High performance work practices
With today's increasing competitive markets together with the current global economic crisis, companies are forced to find ways to remain on top while offering high-end value-added products and services.
A common trend for many organisations is to focus their energy on ways to maximise productivity. High performance is key to organisational success. But what do we mean by high performance and, most importantly, how do we go about developing a high performance culture within an organisation? The answer is: employees.
A growing area in management systems and HR practices focus specifically on enhancing work performance - 'high performance work practices' (HPWPs). Organisations that adopt and implement such practices are considered as high performance work organisations (HPWOs).
HPWPs are not radically 'new' practices; they have been around for many years and have already been adopted by various organisations. What makes this management area different is that HPWPs are deliberately introduced either individually or in groups (called 'bundles' of practices) to gradually improve organisational performance.
These practices are introduced in line with an organisation's strategic objectives to align the output of the workforce with the objectives of the organisation.
A widely accepted definition of HPWPs is that they are a set of complementary work practices covering three broad areas. The first involves high employee involvement practices, which encourage trust and communication between employer and employees. These practices empower employees to take more control over their work and daily operational decision-making. In turn, this leads to higher levels of motivation, leadership, communication and teamwork.
Caring about one's work is essential if we want employees to perform to the best of their abilities. Poorly motivated employees are very often wasted or lost to competitors. Typical practices would include self-directed teams, quality circles and sharing/access to company information.
Employee involvement can only be achieved through a carefully managed process that involves restructuring work to make it challenging, interesting and motivating. Employees at all levels are given information about the organisation's operations and performance so that they may understand where the company is going; this in turn creates job security.
The second area of HPWPs concerns HR practices that focus on human capital investment and skills development within the organisation. Typical HR practices include specific recruitment processes, performance appraisals, work redesign, training and development, strategic work force planning and organisational continuous improvement programmes.
In this context, the HR role must shift from an administrative support function to becoming a business partner in developing and implementing business strategies. This will require companies to take a long-term strategic view of HR resources rather than a short-term operational cost-cutting approach.
The third area of HPWPs considers the issue of reward and commitment, which are intended to create a sense of commitment to the organisation. Financial rewards, such as profit -sharing and share options, offer a sense of belonging to the company, as employees become shareholders within the organisation. Performance-related pay is an important tool in enhancing commitment and a higher performance output. However, one needs to be careful on how to implement performance-related pay systems, as these may create the reverse effect and demotivate and alienate employees.
Financial rewards are not the only tools for higher organisational commitment. Family-friendly policies, flexible work, equal terms and conditions, career progression plans and subsidised training opportunities all have a significant, if not higher, effect of creating a sense of commitment.
Communication is a crucial element to implement high performance work practices within any organisation. Sharing of information on issues, such as financial performance, strategy and operation measures, conveys to employees that they are trusted.
Information is power, which is why sharing of such information is not common practice.
Nevertheless, people need to know and understand what is happening if they are to affect business performance through their output. This brings along the issue of trust between management and employees at all levels within the organisation.
Without trust, employees will never be on board and contribute to the success of the organisation. They will merely do what they are expected to do. Good leadership should foster the feeling that it is acceptable for employees to share ideas, take initiative and be able to take ownership of decisions and processes.
Leadership is an essential element in developing and implementing practices that will truly produce tangible and successful long-term business outcomes.