Abstract This project aims to explore the meaning and significance of high performance work organization. It also aims to integrate the diverse literatures on High Performance Work Organizations (HPWO). Varied definitions of the HPWO are presented, common components across the definitions are identified, and then each of those components that make up HPWO is examined in more detail. After which the discussion on the link and influence of high performance work systems have on HPWO. Introduction – defining HPWO
In response to the growing complex environment and organizational demands for improved work performance, there has been an escalating discussion on how human resource can initiate work reforms to improve involvement of employees; this is when high performance work organization was brought about. HPWO has characteristics and are identified in the OECD’s definition as an organization that moves toward a flatter and less hierarchical organization structure; a willingness to adopt new working practices; an emphasis on empowerment and teamwork; and high levels of employee participation and learning.
These characteristics are believed to foster motivation, trust, communication, knowledge sharing, and innovation within the organization. The organization also adopted a set of working practices deemed to enhance individual and organizational performance. The concept of the HPWO evolved and is influenced between human resource management and organizational performance.
The Centre for Effective Organizations (CEO) at the University of Southern California, an organization that has been studying high performance work practices for years, defines the HPWO as employee involvement, participative management, democratic management, and total quality management (Lawler, Mohrman and Ledford, 1995). Jeffrey Pfeffer, a professor at Stanford University, includes flexible or lean manufacturing methods and associated employment-relation practices, team-based work, and participation in his definition of the HPWO (Pfeffer, 1998).
William Pasmore, author of Creating Strategic Change: Designing the Flexible, High-performing Work Organization, states that “creating flexible, high-performing, learning organizations is the secret to gaining competitive advantage in a world that won’t stand still. ” (Pasmore, 1994: iv) In an article from the journal of leadership studies, Kirkman et al (1998) points out that high performance work organization’s systems often include a number of human resource policies such as hiring, training, performance management, and compensation intended to enhance employee skills, knowledge, motivation, and flexibility.
HPWOs also involve fewer levels of management and require new roles for managers that remain such as coaching, integrating, and facilitating. Characteristics and components of HPWO After the understanding the definitions of HPWO, it is necessary to know the components of the HPWO. This from what we have gathered would involve aspects of organizational structure, human resource policies, managerial behaviours, and organization culture.
More specifically, these organizational areas are affected by five major components which are: Self-managing work team, employee involvement, total quality management, integrated production technologies and a learning organization Self managing work team (SMWT) As defined by Yeatts & Hytens(1998), self managing work team is a group of employees who are responsible for managing and performing technical task that result in a product or service being delivered to an internal or external customer.
Increasing global competition, sharp reductions in product life cycles, and swift changes in consumer demand patterns have put greater emphasis on the organizational need for and commitment to innovations. With this is mind, Muthusamy et al(2005) believes that self-managed work teams would foster greater autonomy, increase communication among team members, and intensify their commitment to the team and the organization, which in turn enhances innovative behaviors in such teams. Thus this allows organizations to increase innovations for effective competition.
Employee involvement Employee Involvement by Cotton (1993) is defined, described, and explained by how businesses can improve their performance by cultivating employee interest and dedication Jones& Kato (2005) believes that with employee involvement it creates a direct impact of teams resulting from improved motivation and enhanced discretionary effort by team members. By participating in teams, team members suffer less from information asymmetry, and develop more trust in management, stronger commitment to the organization and their goals are more aligned with the firm’s.
The result is improved motivation and enhanced discretionary effort among team members. They also believe that team members would learn skills through participating thus improved performance of team. With team members involvement it would allow team’s goals to be more aligned with firms’ objectives thus engaging in horizontal or peer monitoring. As a result, non-team members are less likely to shirk and thus overall performance also improves (Jones& Kato 2005). Total quality management
TQM is defined by University of Tulsa as a zero-error approach towards improving the quality of processes and systems in an organization. It is said to be a management approach that aims for long-term success by focusing on customer satisfaction. TQM is based on the participation of all members of an organization in improving processes, products, services, and the culture in which they work. Integrated production technologies (IPT) This is defined by Kirkman et al (1999) as a host for manufacturing and service tools that seek to enhance flexibility, increase efficiency, or do both.
This include advanced manufacturing technology, computer aided design/engineering/manufacturing, flexible manufacturing systems. Kirkman et al (1999) believes that a successful integrated production technology implementation requires more on management than on technology. Until equal attention is given to structure, planning, conflict resolution, team functioning, champion skill development, as critical to successful introduction of IPT, success will remain elusive. Learning organization
In order for a HPWO to be successful, Kirkman et al (1999) suggest that the company must be more proficient at knowledge sharing; dissemination of knowledge and acquisition; development of insights rather than knowledge utilization; integrating information into organizational memory. How these five components integrates and be utilized to create a HPWO would be, for example, a learning organization can use information to stay abreast of changing supplier and customer demands. Flexible production systems can be used to reconfigure internal operations to fit changing customer demands.
