high performance work systems (hpws). hr alignment planning and job design recruiting and selection...

High Performance Work Systems(HPWS)

HR Alignment

Planning and Job Design

Compensation

EmployeeRelations

Recruiting and Selection

Training and Development

Performance Management

HR Alignment

Planning and Job Design

Compensation

EmployeeRelations

Recruiting and Selection

Training and Development

Performance Management

INTERNAL FIT

HR Alignment

Planning and Job Design

Compensation

EmployeeRelations

Recruiting and Selection

Training and Development

Performance Management

INTERNAL FIT

High-Performance Work System

A specific combination of HR practices, work structures, and processes that maximizes employee knowledge, skill, commitment, and flexibility.

Systems composed of many interrelated parts that complement one another to reach the goals of an organization, large or small.

Developing High-Performance Work Systems

Underlying Principles

EgalitarianismEgalitarianismEgalitarianismEgalitarianism

Shared Shared InformationInformation

Shared Shared InformationInformation

Performance-Performance-Reward Reward LinkageLinkage

Performance-Performance-Reward Reward LinkageLinkage

Knowledge Knowledge DevelopmentDevelopment

Knowledge Knowledge DevelopmentDevelopment

HPWS

HPWS

HPWS

HPWS

Underlying Principles

EgalitarianismEgalitarianism““Decision Power”Decision Power”

EgalitarianismEgalitarianism““Decision Power”Decision Power”

Shared Shared InformationInformation““InformatioInformatio

n”n”

Shared Shared InformationInformation““InformatioInformatio

n”n”

Performance-Performance-Reward Reward LinkageLinkage

““Rewards”Rewards”

Performance-Performance-Reward Reward LinkageLinkage

““Rewards”Rewards”

Knowledge Knowledge DevelopmentDevelopment““Knowledge”Knowledge”

Knowledge Knowledge DevelopmentDevelopment““Knowledge”Knowledge”

HPWS

HPWS

HPWS

HPWS

Principles of HPWS

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.

Principles of HPWS (cont’d)

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.

Principles of HPWS (cont’d)

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.

Principles of HPWS (cont’d)

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.

Anatomy of High-Performance Work Systems

Complementary Practices

StaffingStaffingStaffingStaffing

Training and Training and DevelopmentDevelopment

Training and Training and DevelopmentDevelopment

CompensationCompensationCompensationCompensation

Ensuring Fit

Internal fit The situation in which all the internal elements of the

work system complement and reinforce one another.

External fit The situation in which the work system supports the

organization’s goals and strategies.

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?

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

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

Build a Transition Structure

Implement High-performance Work

Incorporate the HR Function as a Valuable Partner

Navigating the Transition to High-Performance Work Systems

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?

Evaluating the Success of the System (cont’d) 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?

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’d) Organizational Outcomes and Competitive

Advantages Higher productivity Lower costs Better responsiveness to customers Greater flexibility Higher profitability

Employee Involvement Power

Authority to change job processes? Self-managed teams

Information Is business information shared? Does the job involve performance feedback?

Knowledge Does the employee have proper training for the job?

Rewards Are rewards contingent on individual performance?

Employee Involvement

Locating work decisions at the lowest level possible.PowerInformationRewardsKnowledge and skills

EI in the Fortune 1000150 Companies1999 Survey

Low EI

Med EI

High EI

ROA 9.3 9.7 11.2

ROI 14.2 15.7 17.1

ROE 23.4 20.7 26.6

Market Return -.7 2.8 11.9

Market/ Book .7 1.3 1.8

Lawler, Mohrman & Benson, 2000