1. Organizational Behaviour Canadian Edition Schermerhorn, Hunt, Osborn, Currie Prepared by: Joan Condie

2. Chapter 2 The High-Performance Organization

3. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Questions  What is the high-performance context of organizational behaviour?  What is a high-performance organization?  What are the management challenges of high- performance organizations?  How do high-performance organizations operate?

4. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. High-Performance Context of Organizational Behaviour  Changing customer expectations  Competitive environment and demand for high quality and strong service  Focus remains on total quality management, continuous improvement  Needs of customer are paramount

5. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. High-Performance Context of Organizational Behaviour  Changing workforce:  Greater diversity – more women, more visible minorities, aging workforce  Generation X workers – want: greater autonomy, challenging work, flexible work schedules; work in a team; loyalty not important to them  Skill deficiencies – in many high school graduates; in a knowledge-driven economy, lack of basic skills means need for expensive remedial training

6. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. High-Performance Context of Organizational Behaviour  Changing Organizations:  Constant change – sometimes deliberately pursued through process re-engineering  Expanding use of information technology – electronic commerce  Movement towards a free-agent economy – individuals contract their services to a changing mix of employers Concept of shamrock organizations – three leaves comprised of core full-time workers, outside contractors, and part-time workers as needed Concept of shamrock organizations – three leaves comprised of core full-time workers, outside contractors, and part-time workers as needed

7. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. What Is a High-Performance Organization (HPO)? – Five Key Components 1.Employee involvement 2.Self-directing work teams 3.Integrated production technologies 4.Organizational learning 5.Total quality management

8. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Key Components of HPOs 1.Employee involvement  Decision making by employees enhances productivity and satisfaction  Traditional organizations have low involvement (people just do their jobs); HPOs have involvement through participative management (where workers have responsibilities for day- to-day decisions) or empowerment, where workers make many decisions affecting them and their work

9. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Key Components of HPOs 2.Self-directing work teams  Empowered to plan, do, and evaluate their own work  Useful in downsized entity with fewer managers; enhances satisfaction and utilizes employee expertise

10. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Key Components of HPOs 3.Integrated production technologies  Use of technology to make manufacturing and services flexible; extensive use of computers, just-in-time approach  Job design and information systems are included

11. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Key Components of HPOs 4.Organizational learning  Gather information to anticipate change and prepare for adaptation  Information put into the organization’s memory to use in future situations  Share information across functions

12. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Key Components of HPOs 5.Total quality management  Commitment to high quality results, continuous improvement, meeting customer needs

13. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Management Challenges of High-Performance Organizations  Environmental linkages  Internal integration  Middle manager roles  Upper-level leadership  Greenfield sites versus redesigns

14. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Challenge 1: Environmental Linkages  HPO is an open system, influenced by external environment and influencing it in turn  Need to keep tuned in to changes in environment, e.g., changing customer expectations  Need to develop missions or visions that focus all energies on how the organization addresses its inputs (problems and opportunities); involvement of all employees in vision directing is crucial for acceptance  Need to be aware that outputs include not only the product or service provided, but also impact on quality of life of organizational members, impact on society through activities

15. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Challenge 2: Internal Integration  Smooth integration of all five components needed yet not easy  E.g., self-directed teams using production technology, involved in decision making but also working with others above and below, also involved in the decisions relevant to them, tracking appropriate info for organizational learning and maintaining focus on high quality  HPO may be an island within a larger, more traditional organization that may even oppose it

16. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Challenge 3: Middle Manager Roles  Implementing the HPO components can bring challenges that must be addressed by middle managers:  Resistance from employees (e.g., prefer individual work)  Resistance from managers (fear loss of traditional role; uncomfortable with move to being facilitators and coaches)  Tensions between components (e.g., total quality management (TQM) focus on quality may conflict with demands from involved employees to address other aspects of concern)

17. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Challenge 4: Upper-Level Leadership  Deciding how many HPO components to use  May only be comfortable with 1 or 2, not all 5  Trying to extend North American business practices internationally  Self-directing teams and employee involvement won’t be adopted easily in countries where status, power, and prestige are basic work values  Workers with appropriate training may not be available  Training & development of middle managers, whose roles are drastically changing and who may resist

18. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. Challenge 5: Greenfield Sites versus Redesigns  Greenfield site = starting the HPO from scratch  Best success record  Redesigning a traditional organization  Less success than greenfield sites but more successful than unchanged traditional organizations  Why would it be easier to create a successful organization on a greenfield site than through transforming an already-existing organization?

19. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. WestJet Airlines: An HPO Example  Employee involvement – flat, lean hierarchy, with extensive empowerment; heavy team emphasis  Integrated production technologies – internet technology used for ticketless travel, dispatch, revenue management, parts replacement  Organizational learning – sharing of business information through letters and newsletters to employees, recovery/learning centre doubles as back- up for main computer and training facility  TQM – “WestJet Spirit” comprised of strong work ethic, strong desire for quality work, desire to go beyond the call of duty, helping others, “doing the right thing”

20. Schermerhorn, Hunt, Osborn, Currie Organizational Behaviour, Canadian Edition Copyright 2005 John Wiley & Sons Canada, Ltd. WestJet Airlines: An HPO Example  Other HPO aspects  Has clear mission and vision, reflected in core values and company culture  Hiring supports culture and mission through emphasis on “WestJet Spirit”, values of hard work and fun  Profit-sharing; over 80% of employees are shareholders; these compensation policies support motivation and commitment  Successful adaptation to environmental changes despite fierce competition

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