MANA3320-Spring 2010 Prewitt. HWPS ◦ Is a specific combination of HR practices, work structures, and processes that maximizes employee knowledge, skill,

MANA3320-Spring 2010Prewitt

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.

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FIGURE

16.1Developing High-Performance Work Systems

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FIGURE

16.2Underlying Principles of High-Performance Work Systems

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.

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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.

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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.

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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.

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FIGURE

16.3Anatomy of High-Performance Work Systems

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Staffing PracticesStaffing Practices

Training and Development

Training and Development

CompensationCompensation

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?

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FIGURE

16.4Achieving Strategic Fit

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1BDiagnosing Internal Fit

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 +100. 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.

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1CTesting 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 +100. 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.

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.

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FIGURE

16.5Implementing High-Performance Work Systems

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FIGURE

16.6Building Cooperation with Unions

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

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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

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Build a Transition Structure

Implement High-performance Work

Incorporate the HR Function as a Valuable Partner

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?

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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?

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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

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Organizational Outcomes and Competitive Advantages◦ Higher productivity◦ Lower costs◦ Better responsiveness to customers ◦ Greater flexibility◦ Higher profitability

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Characteristics of Employees’ Competencies

Characteristics of Employees’ Competencies

ValuableValuable RareRare

Difficult to ImitateDifficult to ImitateOrganizedOrganized

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2The 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 in Watsonville, California, 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 of Clarksburg, West Virginia, 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 sixty-two 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 thirty 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.

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external fit

high-performance work system (HPWS)

internal fit

process audit