The High Performance Work Practice - Literature review Example

The High Performance Work Practice Name Institution Course Date The High Performance Work Practice The High Performance Work Practice systems are used by organisations to engage their employees (Appelbaum et al., 2000). Organisations consolidate workflow around fundamental practices and develop teams that can carry out these practices such as training, remuneration, and performance management anticipated to improve employee skills, motivation as well as flexibility. Also, high performance work practice is an approach used in managing companies that strive to encourage effective employee engagement and commitment so as to attain high performance (Appelbaum et al., 2000). Correspondingly, the institution of High Performance Work Practice such as Human Resources programs has the ability to offer information, develop analytic solutions and make interventions in the work environment. The concept of High Performance Work Practice contributes in establishing the issues concerning organisational performance and enhances the high commitment of the employees which tends to benefit the organisation (Takeuchi, Chen and Lepak, 2009). The contemporary literature covering the concept of High Performance Work Practice pays considerable attention to how HPWP programs can benefit both the individual employees as well as the employers. In the recent years, there has emerged a debate concerning the ability of the High Performance Work Practice to bring a win-win situation. According to Appelbaum et al., (2000) High Performance Work Practice can achieve a win-win situation for both the employees and the employers if it yields two outcomes; employees of an organisation are committed, motivated and energized and organisational parts are effectively aligned (Boselie, Dietz and Boon, 2005). This essay will designate and critically examine the validity of the statement; “High Performance Work Practices represent win-win solutions; benefiting both the employers and the employees.” Research studies on Human Resource Management have shown that there are two main benefits related to the implementation of High Performance Work Practice (Appelbaum et al., 2000). Both the benefits tend to reinforce each other. To start with, High Performance Work Practices have the capabilities to develop sustained performance improvement of an organisation. Second, High Performance Work Practices have the potential to improve the workplace in relation to employee satisfaction and personal achievement. The two benefits of HPWPs work together to bring about higher financial performance, innovation and sustained competitive advantage to an organisation (Hueryren and Dachuan, 2012). However, HPWPs do not always bring about a win-win situation in an organisation. The success of High Performance Work Practices is dependent on the sector in which it is implemented, policies involved and the size of the organisation. Different labels are made concerning High Performance Work Practice and they include high-Commitment Employment Practices, High-Involvement Work Practices and Alternative Work Practice among others (Kauhanen, 2009). Some research studies support the notion that High Performance Work Practice improve the performance of the organisation as well as benefit the employees. For example, according to the research done by the European Foundation for Improvement Working Conditions, there is a positive connection between workplace practices and sustainable workplace performance. The research explained the connection existing between high performance work practice and workplace performance founded upon ability, motivation and opportunity model (Macky and Boxall, 2007). It was concluded that high performance work practices have the ability to achieve organisational performance as well as increase employees’ motivation and engagement. High performance work practices may involve implementation of family friendly management practices (Wood, Menezes and Lasaosa, 2003). Employers can commit to assisting the employees establish a balance between work and family life. There are five frameworks of family-friendly management. The first one is the institutional theory. The theory highlights that the initiation of family-friendly initiatives is the conformation to the pressures from the society (Wood, Menezes and Lasaosa, 2003). However, the main focus in implementing these practices should be to manage work-family conflicts. The pressure to adapt family-friendly practices varies from one industry to another. There is therefore a connection between family-friendly practices and the alignment of the organization towards societal pressures. The more the management values the employee’s work-life balance, the greater the chances to the success of HPWPs (Wood, Menezes and Lasaosa, 2003). In addition, when the management is focussed on satisfying the employees’ needs, it will endeavour to implement family-friendly management programs. The second theory is the situational perspective which assumes that management conforms to local situations rather than to pressures from the society (Wood, Menezes and Lasaosa, 2003). For instance, organisations that assume that labour issues like absenteeism and stress are family related often respond by implementing family-friendly polices. A constricted labour market may force the organisations adapt family-friendly policies in order to attract the best potential candidates. In the situational perspective, employers adopt family-friendly policies in a