High-Performance Work Systems as an Embodiment of Win-Win Affairs in Corporate Entities - Case Study Example

HIGH PERFORMANCE WORK SYSTEMS AS AN EMBODIMENT OF WIN-WIN AFFAIRS IN CORPORATE ENTITIES Contents Introduction 3 Win-Win in Human Resource Management 4 High Performance Work Practices 6 Figure 1: Creation of an HPWS System in a Standard Organisation 9 HPWP & Human Resource Management 11 Work Intensification 11 Job Enrichment 12 Reward Management 13 Training & Development 14 Conclusion 15 Bibliography 17 Introduction “Human resource management is concerned with all aspects of how people are employed and managed in organisations.” (Armstrong & Taylor, 2014, p. 4). This implies that human resource management is a function in an organisation that is fundamentally concerned with the division of job functions and identifying the best candidates and objectively choosing one that will meet the functions. Whilst employed, human resource management has the obligation to ensure that workers are managed and kept within the right framework for the attainment of optimal results in operations. Human resource management is critical and contributes to the main strategic objectives of a firm and it aligns personnel and worker issues with the main strategic ends of the firm (Aquinas, 2009). Human resource management, then known as personnel management evolved from the being an independent and unique unit that operated alone, into one that focused on integrating strategic considerations into worker issues and ensuring that performance levels meet expected ends (Singh, 2012). This paper examines the core and fundamental relationship between human resource management practices and work performance. To this end, the paper will critically evaluate the concept of High Performance Work Practices and how they contribute to the improvement of strategic and stakeholder needs of an organisation. In order to meet this core aim, the following objectives will be explored: 1. A critical review of the concept of “win-win” in human resource management; 2. An evaluation of the concept of High Performance Work Practices and how it relates to human resource management; 3. An examination of core concepts that contributes to the concept of High Performance Work Practices. Win-Win in Human Resource Management This paper commences with the definition of the scope of ideal standards and expectations in human resource management. In simple terms, a win-win situation involves the presentation of some kind of solution to a problem that satisfies the best interest of all stakeholders in the situation (OConell, 2012). The win-win concept involves the presentation of a system through which competing needs and competing stakeholders are given solutions or responses that meet their best expectations (Lussier & Hendon, 2012). In transposing the win-win concept to the human resource management sector, human resource management can be viewed in a way and sense that involves the presentation of the best interest of all the stakeholders to a business (Perkins & Shortland, 2011). Human resource management provides a win-win result in relation to the best-practices approach and efficiency approached methods and processes to the attainment of employee and organisational objectives (Ehnert, 2013). Therefore, the trend and move towards the identification of standards for the attainment of excellence and adhering to them. Stakeholders are entities and units that affect and are affected by the operations of an organisation (Deckop, 2011). Thus, examining the win-win concept in application to the human resource management function, the main end is to create a system that satisfies the needs of all relevant stakeholders (Briscoe, Schuler, & Tarique, 2013). This indicates that human resource management can be defined as the best processes that satisfy the best needs of all stakeholders who are connected to stakeholders. Therefore, from this brief literature review, there are three main components of the win-win concept and idea and this are: 1. The presentation of the best solutions to competing claims and issues 2. Satisfying the needs of all stakeholders 3. Establishing the principles of best practices and institutionalising them in an organisation. This shows that the concept of win-win in human resource management is about providing the best and most appropriate solutions that can be used to attain the best results, especially in cases relating to competing needs and expectations. This definition of best results is the presentation of solutions that satisfy the needs of all stakeholders who have competing needs relating to human resource management. For instance, workers might want higher salaries, however, the management of the firm might not have sufficient resources to pay for those high salaries. In that case, a win-win solution from the human resource management will be to provide the best solutions that will involve the resolution of these needs and the formulation of immediate and long-term solutions to the payment of higher salaries to consumers. In cases where good solutions are found in relation to the different competing stakeholders, there is the need to establish it as the principles of best practices in the human resource management unit and adherence to them. This can form model solutions to problems and ideal solutions to the different problems that come up. In the historical context, the key stakeholders are employees, employers and trade unions (Amos, Ristow, & Pearse, 2009). This implies that these stakeholders have competing claims that are based on their traditional expectations. Employees need job security and higher remuneration. Employers want to pay less for labour and attain high results. Trade unions want to ensure that employers treat employees fairly and the interest of workers are attained through proper negotiations and good terms. Thus, with these three competing needs and expectations for these classes of stakeholders, there is the need for the human resource management unit of an entity to provide a win-win situation by meeting all these competing claims and expectations. This will be done through the presentation of the right solutions to problems that come up, institutionalising these best practice principles and ensuring that they are used on a regular basis and issues are handled appropriately. Therefore, a win-win situation in the human resource context will be one that provides the best solutions to issues and matters in order