High Performance Working

Executive Summary

        Change is always a challenge as well as an opportunity. Today’s Human resource managers face great challenge to accustom with the changing business and workplace contexts and thus they try to convert their organizations in to High Performance Working systems with the right combination of people, process, technology and organizational structure.

        The High Performance Working has recently gained growing attention from the Human Resource managers and organizations. Becoming a high performance working organization is considered to be a difficult task because all the relevant and necessary elements must fit with others so that the system can function smoothly. The High Performance working system is a corrective measure because many other tools and measures of management like just-in-time manufacturing, customizing, total quality management and flexible manufacturing technology can be better functioned only when there people who fit the specific requirements.

No process can work out when right people are no there. High Performance Working system looks not only at technology or process, but it seeks to find talented and qualified people who can meet the specific requirements. Organizations with High Performance Working have been found to be successful as they have experienced increase in productivity and very static long term profitability. This research work identifies IBM as an organization that has effectively used Organizational learning as a method to become High Performance Working organization.

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This piece of research work examines the fundamental principles and theories of High Performance working and it analyses how an effective high performance working can help an organization achieve its goals. This paper presents an in-depth analysis of various elements of High Performance working and it draws an example from IBM which has brought tremendous changes in its business with the help Organizational Learning.

Introduction

        When compared with momentous changes that occurred over the recent years in technology, lifestyles, workplace environment and business contexts, the Human Resource Management seems to have accustomed with the changes and it has evolved major developments by implementing various strategies and methods that help organizations face the challenges and achieve its goals. The changes in the technology and in the business contexts cause changes in the workplace. High Performance Working is thus a new interdisciplinary model of Human Resource Management that comprises of people, technology, and process.

        Noe, Hollenbeck and Gerhert (2003) stated that Human Resource Management has been playing its vital role helping organizations gain the competitive advantages over their competitors by becoming high performance working organization.

        This report analyses the features and underlying principles of high performance working and it examines the impacts of high performance working on the levels of management systems within IBM which has recently achieved high performance working with help of organizational learning. This research work presents an in-depth analysis of high performance working and its advantages to the organization in which it is implemented.

High Performance Working

        Pfeffer (1994) argued that the success in dynamic and highly competitive market environment depends less on advantages associated with economies of scale, technology, patent, access to capital, but, it depends more on innovation, speed and adaptability. Pfeffer (1994) argued that innovation, speed and adaptability are derived from the employees within an organization and from the way they are managed. Organizations seek to adapt to the changes by adopting a number of managerial practices that are called high performance or high involvement human resource system (Guthrie, Flood and Liu, 2009).

        Dessler and Varkkey (2009) argued that research evidences show that the best-performing companies in a wide range of industries perform well because of their high performance working. High performance working is an integrated set of human resource management practices and tools that together produce superior employee performance. Many qualitative and quantitative researches have proved that high performance working is directly influencing the overall performance of the employees by increasing their productivity. The specific objective of this system is to attain superior employee performance.

        According to Noe, Hollenbeck and Gerhert (2003), high performance working is a system in which an organization has best possible fit between their social system (people and their interaction) and technical system (equipment and processes). Pfeffer (2001) stated that implementing high performance working requires major up-front investments including training, more selective recruiting, higher wages and so forth.

The technology, the structure of the organization, people and processes all work together to gain an advantage in the competitive market. When technology changes and the functional areas of the business like transportation, communication and manufacturing are being changed, the Human Resource Management must ensure that the organization has right and talented people who are able to meet the challenges of changes. While an organization implements and maintain high performance working system, it may have to develop effective training programs, recruiting people for specific skills and encouraging organizational learning and teamwork (Noe, Hollenbeck and Gerhert, 2003).

        Several organizational outcomes including higher productivity, increased profitability, lower costs, better responsiveness to customer and greater flexibility are the results of high performance working. Implementing high performance working has become a difficult task because it cannot easily be copied from other organizations and there must be good deal of better partnering among executives, line managers, HR professionals, union representatives and employees (Bohlander and Snell, 2009).

        High performance working is a system of working that promises an increase of around 20 percent in the productivity if staffs are motivated, involved and offered autonomy (Research Forum, 2006). High Performance working generally includes selective hiring, extensive training, pay based on performance, workplace empowerment and sharing of organizational knowledge (Yalabik and Chen, 2008).

Features of High Performance working and its specific triggers

        Even though there no hard rule about what comprises of High Performance Working, most organizations and Human Resource management perceive that following are the common practices of High Performance working.

