High performance Work System: A new system for efficient Organizations

By: Prof. Shurlly Tiwari

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Introduction:

Have you ever thought, why work is termed as performance in organizations, there is great demand of Performance in all the organizations across industries.

Employees growth, career, bonus, and retain ability depends on the performance given by the employees. In fact, Organizations performance is also decided based on employee performance.

However, there is a great demand of High performance. Why can’t we call it as “good work”, is being result oriented defines performance.

There is lot to it, in simple words, performance can be defined as actual work performed /expected work performed.

The actual work done by an employee in ratio of its expected work, which should always be greater than one. Now a day, Organizations emphasizes on efficiency and productivity and HPWS is seen as a system to achieve it.

The behaviors, mindsets and stereotypes in a company have a profound impact on its business there is a greater demand of diverse talent from consumer companies, all these are combined under one head and that is HPWS.

What is HPWS?

High Performance Work Systems (HPWS) – also known as high performance work practices, high involvement (HI) or high commitment (HC) practices. The right combination of people, technology, and organizational structure that makes full use of the organization’s resources and opportunities in achieving its goals. (Noe et. al., 2009).

HPWS is a combination of all the HR practices in a much efficient and impactful way. HPWS is now observed as a competitive advantage for the organisation.

HPWS includes three categories of HR practices:

·            Employee skills. (Chi and Lin, 2011)

·            Employee Motivation. (Wright and Mc Mahan, 1992)

·            Employee Empowerment. (Legge, 2005; Way, 2002)

 Why HPWS is important

HPWS helps employees in conceiving, designing, and implementing workplace processes, and perform better. For example, a study analysing 132 U.S. manufacturing firms found that companies using HPWS had significantly higher labour productivity than their competitors did. The key finding was that when employees have the power to make decisions related to their performance, they are more productive (Konrad, 2006).

·    For example, Mark Youndt and his colleagues (Youndt, et. al., 1996) demonstrated that productivity rates were significantly higher in manufacturing plants where the HRM strategy focused on enhancing human capital.

·            Delery and Doty found a positive relationship between firm financial performance and a system of HRM practices (Delery & Doty, 1996).

·     Huselid, Jackson, and Schuler found that increased HRM effectiveness corresponded to an increase in sales per employee, cash flow, and company market value (Huselid, et. al., 1997).

·        Fey and colleagues studied 101 foreign-based firms operating in Russia and found significant linkages between HRM practices, such as incentive-based compensation, job security, employee training, and decentralized decision making, and subjective measures of firm performance (Fey, et. al., 2000).

The concept of HPWS was originated in
2001 in USA, Cappelli and Neumark (2001) trace the term’s popularity to an influential public report, America’s choice: High skills or low wages! It was observed that HPWS helps in increasing the Knowledge, skills and attitude of employees. Role making helps in trust building .It helps in the positive relationship building Greater satisfaction.

There are several factors which effect HPWS  like : Social culture of the organisation , Internal Culture of the Organisation , Attitude of the employees as well as the management , Human Resource Practices , Organisation Culture , leadership  etc. Researches have shown that HPWS helps in Building weak ties within the organisation , Shared mental models , help in Role defining and develops Organisation Citizen ship behaviour, all this leads to helping behaviour , building organisational loyalty , compliance and self -development.

Three parameters of HPWS are:

·         High commitment work system.

·         High involvement work system.

·         High performance human resource management.

Dark side of HPWS

Since the demand of HPWS has increased in the organisations and HPWS aims at competitive advantage. This creates pressure on the employees for the performance, which creates role overload and burnout.

Future of HPWS

HPWS helps improve employee effectiveness and to expect higher levels of organizational performance. The system is created with planning empowered work teams to carry out key business practices. HPWS have a significant and a positive impact on attitudes or behaviours of employees and these attitudes subsequently create “organizational citizenship behaviour” (OCB) of the employees. It is very important for an organization to consistently measure and evaluate the satisfaction and commitment of its employees.

Leading to all these benefits HPWS is been observed as one of the most important and promising system for the corporates.

Conclusion:

I believe that there are three main features of HPWS, which can improve the efficiency and effectiveness of the organisations and they are

·               Trust through Transparency

·               Credibility through Consistency

·               Ownership through Involvement

All the practices point towards creating one effective system in the organisations and that is HPWS. This system will help in potential discovery and development of employees.It help in being task focused ,people focus  and performance delivery of the employees.

References:

·             Barney, J. (1991) “Firm Resources and Sustained Competitive Advantage”, Journal of     Management, 17(1), 99-120.

·             Wright, P. M., McMahan, G. C., and 6 McWilliams, A. (1994). ‘Human Resources and Sustained Competitive Advantage: A Resource-based Perspective’. International Journal of Human Resource Management, 5(2): 301-326.

·             Lado, A. A. and Wilson, M. C. (1994). “Human Resource Systems and Sustained Competitive advantage”: A Competency-Based Perspective”, Academy of Management Review, 19(4), 699-727.

·             Snell, S. A., Youndt, M. A., & Wright, P. M. (1996). Establishing a framework for research in strategic human resource management: Merging resource theory and organizational learning. In G. Ferris, (ed.). Research in Personnel and Human Resources Management, Vol. 14, 61-90.

·            Datta, D., Guthrie, J., & Wright, P. (2005). Human resource management and labor productivi
ty: Does industry matter? Academy of Management Journal, 48(1), 135–145.

·            Chi, N.W., and Lin, C.Y. (2011), ‘Beyond the High-Performance Paradigm: Exploring the Curvilinear Relationship Between High-Performance Work Systems and Organizational Performance in Taiwanese Manufacturing Firms,’ British Journal of Industrial Relations, 49, 3, 486–514.