to deal with the best results. With this background on what win-win situations is, we can proceed to look at the next variable, High Performance Work Practices in the human resource management. There is the need to critique them and see if they really meet the needs of stakeholders and if their institutionalisation in businesses helps firms to thrive in order to attain expected results and ends that will help firms to grow. High Performance Work Practices High performance work practices is a system and means through which a firm uses innovative and improved methods and systems to ensure that they attain high levels of results (Blyton, Heery, Bacon, & Fiorito, 2012). A more specific definition indicates that high performance work practices are “a conception of organisational performance that does not consist of nor largely rely upon the minimisation or reduction of the cost associated with employees” (Blyton, Heery, Bacon, & Fiorito, 2012, p. 149). This implies that HPWP is such that it involves different methods of improving organisational performance without recourse to financial inducements and similar systems. Therefore, it is fundamentally involved with the use of various forms of organisation and modifications that enables a firm to increase productivity without increasing remuneration. This involves work related organisation and modifications to promote efficient and enhanced performance and results. “High work performance systems (HPWS) are bundles of HR practices that facilitate employee involvement, skill enhancement and motivation.” (Armstrong, Armstrongs Handbook of Human Resource Management Practice, 2012, p. 54). High work performance systems involve the various practices that are instituted in an organisation to promote the best and optimal results for a firm in their attainment of targets, particularly through their workers. Another definition of high performance work system states that “it is an internally consistent and coherent human resource management system that is focused on solving operational problems and implementing the firm’s competitive strategy” (Becker & Huselid, 1998, p. 55). This indicates that HPWS is a set of generally accepted and consistent HRM systems that are used to deal with operational issues in order to attain performance targets and standards of the firm. These are responsive systems and processes that are put in place to help a firm to attain its relevant results and also deal with significant issues that come up from time to time in order to meet firm strategic plans and objectives. This involves streamlining systems and processes in order to ensure that labour meets its ends in the organisation. Therefore, it can be said that such systems are sensitive to the needs and expectations of different competing groups and sub-groups in the organisation. This creates an imitable system and medium through which a firm’s strategic plans and objectives can be implemented (Becker & Huselid, 1998). The fundamental features of HPWS presented by Armstrong involve the following pointers: 1. Job Infrastructure 2. Training Programmes 3. Information sharing and worker involvement 4. Reward and promotion options that promote opportunities (Armstrong, Armstrongs Handbook of Human Resource Management Practice, 2012) This is about the various arrangements that are put in place by an organisation’s human resource management system that are meant to manage employees and employment systems in order to attain desired ends and desired results throughout the organisation. This is about the presentation of various structures and systems or processes that crystallises into a fundamental part of the firm’s culture and systems of operations. These are processes and products that form a central aspect of the firm’s outputs and this leads to the structure within which the human resource management system is ran and controlled. Another view presented by the US Labor Department indicates that high performance work practices are processes and systems that are designed in relation to customer needs and customer expectations and this is implemented in a way and manner that they help the firm to satisfy their consumers best and also attain competitive advantage (Price, 2011). Therefore, in this view, the changing and creation of an ideal HPWS system must be one that is market driven. This means that the essential factor and situation that causes work practices to change and meet the “high performance” standard is one that responds to the need of consumers and the markets in order to promote higher and better results like maximising revenue and other targets in operations. Therefore, it can be said that HPWS is a responsive formulation and presentation of human rights processes and systems in an organisation in order to provide an optimal and ideal system that is instituted in the organisation. This implies that HPWS is a process that evolves and is solidified in an organisation as a result of years of application of ideal processes and methods by the HRM unit in order to ensure consistent high performance throughout the organisation. Landy and Conte, focus on examining and reviewing the different systems and processes through which HPWS is are identified and instituted in an organisation in the 21st Century. This is encapsulated in three main factors: 1. Identification of HR practices that result in high performance; 2. Improving HR practice with better practices that result from various observances; 3. Instituting the practice and employing a strong leadership structure to keep it thriving (Landy & Conte, 2010, p. 280) Figure 1: Creation of an HPWS System in a Standard Organisation The figure above identifies the ways and means through which high performance work systems are formulated. As identified above, the main traditional and fundamental stakeholders are employers, employees and trade unions entities. In the 21st Century though, the role of trade unions have been systematically eliminated from the work place. Therefore, the employer and employee negotiate directly and they seek to create an appropriate system and process through which they can work to attain the best and most optimal results. The current situation has created a system through which the Human Resource Management unit of entities have a fundamental obligation of providing the best results for the firm through the creation of an appropriate and strong system through which the firm can attain the best results and the highest and