suggestions? Are employees treated fairly so that power differences are minimal?

Evaluating and Sustaining the Success of the System (cont.) Is the program succeeding? – Questions? Are the behaviors the organization desires being exhibited on the job? Are quality, productivity, flexibility, and customer service objectives being met? Are quality-of-life goals being achieved for employees? Is the organization more competitive than in the past? Implementing an HPWS is one thing. Sustaining it is another.

Outcomes of High-Performance Work Systems Employee Outcomes and Quality of Work Life More involved in work More satisfied and find that needs for growth are more fully met More informed and empowered, feel that they have a fuller role to play in the organization and that their opinions and expertise are valued more Have a greater commitment that comes from higher skills and greater potential for contribution

Outcomes of High-Performance Work Systems (cont.) Organizational Outcomes and Competitive Advantages Higher productivity Lower costs Better responsiveness to customers Greater flexibility Higher profitability

Organizational Outcomes and Competitive Advantages Competencies in must have the following qualities: Valuable: High-performance work systems increase value by establishing ways to increase efficiency, decrease costs, improve processes, and provide something unique to customers. Rare: High-performance work systems help organizations develop and harness skills, knowledge, and abilities that are not equally available to all organizations. Difficult to imitate: High-performance work systems are designed around team processes and capabilities that cannot be transported, duplicated, or copied by rival firms. Organized: High-performance work systems combine the talents of employees and rapidly deploy them in new assignments with maximum flexibility.

high-performance work system (HPWS) internal fit external fit Key Terms high-performance work system (HPWS) internal fit external fit process audit

Chapter 16 - Learning Outcomes Learning Outcome Statements Related Outcomes from Body of the Text 1 Discuss the underlying principles of high performance work systems. This textbook has emphasized the goals of competing through people, getting the best from employees, treating them fairly, and building an excellent organization. What key points have you learned in this regard, and how do they tie together in your mind when it comes to managing human resources? 2 Identify the components that make up a high performance work system. Consider the chapters in this book. How do you think the topics of each one tie in with high-performance work systems? Are there any chapters that do not? 3 Describe how the components fit together and support strategy. Have you ever moved a piece of furniture in your house or dorm room and noticed that once you did, everything else needed to be moved, too? How do you think this same principle might work when it comes to high-performance work systems? 4 Recommend processes for implementing high performance work systems. What obstacles do you think managers might face when implementing a high-performance work system? 5 Discuss the outcomes for both employees and the organization. As an employee, how do you think a high performance work system might benefit you personally? What drawbacks might you experience because of such a system?