fragmentary way (Wood, Menezes and Lasaosa, 2003). It has been seen that family-friendly programs have positive outcomes when it comes to employee commitment and organisational performance. Moreover, the United Kingdom Commission for Employment established a survey. According to the survey, the framework of skills utilizations entails several high performance work practices that focus on developing a workplace environment where employee’s talents can be used for the optimum benefit of both the employees and the employers (Kroom, Van de Voorde and Van Veldhoven, 2009). High performance work practices is concerned with the identification of employees’ skills and talents, delegating work in a way that these talents are used to the best of their capabilities and offering opportunities for these employees to add value to the organisation beyond their jobs descriptions (Purcell et al., 2003). High Performance Work Practice systems also assume a connection flowing from human resource practices to the organisational performance through the response of the workforce. High Performance Work Practice Systems tend to work by shifting employees’ behaviour in order to add value to the organisation (Purcell et al., 2003). Nevertheless, while employees are the core factor in mediating the effects of High Performance Work Practice on organisational performance, their reaction to this practice have been neglected in researches. The basic theory of performance concerning HPWP is the AMO theory developed by Boxall and Purcell (Macky and Boxall, 2007). According to the theory, high performance work practices contribute to the organisational performance as well as employee’s performance by three interrelated models. First, by developing talents of the employees, second by increasing employee’s motivation through engagement and involvement and by offering an opportunity for the employees to utilize fully their talents and knowledge to their job descriptions. In this model, the employee capability is the one that sets the bottom line for performance while motivation tends to influence the extent to which this capability develop into action (Macky and Boxall, 2007). In addition, opportunity is the enhancement of the possibilities for the capability to be expressed and barriers that prevent motivated employees from using their capability to be removed. The task of the Human Resource Management practices is therefore to assist organisations attract as well as develop employees’ capabilities (Macky and Boxall, 2007). This entails Human Resource Management practices that endeavour to modify performance behaviour including high-involvement practices that motivate employees by offering opportunities for involvement. Examples of high-involvement practices otherwise referred to as high performance work practices may include the use of problem-solving groups and team-based structures that offer employees some level of autonomy in establishing their work methods and avenues that enable better communication between the employees and the management (Macky and Boxall, 2007). Such practices act as drivers for recognizing and minimizing barriers to employee and organisational performance. According Appelbaum et al., (2000), high performance work practices create a win-win situation by benefiting the employees as well as the organisation. These practices assist employee retention by encouraging employee engagement and commitment to the organisation. This in return retains human capital for the employer and also improves productivity by minimizing torment employee turnover (Ashton and Sung, 2002). In addition, other high performance work practices may entail the use of internal recruitment, offering on-going job security and offering career progression and training and development opportunities. From this discussion, it is clear that high performance work practices are able to modify employee behaviour that may lead to improved performance. High performance work practices lead to job satisfaction and employee commitment according to Ashton and Sung (2002). Job satisfaction coupled with employee commitment is highly correlated to organisational performance. Committed employees connect psychologically with the employers and are more likely to enhance their efforts towards achieving organisational goals (Pentareddy and Suganthi, 2015). It is right to say that high performance work practices improve organisational performance by improving job satisfaction and commitment of the employees. Some literatures suggest that satisfied employees may have the capacity to provide satisfied customers. And these satisfied customers tend to be loyal to an organisation, spend more in sale, bring new customers to the organisation and generate repeat sales for the organisation (Pentareddy and Suganthi, 2015). High Performance Work Practice not only increases employee commitment but also increases their trust in management. Trust in management is associated with organisational performance (Mayer and Gavin, 2005). Trust-performance relationship is associated with how employees become vulnerable to management and the way in which the unwillingness of the employees to be vulnerable affects performance. An employee with the willingness to be vulnerable to management tend to take up the influence management has and effectively focus on contributing to the achievement of organisational success (Mayer and Gavin, 2005). The vulnerability of the employees generally has an impact on the contribution of the employees in the organisation. Cognitive