Improving Organisational Performance using HPW - Assignment Example

Improving Organizational Performance using High Performance Work (HPW) Practices Contents Contents 2 Introduction 3 Business Case 3 Challenges 8 Proposals 11 Conclusion 12 Introduction Numerous changes are taking place in operation of business activities. Economic changes have forced many firms, governmental bodies, learning institutions and non-profit associations to shift from the conventional work structures and laying of new strategies that will boost their performance, in order to adjust to the changing market situations. High Performance Work (HPW) and Performance Management practice are some of the systems the organizations are using. This paper mainly focuses on how the organizations are working to improve their performance by using the High performance work (HPW) practices. High performance work practices refer to the situation in which organizations ensure that employees are highly involved in all organizational matters. The aim of the study is to understand the impact of employee management and treatment to overall performance of an organization (Beer & Foote, 2009). In the paper two computer-manufacturing companies are used as examples, these companies are Cray and IBM. Business Case High Performance Work (HPW) is very vital to all organizations. Basing on research, the results have indicated that most companies achieve excellent performance through the implementation of the HPW practices. High performance work entails the human resources management procedures that enhance perfect employee performance (Raza Naqvi & Nadeem, 2011). Numerous studies have revealed that whenever the employees are excellent in their performance, there is always an automatic improvement in the performance of the entire organization because there will be augmented productivity. HPW is very important since it enables the employees to do excellent work, which results in improved productivity and organizational growth (Ashton & Sung, 2009). An organization can derive various benefits from HPW. First, HPW enhances teamwork. Teamwork is very vital in determining the performance of an organization, teamwork facilitates information sharing among the employees and the management team. This makes it easier for the management to identify and address issues arising in the organization (Snell & Bohlander, 2011). Through information sharing the employees will be loyal to the organization. This will increase productivity, which will boost the performance of the organization. Creation of a strong communication network is another benefit of high performance work systems. This is because in the instance of the market competition, the company will depend on the employees in forecasting on the probable problems, eradication of obstacles and manufacturing of new products while focusing on product quality (Yeatts & Hyten, 1998). HPW enable the employees to interact freely with the management, which enables the management to hold constant meetings with the employees whereby through the meeting the management will be able to form a strong communication network. This will lead to efficient decision-making and execution of the necessary progress. Organizations will be able to engage the employees in formal trainings that will assist in minimizing the mistakes and ensuring quality products. The employees will have a better understanding of the production process and information technology system used, thus facilitating effective problem solving within the organization and improvement in performance (Murray, 2002). After IBM executed the formal training of the employees in information technology, the firm realised a 19 % increase in performance. This improvement was because of the formal training, which led to notable improvement of work output in terms of quality and quantity. Research has revealed that an increase in the formal training has led to reduction of wastage of organizational resources. HPW is vital to an organization since it entails the execution of the compensation plan. The payment that employees receive poses a very significant effect to the performance of an organization. This is because it is connected to incentives that boost the loyalty of employees to the organization. When the organization is able to offer the necessary incentives to the employees, the employees will be able to work hard and ensure that the organization achieves the set objectives (Kirkman & Young, 1999). Better incentives have led to effectual communication, advancement in product quality, long-term jobs, and huge appreciation of changes in technology. Profit sharing is another form of reimbursement where the workers are compensated basing on performance. In improvement share, employees are compensated for every improvement they make to the firm. When Cray introduced the idea of profit sharing, there was a 23% increases in production which led to increase in productivity, thus improvement in organizational performance. HPW enhances workplace participation. Through participation, workers are able to contribute in organizational decision-making process and in sharing of responsibilities. Sharing of jobs and training aids in reduction of fatigue, creation of job satisfaction, and lessening of turnover problems. Job sharing ensures that competent individuals are selected to address certain issues affecting the organization that improves the employee’s commitment to the work and increase participation (Yeatts, & Hyten, 1998). This leads to improvement in the performance of an organization. Currently, many organizations are facing market competition in terms of product quality and the variation in market situations. This has posed a challenge to many firms. In order to overcome the challenge, these firms are now relying on inventiveness, initiative, and problem solving skills from the employees. Most firms have decided to implement the high performance work programs (Jones et al 1999). IBM for instance, is achieving this through ensuring that the employees access the necessary information, skills, incentives, duties, and are involved in decision-making process. Most organizations are currently insisting on recruitment of highly skilled employees. This aids in the improvement of efficiency of work, whereby the employees who understand their duties will help the management in sporting the problems in the organizations and offering the best solutions (Mittal, 2011). Qualified employees will always carry out their duties with competence, thus leading to quality work. This undertaking also aids in improvement of organizational performance. Recently, organizational changes have occurred where most