• Employment security and selective hiring
• Extensive training and knowledge sharing
• Self managed teams and decentralized decision making
• Reduced status distinction between managers, and
• Transformational leadership (Dessler and Varkkey, 2009)

One of the main triggers of high performance working is the market problems. Fierce competition in the market and organizational disparities among counterparts play vital role in encouraging organizations to implement high performance working. During the early 1980s, when Canon and Xerox went head on head in the copier markets, Xerox introduced the practice of High Performance working to face the competition and to beat the counterpart (Ashton and Sung, 2002).

        Introduction of the new technologies remains to be another trigger for the implementation of high performance working system. OECD researches have shown that foreign ownership has also linked to the use high performance working and its wide acceptability throughout the organizations worldwide and especially in the United States (Ashaton and Sung, 2002). The market fluctuations, introduction of newer technologies and economic changes are the main triggers of High Performance working.

The role of employee responses

        The employees play mediating role in the high performance working system. The literatures show that High Performance Working is linked to a number of employee practices and employee responses (Macky and Boxall, 2007, Boxall and Macky,2009). Employees are often placed as the central to mediating the outcomes that an organization experiences due to high performance working.

        The High Performance Working is directly influencing the performance of employees as it helps increase their productivity and by developing their interpersonal skills and abilities. Employees are highly motivated in an organization that functions with system of High Performance Working and these employees are provided of greater opportunities to make use of their knowledge, experiences and skills.

        In an organization that works as High Performance System employee capability is being set upper limit of performance, motivation is directly impacting the degree to which this capability is turned in to an action and opportunities are enhanced as venue for them to express their skills Macky and Boxall (2007).

Basic Elements of High Performance Working

        Human Resource Management plays significant role in implementing various elements of High Performance working like organizational structure, design, selection and training of people, reward system and learning organization. As there are pressures for performance in a very dynamic and competitive environment, human resource managers seem to gravitate toward improving the efficiency of existing organization’s structure by implementing new strategies that help gain competitive advantages (Ashkenas and Ulrich, 2002).

Noe, Hollenbeck and Gerhert (2003) identified the following elements of High Performance Working.

1. Organizational Structure

        The structure of an organization is the way it combines its people in to useful groups, departments and reporting relationship (Noe and Hollenbeck, 2003). A better designed organizational structure will be highly effective to promote the working of various management groups. The top management within an organization decides the total design and levels of managements like how many employees should be there under a particular supervisor.

Task Design

        Task design is the way the necessary activities of an organization are grouped. Task design makes the tasks to be done efficient and it encourages quality in the operation (Noe and Hollenbeck, 2003).

Right People

        Selecting right people is the very critical aspect of Human Resource Management. People being selected must fit the tasks to be assigned to them. Right people are the very basic and inevitable element of the High Performance System. In designing and developing a high Performance System, the Human Resource Management must put efforts to find qualified and skilled people who will fit the specific requirement of the business.

Reward System

        Jackson and Hitt (2003) emphasized that reward is the most powerful tool out of all available Human Resource strategies. It is a strategy that not only motivates the employees but ensures increased productivity and employee cooperation as well. Reward system is another important element of High Performance Working, because it serves dual aspects that it directs attention of employees to the most important specific requirements and also it motivates them to put their efforts.

Information system

        It is the final element of High Performance Working system by which managers have to take decision regarding what kinds of information to be gathered and from what sources it can be collected. The information system determines the scope of information that who can access the information and how can they retrieve organizational knowledge.

        An information system of an organization is closely related to knowledge management practice which is the process of enhancing business performance by designing and implementing systems, tools, strategies, process and people so as to create knowledge, share and use it for the further benefits of the organization (Noe, 2002).

Conditions that Contribute to High Performance Working

        Noe, Hollenbeck and Gerhert (2003) identified certain factors that contribute to the high performance working in an organization. According to him, Teamwork, Knowledge share, incentives, employee empowerment and reward are the main factors that directly influence the High Performance Working.

Teamwork

        High Performance System will work more effectively in an organization where employees are engaged in team work, cooperation and collaboration. Teamwork is a highly important tool of organizational culture that leads to knowledge share and it thus brings better performance. The teamwork refers to the ability of staffs to work together and their expertise in cooperation by assessing team skills with trust and good communication between them (Austin and Claassen, 2008).

Knowledge Share

        Knowledge share and knowledge slow between workers helps an organization perform well. An organization in which knowledge is freely transferred between its employees can make better ways to achieve success through the implementation of High Performance Working. According to Rothwell and Sterns (2008), employees can be encouraged by team learning by fostering interaction among older and younger workers. This will enable each employee learn from his or her counterparts and therefore it helps foster knowledge share among the workers.