resource theory highlights that worry has a detrimental effect on performance that generates from lack of trust. When an employee spends a lot of mental energy and time worrying about the management decisions and activities, it reduces cognitive resources for productive efforts (Mayer and Gavin, 2005). Overall, employees who do not trust their management are less likely to contribute to organisational success. Empirical research on High Performance Work Practice depends heavily on two information sources; the employees and the management (Yanadori and Jaarsveld, 2014). Research that uses information from management often expect the management to report whether a particular practice is in their organisation and studies from employees ask them to report the extent to which some practices in organisations align with organisational performance. The two methodologies highlight the extensiveness of high performance work practice from differing perspectives (Yanadori and Jaarsveld, 2014). Some research studies have recognized the deviation between formal high performance work practices and employee participation in them. For instance, the presence of high performance work practices may not lead to employee participation. The deviation may occur also when employees participate in these practices on an informal level. Employees may take part in organisational activities even when the company does not embrace them as formal practices. By observing the impacts of high performance work practices on job satisfaction, Yanadori and Jaarsveld, (2014) established that employees participate in HWPWs that are not formally existing in the business. Employees’ reaction to Human Resource Management practices may differ in terms of how they infer their HR policies. An indefinite connection existing between formal polices and business practices tend to deteriorate the positive outcomes of the informal HPWP on the employer and employee’s success (Yanadori and Jaarsveld, 2014). Regardless of the formality, high performance work practices initiate mechanisms that enhance success in the employee- and employer-level although ambiguity of Human Resource polices regarding informal HPWPs may hinder this positive effects. With this regard, High Performance Work Practices may bring about lose-lose situation (Kay, et al., 2008). It is important to also mention about the impacts of unused high performance practices. Unused HPWPs sometimes involves multiple conflicting effects on employee and organisational performance. Unused high performance work practises are linked to job dissatisfaction. Employees encounter reduced job satisfaction and low performance if there are practices formally in the company but are inaccessible to them (Yanadori and Jaarsveld, 2014). Conversely, some research argues that unused HPWPs sometimes lead to workplace profitability. In order to develop effective employee commitment, jobs should be challenging that gives the employees an opportunity to use different skills (Pentareddy and Suganthi, 2015). These means that jobs should have the potential to change the organisation as well as the customers. High performance work practices that involves feedback mechanism assist the employees enhance their work which eventually lead to effective commitment and organisational performance. Leaders have the capabilities to build job commitment by fostering the feeling of empowerment (Dyhrberg-Noerregaard and Kjaer, 2014). Leaders should therefore have higher behavioural complexity in order for them to be successful in stimulating effective employee commitment through job characteristics. In order to deal with the available competing demands in the workplace, leaders should develop superior skills in every dimension of leadership (Gordon, 2010). This may include vision setting, result focussed, being analytical and motivating. High performance work practices may therefore involve effective leadership style. Transformational leaders are intellectually stimulating and influential in leading their followers. Transformational leadership is an appropriate theory that asserts behavioural engagement (Carasco-Saul, Woocheol and Taesung, 2015). Transformational leadership impacts the outcomes on both the employee-level and employer-level creating a win-win situation. Ideally, employees are often engaged and committed when transformational leader boost their optimism, innovative behaviour as well as meaningfulness (Carasco-Saul, Woocheol and Taesung, 2015). Employee engagement and performance reduces when the leader’s perception of the employees is not as favourable as the employee’s self-evaluation. Besides transformational leadership, additional leadership styles have the potential to enhance employee engagement and motivation. Leadership is effecting in facilitating employee engagement by illustrating roles and fostering organisational culture (Pentareddy and Suganthi, 2015). In addition, cultivation of conducive workplace environment is very important in enhancing employees’ engagement as well as organisational performance. In general, the way leaders and manager’s view and are viewed by the employees, the nature of the work environment they cultivate and their influence on employee’ perceptions can influence facilitation of employee engagement and performance. High performance work practices are emerging organisational models. Certain high performance work practices bring benefits while other needs to be fitted to the business for them to bring results (Boselie, Dietz and Boon, 2005). A Universalist perspective