HRM - High-Performance Work Systems

13.
HIGH-PERFORMANCE WORK SYSTEMS

Teaching notes
Learning outcomes of session
The session will cover:
The characteristics of a high-performance culture
The characteristics of a high-performance work system (HPWS)
The components of an HPWS
Impact of an HPWS
Developing an HPWS
Key concepts and terms

In addition, definitions will be provided of the following concepts and terms:
High-commitment management
High-commitment model
High-involvement management
High-performance culture
High-performance management
High-performance work systems (HPWSs)
Performance management model
Contents
These notes contain:
An outline of the session
Definitions of key concepts and terms
Questions and discussion points
A bibliography
Session outline
The key characteristics of a high-performance culture
People know what's expected of them they understand their goals and
accountabilities.
People feel that their job is worth doing, and there is a strong fit between
the job and their capabilities.
Management defines what it requires in the shape of performance

improvements, sets goals for success and monitors performance to ensure that
the goals are achieved.
There is a focus on promoting positive attitudes that result in an engaged,

committed and motivated workforce.
Performance management processes are aligned to business goals to

ensure that people are engaged in achieving agreed objectives and standards.
Capacities of people are developed through learning at all levels to

support performance improvement.
The characteristics of a high-performance work system (HPWS)
Links the firms selection and promotion decisions to validated

competency models.
A basis for developing strategies that provide timely and effective support
for the skills demanded to implant the firms strategies.
Enacts compensation and performance management policies that attract,

retain and motivate high-performance employees.
The components of an HPWS
There is no magic list of best practices for an HPWS, although they work
best if bundled together.
The lists that have been produced include sophisticated HR practices in

such areas as recruitment, learning and development, performance management
and reward processes. Typical lists are shown in the following table.
Components of an HPWS
US Department of Labor (1993)
Appelbaum et al (2000)
Sung and Ashton (2005) Thompson and Her
Careful and extensive systems

Work is
fororganized
recruitment,
to permit
selection
High-involvement
front-line
and training.
workers work
to participate
practicesin decisions
eg self-directed
Information
that alter
teams,
sharing.
organizational
quality circles,
routines.
and sharing/access
Formal systems for sharing
Workers
information
require
with
more
employees.
skills to
Human
do their
resource
jobs successfully,
practices eg
and
sophisticated
many of
Sophisticated
these
recruitment
skills recruitment.
are firm-specific.
processes, performance appraisals,
Clear job design.
Workers experience greater Reward
autonomy
andover
commitment
their job tasks
practices
and methods
egFormal
various
of induction
work.
financial programme.
rewards, family friendly policies, job
High-level participation processes.
Incentive pay motivates workers to extend extra effort on developing
Five
skills.
or more days of off-the-job training in the last yea
Monitoring of attitudes. Employment security provides front-line workers with a long-term stake
Semiinorthe
totally
company
autonomous
and a reason
work teams;
to invest
continuous
in its futur
im
Performance appraisals
Interpersonal skill development.
Properly functioning grievance procedures.
Performance feedback.
Promotion and compensation schemes that provide for the recognition and reward of high-performing
Involvement
employees.
works council, suggestion scheme, opin
Team-based rewards, employee share ownership sche
Table 12.1 Lists of HR practices in high-performance work systems
Impact of an HPWS
A number of studies demonstrate that the impact of high-performance work
systems is positive. Examples are:
US Department of Labor (1993): in a survey of 700 organizations, the US