optimal strategic ends. The Human Resource Management unit has to play an intermediating role in the organisation by presenting the best and most optimal systems and processes for the organisation to work and attain the best and most appropriate results. Therefore they will naturally have to work within the strategic framework of the top level management and directors of the organisation (employers). Through this, they will streamline the processes and systems of employees so that the employees attain the best and most significant results in their operations and activities. This ensures that the employees put in their best and attain the best results possible. Once employees give off their best, the HRM unit has the obligation to ensure that there is appropriate motivation and proper promotion that is tied to the success of the firm. Therefore the traditional approach of transactional management in which the employee is kept as a means to an end is being abolished in favour of a transformational management system (Epstein & Lee, 2010). This is because the traditional process within which workers were seen as a separate cost of management meant that workers were paid purely for work they did. However, in the 21st Century, most managers view that the success of their firm is based on tying the employee’s destiny with the firm’s destiny (Boxall, Purcell, & Wright, 2010). Therefore, as the firm grows, the worker’s position is enhanced and there is an increase in salary and promotions that are mediated by the Human Resource Management unit of the firm. The new system which views the human being or worker as an end and a crucial part of the organisation implies that there is an inclusion of the worker in the planning for the future. And this is done with the support of the human resource management unit of the organisation. This naturally eliminates the needs for trade unions which were fundamentally in operations as a means of ensuring that workers got fair transactions because in those days, management only saw workers as a cost component and once they were paid off, there was nothing they had to bother about. However, in this period where social and other elements of performance are considered, there is the need for a unit to size up the needs of both employers and employees in order to provide a continuous monitoring and control of affairs and the presentation of the best processes to ensure sustained and continuous improvement of performance. Therefore, the corporate world has evolved from a pluralist system to a more unitarist system to ensure that the needs of employees are tied to the growth and development of the firm’s strategic plans and the attainment of results (Muller, 2009). Therefore, high performance work practices develop as a system and a process through which the best interest of workers are integrated in a one-size-fits-all system in which there is no separation of employee interests from employer interests. This is done through the attainment of worker and management objectives as a unified system through which the attainment of market-driven objectives are identified as essential and the ultimate end in the firm’s activities. HPWP & Human Resource Management Therefore, the new human resource management system has grown to fill the gaps of the interest-based and negotiation-based win-lose system of running organisations and getting workers to interact with employers. HRM has therefore grown as a system through which the different needs of all the stakeholders are identified and integrated into one unitarist system in which the needs of all parties are integrated. This has led to the creation of various practices and processes that most human resource management units will need to adhere to in order to attain the best results of all parties and units of their affairs and activities. Work Intensification Work intensification is a natural consequence of the creation of lean organisations and entities that did not have elements and aspects of waste that existed in the pre-1979 British and pre-Friedman American workplaces where the focus was on total employment rather than the attainment of results. This is a general consequence of the move towards the use of more efficient and better processes and systems of operating businesses and it includes the use of total quality management and lean companies in which there were fewer workers and there is the trend towards the elimination of waste (Sisson & Storey, 2011). The tendency towards eliminating waste and integrating quality-conscious systems also had an impact on the policies and processes of human resource management units and components of businesses. This is because the HRM unit had to adapt and create HWPS in order to respond to the changes around it that all departments were adhering to. Therefore, the concept of work intensification came up and tasks in organisations had to be modified as a win-win situation to ensure the survival of firms in a competitive work environment. In return, HWPS had to be established through the presentation of some kind of assurances to workers affected by work intensification with higher work loads like increasing salaries in a win-win manner and also eliminate conflicts and related issues. HPWP was in such a way that it responded to the changes and modifications that came with the post-industrial era where computers were used as a means to cut down costs. This involved the presentation and usage of various techniques and processes that were mainly related to restructuring the work environment in response to the changes around the organisation. Job Enrichment Job enrichment found its way into HPWP because it was in response to the massive layoffs that occurred in the 1990s. Job enrichment is about the vertical of job functions as a means of survival and response to changes in the organisational structure and this involved combining tasks, creating natural work units, building relationships with clients and expanding units vertically (Hackman & Suttle, 2012). This means that the changes in the external environment force firms to also modify and change their ways. Therefore, human resource management units have the obligation to ensure that the workers are prepared and put in a position where they can give off their best and improve their contribution to a firm in relation to the changes that are made within an organisation from the top management. Thus, the HRM sets up a set of high work performance systems as a response