Employee involvement and self managing work teams could be used to tap the human resource with the intent of being flexible and adaptable to survive turbulent times. Finally, TQM could be used to better define suppliers and to meet customer’s standards HPWO and the link to Human Resources management High performance work organization has become part of the discussion in human resource management. How an organization can be transformed to high work performance is closely related to human resource structuring and the adaptation of high performance work system by the human resource department.
High performance work systems (HPWS) are systems of managerial practices that increase the empowerment of employees and enhance the skills and incentives that enable and motivate them to take advantage of this greater empowerment (Appelbum et al 2000). The issue here on HPWS is to understand how these systems can be used to improve performance in all organizations and how it acts as the mediating link between HR systems and organization outcomes.
This would involve studying the difficulties and complexities that can arise and this have been term by researches as organizational ‘black box’ (Purcell et al 2003) and (Wright& Gardner 2004). As adapted from Purcell& Hutchinson (2007) and Wright& Gardner (2004), the figure in appendix 1 shows the links between intended HR practices that leads to actual HR practices then perceived HR practices and then to employee reactions and lastly to organizational performance.
In the earlier part of the chain, it emphasis that more often than not, there is a difference in what management says they will do and what they actually do for their staff. This involves line managers like supervisors who have the responsibility of carrying out management’s intentions involving HRM into actual practices. The second part of the link illustrates that if management wants a certain outcome for the organization, it must first influence employee beliefs, attitudes and behaviour.
As it is stated by Boxall& Macky (2007), employee behaviour is critical to whether the desired organizational outcomes will be achieved; this is influenced by employee’s perceptions of HR practices. What usually undermines employee trust and loyalty which affects performance outcomes is the major gap between management intentions and the perceptions. It is also stated that stronger ties between line managers and their team can be created if the teams trust managers to be a person of competence and integrity ( Boxall& Macky 2007).
The possibility of the gaps between actual and perceived underlines not only the need for managers to know what exactly they want to achieve and then follow through to their pledges, this achieves greater consistency in their own behaviour ( Legge 2005) As a case study of Ms Selfridges, a fashion retail organization, seen in Purcell& Hutchinson (2007) states that the senior management took a greater interest in the selection, development, support and motivation of front-line managers, they in turn manage front line employees and managed to enhance employee satisfaction, commitment and performance.
The advantages and disadvantages of high performance work organizations Advantages The main advantage for Singapore companies is found in Butt at el (2009) article that empowered employees from HPWO were indeed more likely to be satisfied with their jobs, feel greater commitment to the company, and perform well. Similarly, the employees were less likely to experience job-related stress. In essence, with empowerment it appears to benefit organizations. This would be by which, high performance work organizations be defined by using high-involvement work practices and work systems ultimately influence employee outcomes valued by management.
With a proper high performance work system such as the one discussed earlier, Organizations may facilitate the relationship between high-involvement work practices and positive employee outcomes such as higher job satisfaction, organizational commitment, and job performance as well as lower stress (Butt et al 2009) With relation to Singapore contemporary issue such as the upcoming integrated resort, Haynes& Fryer (2000) believes that HPWO will allow hotel operators to improve revenue and customer retention through HR systems that empowers front-line employees to personalise service.
They should therefore be interested in practices that will support a high quality competitive strategy in this industry. Disadvantages Kirkman et al (1999) mentions in the article that not all organization maybe able to successfully implement the five components, for example, TQM would not be suitable for companies that rely on complex and dynamic environment that requires innovation- which most Singapore companies increasingly are. As implementing strategies for high performance work organizations, it involves high investment in terms of monetary and human resource.
The results of these attempts to redesign work might not be successful and have raised questions as to overall success and usefulness in long term. Mullins (2005) state that programmes such as ‘quality of life’ movement of the 1970s, TQM, present strategies involved with high performance work systems reveals conflicting evidence of their efficiency. Thus Singapore companies, not only Singapore companies must ensure that they carefully plan and implement strategies towards a successful high performance work organizations.
On the contrary, with regards to hotel industry, high performance work practices are unlikely in mass services where customers are price conscious and willing to engage self-service to keep prices low ( Boxall 2003). Conclusion Boxall & Macky 2007 suggest that it is important for companies to know the difference between manufacturing and services: while modern high-tech manufacturing often has the capability to deliver better quality and low prices, while investing heavily in employee deployment, retention, improvements in service industries generally translate into a price premium.
If customers resist to price increase, the options for HPWO are more constrained. In summary, HPWO practices are concerned with identifying the market or technological situations in which firms have an interest in changing HR systems which enable empowerment, skills, and rewards for workers. Companies need to recognise the need to be careful with specific practices that are needed in the high performance work model. Companies need to customise practices to their specific situations and also look internally to the links from management intentions to their practices and employee responses and lastly outcomes.
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