Department of Labor found that firms that used innovative human resource
practices had an HPWS.
King (1995): a survey of Fortune 1000 companies in the United States

revealed that 60 per cent of those using at least one practice increasing the
responsibility of employees in the business process reported that the result was
an increase in productivity, while 70 per cent reported an improvement in quality.
Varma et al (1999): a survey of 39 organizations was conducted to

examine the antecedents, design and effectiveness of high-performance
initiatives. Results indicated that HPWSs had a significant impact on financial
performance and created a positive culture change in the organization (eg
cooperation and innovation).
Appelbaum et al (2000): a survey of 4,400 employees and 44

manufacturing facilities found that in the steel industry HPWSs produced strong
positive effects on performance, in the apparel industry the introduction of group
piecework rates linked to quality as well as quantity rather than individual
piecework, plus multi-skilling, dramatically speeded up throughput times, and in
the medical electronics and imaging industry those using an HPWS ranked highly
on eight diverse indicators of financial performance and production efficiency

and quality.
Sung and Ashton (2005): a survey of 294 UK companies provided evidence

that the level of HPWS adoption as measured by the number of practices in use
is linked to organizational performance. Those adopting more of the practices as
bundles had greater employee involvement and were more effective in
delivering adequate training provision, managing staff and providing career
opportunities.
Developing an HPWS
The approach to developing an HPWS is based on an understanding of what the
goals of the business are and how people can contribute to their achievement.
This leads to an assessment of what type of performance culture is needed. The
steps required are:
1.
Analyse the business strategy.
2.
Define the desired performance culture of the business and the objectives
of the exercise.
3.
Analyse the existing arrangements.
4.
Identify the gaps between what is and what should be.
5.
Draw up a list of practices that need to be introduced or improved.
6.
Identify the practices that can be linked together in bundles to
complement and support one another.
7.
Assess practicality.
8.
Prioritize.
9.
Define project objectives.
10.
Get buy-in.
11.
Plan the implementation.
12.
Implement.
Definitions of key concepts and terms

High-commitment management A form of management aimed at eliciting a
commitment so that behaviour is primarily self-regulated rather than controlled
by sanctions and pressures external to the individual, and relations within the
organization are based on high levels of trust (Wood, 1996).
High-commitment model (Guest, 2007) A move from external control through
management systems, technology and supervision to self-control by workers or
teams of workers who, because of their commitment to the organization, would
exercise responsible autonomy and control in the interests of the organization.
The emphasis is on intrinsic control and intrinsic rewards.
High-involvement management A specific set of human resource practices that
focus on employee decision making, power, access to information, training and
incentives.
High-performance culture One in which the values, norms and HR practices of
an organization combine to create a climate in which the achievement of high
levels of performance is a way of life.
High-performance management An approach that aims to make an impact on
the performance of the organization through its people in such areas as
productivity, quality, levels of customer service, growth and profits.
High-performance work systems (HPWS) Bundles of practices that facilitate
employee involvement, skill enhancement and motivation. They can constitute:
An internally consistent and coherent HRM system that is focused on solving
operational problems and implementing the firms competitive strategy (Becker
and Huselid, 1998).
Performance management model (Guest, 2007) An approach that focuses on
the adoption of practices designed to maximize high performance by ensuring
high levels of competence and motivation.
Questions and discussion points