to the changes in the environment induced from the top. Their obligation is to ensure that first of all, the interests of workers and employers are both met. This involves the presentation of new and better methods and systems where the HR unit independently evaluates and reviews the changes that are brought forward and pursues the interests of both units. Whilst the interest of workers is to get good salaries and job progression through job enrichment, the employers want to attain more results for less labour costs. Thus, the HR unit has a mediatory role for the presentation of the win-win results for both employers and employees. This culminates in an inevitable system and process through which HPWS become the norm rather than the exception. And the essence is to ensure that there is a win-win situation in the firm and the needs and expectations of both workers and employers are met and attained appropriately. Reward Management Reward management is primarily about linking the variation of staff members’ salaries in relation to the strategic and organisational objectives (Boxall, Purcell, & Wright, 2010; Armstrong & Taylor, Armstrongs Handbook of Human Resource Management Practice, 2014). Therefore, reward management is therefore a system and process through which a firm is able to align its strategy with the motivation of workers. Unlike the win-lose system of the 1950s and 60s, reward management is a process through which the human resource management unit of a firm presents fair or seemingly fair processes and systems that are transparently presented to workers that shows how they can progress and how their remuneration will improve and change over time (Armstrong, Armstrongs Handbook of Human Resource Management Practice, 2012). Therefore, the human resource management plays an internal, but independent role in helping the workers and staff members to attain their end of getting their earning increase and grow in proportion to their commitment and contribution to the growth of the firm and the attainment of organisational strategy. Organisational strategy grows and can be directed and redirected based on the changes in remuneration. This is because the top management have some kind of control and authority over how salaries must change and be varied. However, the HR tends to present the best practices and processes that are necessary for the attainment of results. Therefore, the new systems that are presented, which are normally high performance work systems tend to be done in such a way that the best interests of both parties, employer and employee are considered in fixing pay and salary. Training & Development As identified above, the new system of transformational management involves treating workers as an asset and a means to an end, which is the attainment of absolute strategic objectives. Therefore, there is the need for the connection of staff and employee processes with the firm’s activities and strategic plans. This implies that a firm will have to find ways and means to get employees satisfied in order to meet their needs and objectives. Training and development is a system and process through which there is a win-win situation and win-win context through. Most employees have a vision of developing their skills and talents whilst they work within an organisation. On the other hand, firms also want to have highly qualified and competent persons who can work to meet all of the firm’s strategic ends and objectives. Hence, there is a general tendency for a firm and its workers to have a genuine need for training and development. Thus, high performance work systems involve a system where the workers are given training and development in-house. This helps the workers to realize their own ends and as they do so, they unconsciously contribute to the growth and development of the firm. This creates a symbiotic relationship in which the worker and the organisation benefit in the long-run. This is because working and developing one’s talents in an organisation builds loyalty and this in turn creates a system and a process that enhances the results and the long-term results of the firm. Conclusion The win-win paradox is built on the foundation of attaining the needs and expectations of all stakeholders in an organisation. Therefore, it is about the ability of an organisation to meet their own needs of attaining profitability over a sustained period whilst satisfying the needs and expectations of all relevant stakeholders. In the analysis, it was identified that the old system of Keynesian economic affairs involved the presentation of total employment in the Post-World War II economies. Hence, this led to the creation of a system and process through which industrial actions were common and the use of trade unions was a norm, rather than an exception. Therefore, the trend of creating and maintain a win-lose system of negotiations and demands for better services created tensions between employers and employees. However, in the advent of Friedmanism in the United States and Thatcherism in the United Kingdom and British Commonwealth, most organisations had to tilt towards supply side economics rather than a welfare-based system. This culminated in the focus on performance. High Performance Work Practices and Systems are a direct result of these changes and they are fundamentally ran by human resource management units which replace the old system of personnel management and trade unionism. This system was based on a transactional philosophy about labour where workers were seen as a cost and a means to an end to employers. Hence, the integration of HPWP and HPWS created a system in which the human resource management unit could play an independent role in organisations that sought to maintain a win-win situation in organisations. The win-win process is about using the HPWS as a system through which human resource management units could be skewed and modified in a way and manner that will enable employers’ needs and employees’ needs to be independently examined, evaluated and carried out as required. Some of the elements of HPWS that supports the win-win argument include work intensification, job enrichment, reward management and training and development. Bibliography Amos, T., Ristow, A., & Pearse, N. J. (2009). Human Resource Management. Cape Town : Juta Press. Aquinas, P. G. (2009). Human Resource Management. London: Vikas Publishing. Armstrong, M. (2012). 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