High Performance Work Systems
(HPWS)

HR Alignment
Employee
Relations
Planning and
Job Design
Compensation
Recruiting and
Selection
Performance
Management
Training and
Development

HR Alignment
Employee
Relations
Planning and
Job Design
Compensation
INTERNAL
FIT
Recruiting and
Selection
Performance
Management
Training and
Development

HR Alignment
Employee
Relations
Planning and
Job Design
Compensation
INTERNAL
FIT
Recruiting and
Selection
Performance
Management
Training and
Development

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

Egalitarianism
Shared
Information
Underlying Principles
Knowledge
Development
Performanc e-Reward
Linkage

Egalitarianism
“Decision Power”
Shared
Information
“Information
”
Underlying Principles
Knowledge
Development
“Knowledge”
Performanc e-Reward
Linkage
“Rewards”

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
Training and
Development
Staffing Compensation

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

Navigating the Transition to
High-Performance Work Systems
Build a Transition
Structure
Implement
High-performance Work
Incorporate the HR Function as a Valuable Partner

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.
 Power
 Information
 Rewards
 Knowledge and skills
ROA
ROI
EI in the Fortune 1000
 150 Companies
 1999 Survey
ROE
Market Return
Market/ Book
Low
EI
Med
EI
9.3
9.7
High
EI
11.2
14.2 15.7
17.1
23.4 20.7
26.6
-.7
2.8
11.9
.7
1.3
1.8
Lawler, Mohrman & Benson, 2000