Outcomes of High Performance Working

        High Performance Working results higher productivity and increased efficiency and these in turn contribute to higher profits (Noe, Hollenbeck and Gerhert, 2003). An organization with the help of High Performance Working can achieve high product quality, better customer service and customer satisfaction, lower rate of employee turnover and increased employee involvement and cooperation (Luthans, 2005).

        Gephart and Buren (2002) hold the view that all the companies with high performance may not pursue the same business strategies. Some business may go for low cost or customer services, while others rely on innovation, speed and so forth. A company with High Performance Strategy may give greater emphasis on highly skilled and knowledgeable or experienced employees, customer satisfaction and reliable products and services.

        A survey conducted in 1993 by Center for Effective Organization has proved that companies that used employee involvement and High Performance Working had substantially higher levels of financial success than those companies that didn’t use same strategies. Companies that increasingly used High Performance Working excelled at return on sales return assets and return on investments as well (Gephart and Buren, 2002).

        According to survey conducted by Sloan Foundation, companies with high performance working in the steel industry have been found that those companies had 7 % higher productivity, 13 % increased product quality and better service quality than those companies with less High Performance Working system (Gephart and Buren, 2002). It is obvious that High Performance Working helps organizations increase the employee productivity, motivate employees, achieve high product and service quality and gain customer satisfaction and so on.

Workplace Learning for High Performance Working

        Ashton and Sung (2002) argued that the use of workplace as a learning experience has been transformed over recent years. There are three main reasons for this. First is the growth of Knowledge economy, second is the impact of new economy and information and communication technology and the third is the increased use of High Performance Working system. Organizational learning has become a significant part of High Performance Working system.

        As stated earlier, one of the important elements of High Performance Working is Information system. It is not only the system of how information is stored or made use of it, but, it denotes the comprehensive practices involved in making the workplace a learning atmosphere as well. It can be well connected with knowledge management practices.

        The spread of High Performance Working has created more opportunities within employees to learn and develop themselves, to improve their skills and not just as in the professional or craft occupations (Ashton and Sung, 2002).

The case of IBM: An organizational Learning example

        IBM Corporation is a multinational computer technology corporation that has succeeded in its business pathway through a number of marketing and Human Resource strategies. IBM remains to be an illuminating example for making its workplace a knowledge creating environment and learning experience. Being an organizational learning example, IBM has implemented a strategy for High Performance Working that makes people, process and technology more adjusted to the changing environment.

        The organizational learning of IBM is basically a customer-driven strategy which has been considered to be effective as it can enable the company adapt to the environmental, cultural and other changes. From the words of Ted Hoff, the vice president of the organizational learning system, IBM has a very special heritage and commitment to learning. This culture is ingrained in all the senior executives. The IBM senior management expects always conducting learning and they are going to develop employees by developing new ideas (Sosbe, 2003).

        When IBM was under the direction of Vincent Learson, he started conducting serious conversation with senior level management in order to find most effective strategies. Based on situation analysis and future market anticipation, a newly appointed committee suggested IBM to implement an organizational learning process by maintaining 360 new line computers only for the use of management and employees. It was the strategic beginning of organizational learning at IBM and it still goes on as strategic movements to achieve high performance working in the organization (Lipshitz, Popper and Friedman, 2006).

        IBM’s organizational learning can be viewed as a strategic approach for becoming a High Performance Working organization. As discussed by Ashton and Sung (2002), organizational learning is a step forward to become High Performance Working system in an organization. Organizational learning and its strategies enhance employee learning through various methods and tools like knowledge share, retaining older employees for knowledge transfer etc and these in turn motivate employees to learn and develop their skills. Finding right people for the fit for specific requirements is the very crucial stage in High Performance Working. But, organizational learning is an easy way to find and make use of right people for the right need. Instead of searching people from outside, organizational learning and knowledge management helps organizations get right people from within the employees.

        IBM has become one of the renowned computer technology corporations with a very strong market share. IBM has achieved its success through various strategies including organizational learning that helped IBM become High performance working organization.

Conclusion and Recommendations

        This research work presents the theories and practices of High Performance Working and it analyses various elements of the system. This paper outlines the outcomes of High Performance Working and the case of IBM has been included to describe how organizational learning has been effectively used by IBM so as to make it a High Performance Working organization.

        It is very obvious that companies with High Performance Working are found more productive, highly successful in customer satisfaction, improved product and service qualities and so forth than those companies that didn’t use High Performance working. Organizations that seek further development in its core competencies and total output must turn their attention towards this growing trend of High Performance working system.