Creating High-Performance Work Systems Managing Human Resources - Unit 16 Creating High-Performance Work Systems Copyright © 2011 by Nelson Education Ltd.

Managing Human Resources - Unit 16 Learning Outcomes After studying this chapter, you should be able to: 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. Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

High-Performance Work System (HPWS) Managing Human Resources - Unit 16 High-Performance Work System (HPWS) HPWS Is a specific combination of HR practices, work structures, and processes that maximizes employee knowledge, skill, commitment, and flexibility. Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Figure 16.1 Developing High performance Work SystemsIc Managing Human Resources - Unit 16 Figure 16.1 Developing High performance Work SystemsIc Linkage to Strategy System Design: Work Flow HRM Practices Support Technology Principles of High Involvement The Implementation Process Outcomes: Organization Employee Copyright © 2011 by Nelson Education Ltd. Copyright © 2011 by Nelson Education Ltd.

Figure 16.2 Underlying Principles of High-Performance Work Systems Copyright © 2011 by Nelson Education Ltd.

Principles of HPWS Egalitarianism and Engagement Copyright © 2011 by Nelson Education Ltd.

Principles of HPWS (cont’d) Shared Information Copyright © 2011 by Nelson Education Ltd.

Principles of HPWS (cont’d) Knowledge Development Copyright © 2011 by Nelson Education Ltd.

Principles of HPWS (cont’d) Performance-Reward Linkage Copyright © 2011 by Nelson Education Ltd.

Figure 16.3 Anatomy of High-Performance Work Systems Copyright © 2011 by Nelson Education Ltd.

Complementary Human Resources Policies and Practices Training and Development Compensation Staffing Practices Copyright © 2011 by Nelson Education Ltd.

Assessing Strategic Alignment: Fitting It All Together The HR Scorecard Assessing Internal Fit Assessing HR Practices Assessing External Fit Copyright © 2011 by Nelson Education Ltd.

Figure 16.4 Achieving Strategic Fit Copyright © 2011 by Nelson Education Ltd.

Implementing the System Necessary Actions for a Successful HPWS: Copyright © 2011 by Nelson Education Ltd.

Figure 16.5 Implementing High-Performance Work Systems Build a case for change Communicate Involve union Navigate Transition Evaluate Copyright © 2011 by Nelson Education Ltd.

Figure 16.6 Building Cooperation with Unions Copyright © 2011 by Nelson Education Ltd.

Benefits of HPWS Employee Benefits Organizational Benefits Copyright © 2011 by Nelson Education Ltd.

Navigating the Transition to High-Performance Work Systems Build a Transition Structure Implement High-performance Work Incorporate the HR Function as a Valuable Partner Copyright © 2011 by Nelson Education Ltd.

Evaluating the Success of the System Process audit Determining whether a high-performance work system has been implemented as designed: Copyright © 2011 by Nelson Education Ltd.

Evaluating the Success of the System (cont’d) How to determine if a HPWS program is reaching its goals: Copyright © 2011 by Nelson Education Ltd.

Outcomes of High-Performance Work Systems Employee Outcomes and Quality of Work Life Copyright © 2011 by Nelson Education Ltd.

Outcomes of High-Performance Work Systems (cont’d) Organizational Outcomes and Competitive Advantages Copyright © 2011 by Nelson Education Ltd.

Achieving Sustainable Competitive Advantage through Employees Characteristics of Employees’ Competencies Valuable Difficult to Imitate Organized Rare Copyright © 2011 by Nelson Education Ltd.

Highlights in HRM 16.2: The Impact of High-Performance Work Systems Ames Rubber Corporation, a New Jersey–based manufacturer of rubber products and office machine components, experienced a 48 percent increase in productivity and five straight years of revenue growth. Sales at Connor Manufacturing Services, a San Francisco firm, grew by 21 percent, while new orders rose 34 percent and the company’s profit on operations increased 21 percent to a record level. Over a seven-year period, Granite Rock, a construction material and mining company experienced an 88 percent increase in market share, its standard for on-time delivery grew from 68 to 95 percent, and revenue per employee was 30 percent above the national average. At One Valley Bank employee turnover dropped by 48 percent, productivity increased by 24 percent, return on equity grew 72 percent, and profits jumped by 109 percent in three years. The Tennessee Eastman Division of the Eastman Chemical Company experienced an increase in productivity of nearly 70 percent, and 75 percent of its customers ranked it as the top chemical company in customer satisfaction. A study by John Paul MacDuffie of 62 automobile plants showed that those implementing high-performance work systems had 47 percent better quality and 43 percent better productivity. A study by Jeff Arthur of 30 steel minimills showed a 34 percent increase in productivity, 63 percent less scrap, and 57 percent less turnover. A study by Mark Huselid of 962 firms in multiple industries showed that high-performance work systems resulted in an annual increase in profits of more than $3,800 per employee. Source: Martha A. Gephart and Mark E. Van Buren, “The Power of High Performance Work Systems,” Training & Development 50, no. 10 (October 1996): 21-36. Copyright © 2011 by Nelson Education Ltd.

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