High-Performance Works Systems - Essay Example

High-Performance Works Systems INTRODUCTION As globalization ushers in a more aggressive and boundary less market, companies, organizations find themselves continuously challenge to create their niche in the global market. And it is no easy task. In order to properly respond to the demands of the time, organizations have redefined their relationships not only with their shareholders but also with their stakeholders. And one of the most important and significant change that has happened is the recognition of the integral role that employees play in the whole life of the organization. In light of this, the paper intends to look at the discussion regarding high performance work systems vis-à-vis that of human resource strategy to be able to gain better understanding of SHRM and HPWS in context. HIGH PERFORMANCE WORKS SYSTEMS: DEFINED Applying principles learned from lean production, contemporary organizations have created paradigms with which employee involvement and participation has been considered as an integral factor in the achievement of the organizations goals and objectives. Being such, there is a continuous effort to come up with structures that will support global competitiveness and sustainability of competitive advantage among organizations in the business environment. In lieu with this, one phenomenal approach comes up – high performance works systems. The term high performance works systems (HPWS) is “often used to loosely describe a set of work innovations that include autonomous work teams, socio-technical systems, open systems planning, new plant designs and other similar innovations” (Farias & Varma, 1998: 50) It is synonymous with the terms “high-involvement or high commitment management.” (Tsai 2006: 1513) For, HPWS is technically a “configuration of structures, practices and processes” (Gephart & Van Buren, 1996: ¶ 6) as organizations sustain their competitiveness in the global market. Another way of looking at HPWS is that it is the “alignment” (Gephart & Van Buren 1996) of all the units of the organization towards the achievement of the goals and objectives of the organization. And this is made feasible if the individuals in the organization see the objectives, goals and vision of the organization as congruent and similar with theirs. This is attained when employees are given the chance to improve their skills, knowledge of their own field as well as other related fields, and when employees are motivated. While the managers become “coaches, facilitators and integrators and they share responsibility for decision making and results with employees.” (Gephart & Van Buren, 1996: ¶ 11) As such, under HPWS communication, teamwork and employee empowerment are utilised for it positively improves employee attitude and behaviour in such a way that employee satisfaction and commitment are attained. And this in turn “feeds through the performance of the work unit and eventually the company.” (Edwards & Wright, 2007: 570) Thus, HPWS is founded on “employee commitment, involvement and empowerment” (Tomer, 2001:64) and not on employee control. It incorporates practises that emphasises “flexibility and empowerment” (Den Hartog & Verburg, 2004: 56) In light of this it is high performance works systems is considered as one of the most promising paradigms with which strategic human resource management can be realized. But what is strategic human management? STRATEGIC HUMAN RESOURCE MANAGEMENT: Human resource management is the sector of the organization that deals directly with the human capital of the organization. Being such, it is not surprising to learn that strategic human resource management is basically an “evolution of human resource management” (McMahan, Bell, & Virick, 1996: 195) as contemporary organizations respond to the impetus of the global business environment and sustaining competitiveness in the global market. Although there is “lack of consensus regarding the nature of HRM” (Paauwe & Boselie, 2005: 69) but there is an agreement pertaining to the four practises utilised by HRM as it gears towards ‘strategic HRM’ and these are “to identify strong performers, provide them with abilities and confidence to work effectively, monitor their progress towards the required performances targets and reward staff well for meeting or exceeding them.” (Paauwe & Boselie, 1996: 69) An effective strategic human resource management “coordinates all individual HRM measures and implements them so as to directly influence employee attitude and behaviour in a way that business to achieve its competitive strategy.” (Tomer, 2001: 67) And since that it is based on employee empowerment and participation, it is conceived as the holistic approach in the management of human capital. Although it is recognised that there are difficulties in measuring the actual effectiveness of the holistic approach of strategic human resource management, still, the assumptions which, act as parameters that they have placed to help us understand the empirical application of SHRM guide us . These assumptions are: 1. Organizations are open systems with effectiveness defined as being successful in achieving a fit between its various components between the system and the environment. 2. People are capable of growth in terms of skills, values and commitment if and when the work environment encourages this. People are social capital rather than variable costs. 3. There is a long-run coincidence of interests between all of the stakeholders. 4. Power equalization is a key factor in encouraging openness and collaboration among stakeholders. 5. Employees will be motivated and the organization more effective if they work towards organizational goals that they accept as legitimate. 6. Open communication builds trust and commitment. Instead of adversarial relation between employer and employee, encouragement of mutual interests between employer and employee. 7. People will participate in defining problems and solutions will become committed to the new directions that result from the process of participation. This is in contrast with hierarchal control from the top. Source: adapted from Lundy SHRM THEORIES AND HPWS: A CLOSER LOOK One of the better ways for us to appreciate further the SHRM and HPWS is via looking into case wherein both concepts are elucidated. But before we go into the case study, let us look into ‘mass production human resource management theory’ and ‘lean production human resource management theory’. Lean production management provided us with the frameworks wherein the concepts of teamwork, employee empowerment, shared-decision among and between the employee and management, communication and a move away from hierarchal leadership were put in place. When it was adopted by Toyota, it was not surprising that it revolutionized our conception of organization, of management especially of human resource management. Since, lean production together with SHRM and HPWS created synergy with which organizations have sustained their global competitiveness. Mass production management, on the other hand, has presented hierarchal decision making, the employees “wouldn’t volunteer any information on operating condition- for example, that a tool was malfunctioning- much less suggest ways to improve the process. these functions fell respectively to the foreman and the industrial engineer who reported their findings and suggestions to higher levels of management for action”(Womack. Jones & Roos, 1990: 32) In this kind of set up, HRM is relegated, basically, into administrative works and the result of this particular system is inflexibility. THE CASE OF TOYOTA As stated earlier, HPWS is anchored on employee empowerment, commitment and involvement. What had happened to Toyota is a clear example of the connection of lean management, strategic human management and high performance works systems. When Toyota applied lean production as the means of production and lean management as its form of management, it can be claimed that it has paved the way for HPWS and SHRM for the simple reason that all three concepts are utilizing the same based or foundation – employee empowerment. Employee empowerment is the buttress that supports the chain that connects all the elements necessary in the achievement of the goals and objectives of the organization, of making both the stakeholder and the shareholder contented, committed and happy. CONCLUSION SHRM and HPWS manifest the new and distinct dimension of modern organizations. That is, it is not just solely profit oriented but that it too has taken that consciousness wherein as they maintain and sustain their niche in the global market, they too are responsible for the stakeholders (specifically the employees) as the employees themselves are the very life blood of the organization. In the end, “human resource strategy is not an activity; it is emergent from actions…which organizational members make over time.” ( Bamberger & Phillips, 1991: 157) Reference: Bamberger, P. & Phillips, B. (1991). Organizational environment and business strategy: parallel versus conflicting influences on human resource strategy in the pharmaceutical industry. Human Resource Management Journal, Vol. 30 Iss 2, pp 153 – 182. Edwards, P. & Wright, M.(2007). High involvement work systems and performance outcomes: the strength, contingent and context- bound relationships. 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