organizations are currently adopting the HPW practices that have made significant impact in their performance. Currently, due to the challenge of change in the business process, the management teams are transforming their agencies into high performance work systems through proper mixture of persons, practices, technology and organizational composition. The organizations are using the High performance work systems to ensure that they maintain their competitiveness in the market despite of the changes (Fisher, 2000). The major advantage of HPW is that it is flexible and entails a variety of procedures that are applicable in all organizations. This is the reason why most organizations have found it easy to adopt the HPW systems (Buchanan & McCalman, 1989). The two companies, Cray and IBM have maintained their business performance through the implementation of the HPW. These organizations have adopted various business strategies. IBM has adopted a strategy of learning strategy as a test for the HPW. Basing on the results IBM is convinced that this strategy is feasible since the organization was able to adjust to all the changes that have occurred in the business sector. The CEO of the company asserted that the company is devoted to learning new systems, since it has an exceptional tradition and dedication to learning. Through their learning culture, the management team have decided to ensure that all the departments in the organization receive the necessary information, which will ensure that they successfully execute the HPW systems in order to meet the market needs through consumer satisfaction (Mittal, 2011). The implementation of learning has enabled IBM to emerge as a high performance working organization. Cray has laid a strategy of embracing teamwork by linking the teams to the organizational requirements. In an organization, teams are very important, since teamwork enhances organizational performance. Basing on HPW systems, teams must participate in all business operations since team members are regarded as business partners and not as employees (Noe et al, 2005). In order to ensure optimal team performance, Cray has set up proper team performance procedures that allow the team members to fully understand the organizational requirements and use them in dealing with the problems facing the company in order to ensure that they achieve the organizational requirements. The organization has ensured that the teams are bound to the organization by carrying out payments on team basis while considering the business measures (Marschall, AFL-CIO & Human Resources Development Institute, 1992). This has led to effective working of the teams since all the teams are working hard to ensure that they get a better pay. The implementation of this strategy has led to increased efficiency that has led to an increase in work output, thus making Cray a high performance working company. The two companies have laid up the strategy of offering incentives to employees. The aim of the strategy is to win the loyalty of the employees. When the employees are loyal to the organization, they will do excellent work that will lead to an increase in work output and improvement in the quality of the product; hence leading to high performance (Messersmith & Guthrie, 2010). Incentives make the employee to stick in the organization. This guarantees the permanence of their jobs that ensures job security. Due to the permanency of the job, the employees can share their ideas with the organization that facilitates information sharing, thus enhancing effective decision-making and better performance. IBM and Cray have strategized in rewarding the employees at individual and group level, basing on their performance, and on any form of initiated improvement to the organization (Appelbaum, Bailey & Berg, 2000). The execution of this strategy has enabled the two organizations to become high performance working organizations. Challenges Although HPW practices improve employee performance, it does not come without challenges. This can be attributed to the fact that human beings are always unwilling to adhere to changes. HPW has to be implemented with various changes that some employees will be unwilling to undergo. In order to ensure that IBM became a leading organization in the sector, it employed a learning culture that many employees were opposed to. This is because some of the employees viewed learning as a waste of time and difficult. This implies that the management had to ensure that all the employees learnt the importance of learning in order to ensure that the implementation of HPW was successful. In addition, at IBM employees were required to ensure that they worked in teams. Not all employees will be willing to co-operate with their fellow employees sometimes because of personal differences. Employees have to be encouraged to work in teams in order to achieve group’s goal (Aryee et al, 2012). The management of the company compared the internal environment with the external one and realized that the company’s focus was not on its survival but future growth. An organization’s future growth cannot be achieved if the organization is unwilling to make changes that will ensure that its products and services satisfy the needs of the customers. The business world has become very volatile and this means that organizations need to adapt to the changes that come with customers expectations. In addition, government regulations, which are changing on every day basis, must be obeyed. This means that the company had to make the business dynamic, connected, and collaborative. Any organization that is willing to be a leader in its sector has to be dynamic. Being dynamic means that an organization is not rigid and thus it adapts to all the changes that are happening across the world. Today’s business environment has become very dynamic and as a result, the management of IBM had to come up with strategies of identifying individuals in the organization who possessed the skills for addressing any emerging changes. Employees felt motivated because of the fact that there were opportunities for growing in their careers while working for IBM. In addition, skills had to be developed among the existing employees in order to ensure that all the changes were adequately addressed (Aryee et al, 2012). On the other hand, information is the key to the success of any business in the world. This implies that an organization has to be connected to the outside world because this is the main source of information and data that can make the organization to move to the next level. It has to be understood that finding real partners in the business world is hard because a company cannot make