of HPWP highlights that there are several Human Resource practices which always bring about superior performance in any context. In addition, contingency theory argues that high performance work practice will be successful only when under specified conditions. Resource-based view framework complement contingency theory as it states that internal resources bring about competitive advantage when they are rare, inimitable, non-substitutable and valuable (Boselie, Dietz and Boon, 2005). In terms of inimitability, HPWPs should have path dependency and casual ambiguity. The contingency model highlights that HPWPs need to be put into meaningful groups of practices. Some research studies have shown that implementation of single practices cannot deliver enhanced performance (Boselie, Dietz and Boon, 2005). Some organisations which adopt one single practice do not improve productive and performance and sometimes may end to their decline. The strongest critics of the potential win-win situation resulting from High Performance Work Practices originate from two sources. First is the labour process objection of the benefits of HPWPs (Boselie, Dietz and Boon, 2005). The labour process model argues that the control of the work practices has a negative impact on work alienation and reduces job satisfaction. With the development of Human Resource Management, the labour process framework saw modern management evolving to becoming sophisticated. In the context of labour process, HRM is still an effective tool used to increase profits through direct management control (Brett and Linda 2003). Nevertheless, with the development of HPWPs that emphasizes on high commitment, this critique was considered irrelevant. However, there is an evolved labour process theory that recognizes a different work relationship existing between the employer and the employee. It argues that the ability of HPWPs to enhance performance and employee commitment is a myth. The theory argues that the bottom line result of high involvement is gradual work intensification, stress as well as job insecurity (Macky and Boxall, 2007). In addition, the results of HPWPs on the side of the employee become less positive when complexity of these practices increases. For instance, when enhanced information flow or performance appraisal is added in the workplace. A lot of pressure from so many HPWPs initiatives may overload the employees (Macky and Boxall, 2007). Over-zealous implementation of these practices may also cause work intensification that may in the long-run reduce the benefits of HPWP on the employees (Macky and Boxall, 2007). This may yield a lose-win situation where the employer benefit but the employee suffers in return. Job insecurity and high employee involvement are two different side of a coin. The existing difference lies in how workers internalize these practices. When the employees view these practices as beneficial to themselves and the company, they will interpret their experience of high performance work practice positively. If employee sees not benefits, any practices will be viewed as extras irrespective of the potential benefits (Macky and Boxall, 2007). If the driving motive of HPWPs is to lower costs and improve employee performance, then the wellbeing of the employees becomes secondary. This is why the employees perceive HPWPs negatively. In addition, the extent to which managers understand the benefits of HPWPs plays a major role. It is not surprising that managers misinterpret the purpose of HPWPs as fads. When HPWPs are implemented without considering the wellbeing of the employee’s intrinsic satisfaction, they may be considered exploitative leading to work intensification. This factor may create a fine line between beneficial outcomes of HPWPs and work intensification. A number of employers do not implement HPWPs with these factors in mind and this is termed as ‘low road’ to high performance (Macky and Boxall, 2007). This explanation highlights that despite the increasing intensity in HPWP implementation, there is a trend of employee’s job discretion and job security seeming to erode. Therefore, it can be seen that the implementation of High Performance Work Practice require high level of commitment in order to create a win-win situation since may employers and employees may not reap the intended benefits (Macky and Boxall, 2007). Yet, this does not disprove the ability of HPWPs to yields positive outcome to employers and employees. The outcomes of the HPWPs can be explained further by use of case studies. Bacardi-Martini UK has implemented HPWPs in its operations. Bacardi-Martini UK is a drinks manufacturer based in the United Kingdom that has a turnover of approximately 300 million pounds and was ranked 5th in top 100 Best Companies Survey in 2004 (Ramsay, Scholaries and Harley, 2000). It is considered an innovator in the ready-to-drink market since the 1990s. Bacardi-Martini UK has succeeded over the years as a result of the employees feeling committed and being loyal towards the firm. This was established from the survey which showed that 87% of the employees have high level of pride in their work (Ramsay, Scholaries and Harley, 2000). This shows that the employees in Bacardi-Martini have high level of intrinsic job satisfaction which has enabled them to be dedicated to their work. One of the major factors that have led to their success is the High performance Work Practices that are linked effectively to managing change and people culture (Ramsay, Scholaries and Harley, 2000). For instance, the