PowerPoint Presentation by Charlie Cook The University of West Alabama 16 © 2010 South-Western, a part of Cengage Learning All rights reserved.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–2 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. Chapter Objectives After studying this chapter, you should be able to X

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–3 High-Performance Work System (HPWS) A specific combination of HR practices, work structures, and processes that maximizes employee knowledge, skill, commitment, and flexibility. Composed of many interrelated parts that complement one another to reach the goals of an organization, large or small.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–4 FIGURE 16.1 Developing High-Performance Work Systems X

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–5 FIGURE 16.2 Underlying Principles of High-Performance Work Systems X

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–6 Principles of HPWS Egalitarianism and Engagement  Egalitarianism means social, political, and economic, rights and privileges in an organization. Doctrine of equality in the workplace.  Everyone participates (all voices count)  Píng ​ děng zhǔ ​ yì ( 平等主义 ), Equality doctrine Píng děngzhǔ yì  Not the same as gòng ​ chǎn zhǔ ​ yì ( 共产主义 ), communismgòng chǎnzhǔ yì  Egalitarian work environments eliminate status and power differences and, in the process, increase collaboration and teamwork.  Very difficult in some cultures  When this happens, productivity can improve if people who once worked in isolation from (or opposition to) one another begin to work together.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–7 Principles of HPWS 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.  HPWS also depends on the richest (face-to-face) communications.  Difficult in some cultures. Many cultures don’t think employees need to have or should have information. Don’t expect employees to communicate. Don’t think employees should contribute to management decisions.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–8 Principles of HPWS 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.  Many organizations around the world must rely more on employee knowledge. Hiring more knowledge workers and less laborers.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–9 Principles of HPWS 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. Ensures more fairness and focuses the employees on the organization.  May be difficult in some cultures because performance- reward is only made at the team level.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–10 FIGURE 16.3 Anatomy of High-Performance Work Systems X

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–11 Complementary Human Resources Policies and Practices Staffing Practices Training and Development Compensation

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–12 Assessing Strategic Alignment: 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?

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–13 FIGURE 16.4 Achieving Strategic Fit X

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–14 1C Testing the Alignment of HR Deliverables Please indicate the degree to which each HR deliverable in the following chart would currently enable each strategic driver, on a scale of –100 to Empty cells indicate this is not a key deliverable for a particular driver. Examples of the extremes and midpoints on that continuum are as follows: –100:This deliverable is counterproductive for enabling this driver. 0:This deliverable has little or no effect on this driver. +100:This deliverable significantly enables this driver. DNK:Don’t know or have no opinion.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–15 Necessary Actions for a Successful HPWS Ensure change is owned by senior and line managers. Allocate sufficient resources and support for the change effort. Ensure early and broad communication. Ensure teams are implemented in a systemic context. Establish methods for measuring the results of change. Ensure continuity of leadership and champions of the initiative.

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–16 FIGURE 16.5 Implementing High-Performance Work Systems X

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–17 FIGURE 16.6 Building Cooperation with Unions X

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–18 Benefits of HPWS Employee Benefits  Have more involvement in the organization.  Experience growth and satisfaction, and become more valuable as contributors. Organizational Benefits  High productivity  Quality  Flexibility  Customer satisfaction

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–19 Build a Transition Structure Implement High-performance Work Incorporate the HR Function as a Valuable Partner Navigating the Transition to High-Performance Work Systems X

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–20 Evaluating the Success of the System Process audit  Determining whether a high-performance work system has been implemented as designed:  Are employees actually working together, or is the term “team” just a label?  Are employees getting the information they need to make empowered decisions?  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?

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–21 Evaluating the Success of the System To determine if a HPWS program is reaching its goals:  Are desired behaviors 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?

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–22 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

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–23 Outcomes of High-Performance Work Systems Organizational Outcomes and Competitive Advantages  Higher productivity  Lower costs  Better responsiveness to customers  Greater flexibility  Higher profitability

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–24 Achieving Sustainable Competitive Advantage through Employees Characteristics of Employees’ Competencies Valuable Rare Difficult to Imitate Organized

© 2010 South-Western, a part of Cengage Learning. All rights reserved.16–25 external fit high-performance work system (HPWS) internal fit process audit

Discussion Questions (page 735) #1 Are the four principles of high involvement sufficient and appropriate for designing HPWS?  Egalitarianism and engagement  Shared information  Knowledge development  Performance-reward linage #2 Can a HPWS be instituted in a an organization that doesn’t use teams? © 2010 South-Western, a part of Cengage Learning. All rights reserved.16–26

Case Studies Page 737, #1 HPWS at Tomex Page 738, #2 HPWS at Xerox © 2010 South-Western, a part of Cengage Learning. All rights reserved.16–27

Team Assignment None for this chapter. © 2010 South-Western, a part of Cengage Learning. All rights reserved.16–28