April 27, 2013 by suhailfarooq29
By Suhail Farooq, MSc in Management Consulting 3 student
One of the fundamental principles of strategic human resource management is to evaluate how organizational performance is influenced by the way employees are managed. To support this assessment, various measures have been taken in human resource practices that have been found to improve employee effectiveness and to expect higher levels of organizational performance. Some of these measures include high-performance work systems, high-commitment work systems, high-involvement work systems, and high-performance human resource management. No matter how much these systems may differ in the approach of enhancing the employee effectiveness, their conjoint track is that organizations can achieve high performance by adopting practices that recognize and leverage employees’ ability to create value .To create maximum impact these practices are most effective when they are implemented in bundles because of their mutual effects on performance.
HPWS are a specific combination of HR practices, work structures, and processes that maximize employee knowledge, skill, commitment, and flexibility – with the aim of enhancing employee effectiveness. High-performance work systems are complex structures, and are formulated out of several interrelated components. Characteristically, the system is created with planning empowered work teams to carry out key business practices. All the Team members are selected and trained on technical, problem-solving, and interpersonal skills.
All the components of the HPWS are important in terms of how they help the entire system to function. The effectiveness of HPWS requires the system to have both the internal and external fit. To make sure the system if fit internally, all the component’s should support and complement each other like the leadership team should work in tandem with the human resource practices and the work flow should be supported by well-developed technology and when the system is aligned with the competitive urgencies of the organization like enhanced employee satisfaction, well developed company values and competitive challenges the system on a whole it achieves external fit as well. There are two fundamental mechanisms on which high-performance work systems influence performance outcomes and these are based on human capital and skill on the one hand, and motivation and commitment on the other. Over the period of time various studies have been performed to understand the direct effect of High performance HR practices on the performance of different functions in an organization. Also studies have been performed to understand the indirect effect of HPWS practices by influencing employee attitudes and discretionary behaviors. HPWS have a significant and a positive impact on attitudes or behaviors of employees and these attitudes subsequently create what is called the organizational citizenship behavior (OCB) of the employees. These studies have also concluded that the functional performance was affected both directly by HPWS and indirectly through organizational citizenship behavior (OCB) of the employees. The effective implementation of high performance work systems benefits both the employees and the organization. Employees are found to be more involved in the organization, experience better growth and satisfaction, and become more valuable as contributors. The organization also benefits from high productivity, quality, flexibility, and customer satisfaction. A multi-dimensional change initiative is required from all the stakeholders of an organization to implement high-performance work systems. This provides an organization with a sustainable competitive advantage. It is very important for an organization to consistently measure and evaluate the satisfaction and commitment of its employees. If the employees are not performing up to the expectations of the organization, it’s very possible that they not very satisfied with their jobs and they are not committed to the organization. The reason for their lack of satisfaction and commitment can most likely a result of an underperforming HR practice or system of practices. Therefore an organization should fix the systems if it wants to improve attitudes, behaviors and performance.