collaborations with other companies that do not share the same ideologies. Partners are the ideal sources of information that any business can use to improve its services. IBM’s management understood this challenge and came up with a strategy of finding the best partners who were going to move the organization forward (Appelbaum, Bailey & Berg, 2000). Rewarding employees is another challenge that the management of IBM had to deal with. This can be attributed to the fact that the formula of rewards had to be developed and all employees had to be happy with it. On the other hand, the organization realized that reward came up with increased spending for the company, which means that extra funds had to be raised. This is despite the fact that some of the shareholders in the organization who possess veto powers were opposed to the idea of increased spending in the organization. This implies that the organization’s management had to explain and convince the shareholders the importance of working smarter. An organization cannot be successful in today’s business world while it does not come up with strategies of analyzing all the data it receives in real time (Jones, Beyerlein, & American Society for Training and Development, 1999). The performance of any given organization depends on the performance of each individual employee. This implies that an organization has to realize the importance of ensuring that the employees are well compensated for any contributions they make to the company. At Cray Inc., employees’ performance is improved by rewarding any employee who comes up with a new idea that will move the organization ahead. The organization rewards employees individually or as groups and this has resulted in increased teamwork and performance. These rewards are monetary, which means that the organization has to come up with resources for accomplishing the task. This implies that the management has to convince the shareholders the importance of rewarding the employees because some do not see the point of rewarding someone who is doing the job she or he is paid for. Some employees are not happy with the reward system because they feel that it is biased. This leads to situation whereby some of the employees are unwilling to perform to their potential because of lack of motivation. Some employees are always opposed to changes because they find comfort zones when working at their usual settings. Despite the above-mentioned challenges, Cray Inc. has been able to be a leader in the business of developing super computers. This has seen the organization earn contacts for supplying the American department of defense with super computers that it uses for research (Jones, Beyerlein, & American Society for Training and Development, 1999). When implementing HPW, the management of an organization is faced with the daunting task of detecting skilled employees who have the abilities of developing new technologies for the organization. This can be attributed to the fact that some employees feel that the management is not treating all the employees fairly. This leads to conflicts in the organization and may result in employee redundancy. Employee redundancy is an expensive affair for any organization because some employees will be paid for work they have not done. At both IBM and Cray Inc., employees felt that some of their colleagues were favored by the management and this had a negative impact on the organizations’ performance. It is worth noting that unfairness among the employees was not real, because all the employees were encouraged to ensure that they were dynamic and thus could change with the changing times. Appraisal is another challenge the management was faced with because of the complexities associated with determining individual performance especially when employees were required to engage in teamwork (Aryee et al, 2012). Proposals Proposal Challenge Solution Develop a budget for all costs involved Some shareholders may be unwilling to contribute to the kitty Convince them on the monetary gains the organization will achieve upon implementing HPW Reward high performers fairly Some employees will complain about biasness Have a well laid down procedure for rewarding the employees Make all employee understand the importance of HPW implementation Some employees will be resistant to change Educate all the employees and assure them of their job security if they perform Encourage teamwork Cultural barriers will lead to reduced cooperation Cultural barriers ought to be eliminated through educating the employees (Godwyn & Gittell, 2011, Combs et al, 2006) Table 1: Table of applicable proposals to HPW Conclusion Changes in the world of business and increased competition imply that organizations have to develop skills that they will use to achieve their goals and objectives. High performance work (HPW) increases the performance of any given organization because of the fact that employees feel more appreciated by the management. The performance of any given organization is dependent on the performance of each of the organization’s employees. Competition in the technology sector, led Cray and IBM to realize the importance of HPW because the managements of the two organizations realized that their main agenda was not to survive but future growth. In order to increase performance of employees, they have to feel that the organization appreciates their efforts. This is achieved by ensuring that employees are involved in important decision-making processes. In addition, the management of any organization must treat all employees fairly and eliminate discrimination. Discrimination leads to demoralization of employees, which in turn affects their performance. On the other hand, employees ought to be encouraged to work in teams and in turn reward them as groups or as individuals. Money is not the only form of reward that an employee can get but other methods can be used such as promotion among others. Employees should be guaranteed of their job security because this leads to high performance due to elimination of uncertainties. When employees are not sure of what might happen, their performance is affected, which in turn affects the entire organization’s performance. It has to be noted that companies that have implemented HPW have reported increased performance among the employees. More importantly, the management of any organization has to ensure that it upholds the rights of all employees and adheres to all rules and regulations. This creates trust between employees and their managers and in the end increases performance. References Appelbaum, E., Bailey, T., & Berg, P. B. (2000). 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