1.
What is a high-performance culture?
2.
What is the distinction between high-commitment, high-involvement and
high-performance work systems?
3.
What are the characteristics of a high-performance work system?
4.
What are the components of a high-performance work system?
Bibliography
Appelbaum, E, Bailey, T Berg, P and Kalleberg, A L (2000) Manufacturing
Advantage: Why high performance work systems pay of, ILR Press, Ithaca, NY
Armitage, A and Keble-Allen, D (2007) Why people management basics form the
foundation of high-performance working, People Management, 18 October, p 48
Ashton, D and Sung, J (2002) Supporting Workplace Learning for High
performance, ILO, Geneva
Becker, B E and Huselid, M A (1998) High performance work systems and firm
performance: a synthesis of research and managerial implications, Research on
Personnel and Human Resource Management, 16, pp 53101, JAI Press,
Stamford, CN
Becker, B E, Huselid, M A, Pickus, P S and Spratt, M F (1997) HR as a source of
shareholder value: research and recommendations, Human Resource
Management, Spring, 36 (1), pp 3947
Becker, B E, Huselid, M A and Ulrich, D (2001) The HR Score Card: Linking
people, strategy, and performance, Harvard Business School Press, Boston, MA
Ericksen, J (2007) High performance work systems: dynamic workforce alignment
and firm performance, Academy of Management Proceedings, pp 16
Gephart, M A (1995) The road to high performance: steps to create a highperformance workplace, Training and Development, June, p 29
Godard, J (2004) A critical assessment of the high-performance paradigm, British
Journal of Industrial Relations, 42 (2), pp 34978
Guest, D (2007) HRM: towards a new psychological contract, in (ed) P Boxall, J
Purcell and P Wright, Oxford Handbook of Human Resource Management, Oxford
University Press, Oxford
King, J (1995) High performance work systems and firm performance, Monthly
Labour Review, May, pp 2936
Lawler, E E (1986) High Involvement Management, Jossey-Bass, San Francisco,
CA
Lawler, E E, Mohrman, S and Ledford, G (1998) Strategies for High Performance
Organizations: Employee involvement, TQM, and re-engineering programs in
Fortune 1000, Jossey-Bass, San Francisco, CA
Nadler, D A (1989) Organizational architecture for the corporation of the future,
Benchmark, Fall, 1213
Nadler, D A and Gerstein, M S (1992) Designing high-performance work systems:
organizing people, technology, work and information, Organizational
Architecture, Summer, pp 195208
Ramsay, H, Scholarios, D and Harley, B (2000) Employees and high-performance
work systems: testing inside the black box, British Journal of Industrial Relations,
38 (4), pp 50131
Stevens, J (2005) High Performance Wales: Real experiences, real success, Wales
Management Council, Cardiff
Sung, J and Ashton, D (2005) High Performance Work Practices: Linking strategy
and skills to performance outcomes, DTI in association with CIPD, available at
http://www.cipd.co.uk/subjects/corpstrtgy/
Thompson, M and Heron, P (2005) Management capability and high performance
work organization, International Journal of Human Resource Management, 16 (6),
pp 102948
US Department of Labor (1993) High Performance Work Practices and Work
Performance, US Government Printing Office, Washington DC
Varma, A, Beatty, R W, Schneier, C E and Ulrich, D O (1999) High performance
work systems: exciting discovery or passing fad?, Human Resource Planning, 22
(1), pp 2637
Walton, R E (1985) From control to commitment in the workplace, Harvard
Business Review, MarchApril, pp 7784
Walton, R E (1985) Towards a strategy of eliciting employee commitment based
on principles of mutuality, in (ed) R E Walton and P R Lawrence, HRM Trends and
Challenges, Harvard Business School Press, Boston, MA
Wood, S (1996) High commitment management and organization in the UK,
International Journal of Human Resource Management, 7 (1), pp 4158
Wood, S and Albanese, M (1995) Can we speak of a high commitment
management on the shop floor?, Journal of Management Studies, 32 (2), pp 215
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13.

HIGH-PERFORMANCE WORK SYSTEMS

Key concepts and terms

Management defines what it requires in the shape of performance

There is a focus on promoting positive attitudes that result in an engaged,

Performance management processes are aligned to business goals to

Capacities of people are developed through learning at all levels to

Links the firms selection and promotion decisions to validated

Enacts compensation and performance management policies that attract,

The lists that have been produced include sophisticated HR practices in

Sung and Ashton (2005) Thompson and Her

Careful and extensive systems

Table 12.1 Lists of HR practices in high-performance work systems

US Department of Labor (1993): in a survey of 700 organizations, the US

King (1995): a survey of Fortune 1000 companies in the United States

Varma et al (1999): a survey of 39 organizations was conducted to

Appelbaum et al (2000): a survey of 4,400 employees and 44

on eight diverse indicators of financial performance and production efficiency

Sung and Ashton (2005): a survey of 294 UK companies provided evidence

Analyse the business strategy.

Analyse the existing arrangements.

Identify the gaps between what is and what should be.

Draw up a list of practices that need to be introduced or improved.

Define project objectives.

Plan the implementation.

Definitions of key concepts and terms

Questions and discussion points

What is a high-performance culture?

What are the characteristics of a high-performance work system?

What are the components of a high-performance work system?

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