people-focused culture of the company has enhanced the company’s adaptability and innovation. The specific people-driven performance culture of Bacardi-Martini is represented by PACT values that stand for Productivity, Answerability, Creativity and teamwork. Every employee is inaugurated into the Pact values when they are fast recruited. The Pact values define the behaviour of the employees and create success factors (Ramsay, Scholaries and Harley, 2000). The company recognizes that fact that success comes when the employees are committed and are happy with their work. Bacardi-Martini employee development initiatives are considered very important and they ensure that family atmosphere is bonded through the organisational activities. The company has developed a number of benefit packages that is destined to facilitate family values (Ramsay, Scholaries and Harley, 2000). For instance, the company offer benefits such as free meals, life and health insurance and helpline to name a few. These benefits are offered to the employees as well as their family members, spouses and partners. This has enabled the employees feel appreciated and has boosted their commitment to their work. The benefit packages of Bacardi have enabled 85% of the employees feel positive about the PACT values in the organisation (Ramsay, Scholaries and Harley, 2000). In addition, intrinsic job satisfaction is felt through explicit family culture that involves flexible working and also work-life balance (Ramsay, Scholaries and Harley, 2000). An additional high performance work practice that boost employee involvement is how the company make sure the staff is involved in decision making process. In doing so, employees are encouraged to share ideas on business direction, productivity issues and leadership challenges in the organisation (Ramsay, Scholaries and Harley, 2000). Bacardi also promotes leadership style in order to enhance staff involvement and organisational performance. The management is considered to having inspirational leaders who are concerned with the wellbeing of the employees. In the company, the implementation of high performance work practices has enhanced staff engagement as well as performance (Ramsay, Scholaries and Harley, 2000). This in return has led to the success of the company by boosting its competitive advantage. Another case study that shows the success of HPWPs is in Pannone Solicitors. Pannone and Partners was founded in 1852 and is a legal firm located in Manchester. The company has recorded a turnover of 33.5 million pounds (Ramsay, Scholaries and Harley, 2000). The legal profession over the years has been faced with stiff competition but Pannone has overcome this challenges. The success of the company is due to the implementation of HPWP programs. The HPWP strategy adapted in the company is “a balanced growth for competitive advantage” (Ramsay, Scholaries and Harley, 2000). This HPWP program means that the company maintain involvement and retains the people culture. “Enjoyment” is considered a part of the working life in the company. About 86% of employees in Pannone are said to have high level of fun at the workplace. Like in Bacardi-Martini, Pannone is focused on people-culture although it is not a family company. However, it has invested in employees welfare programs. The work-life balance is the main HPWP strategy implemented by the company (Jian and Jia, 2015). Generally, the Pannone places values on the employees. Pannone has also succeeded as a result of high involvement approach through effective communication channels. There is free and open flow of information via informal chats. The management is always free and available to talk to the employees regarding work situations. However, as mentioned earlier, HPWP sometimes may not guarantee a win-win situation in organisations. For instance, in the case of Bundaberg Brewed drinks, HPWPs have not necessarily yielded a win-win situation (Boselie, Diet and Boon, 2005). The company has endeavoured to increase employee involvement through on-the-job training and development of key performance indicators used in performance review. Meeting are held monthly in order to encourage open communication and idea sharing. However, the management structure of the organisation has continued to be rigid and hierarchical with loss of value in teamwork (Boselie, Diet and Boon, 2005). The efforts to develop a more family-based culture have not borne any fruit. This is due the implementation of the high performance work practices in the organisation based on the need of the management to enhance the company’s performance. The well-being of the employees is not considered as such and this make them feel unappreciated and therefore employees do not perceive these HPWPs as being beneficial (Boselie, Diet and Boon, 2005). Even with the implementation of the HPWPs in Bundaberg Brewed drinks, the performance of the company has remained unchanged and dormant. Another company that has not benefited from the implementation of High Performance Work practices is Homart Pharmaceuticals. Homart Pharmaceuticals is located in Sydney and deals with the manufacturing of vitamin and health supplements as well as cosmetics (Boselie, Diet and Boon, 2005). In the company, the employees are recruited in relation to their motivation and their fit with Hormart’s culture of teamwork. The company has set up an action plan system where everybody takes part in decision making. The benefits of HPWPs in the company are not clearly seen since their implementation is organisational-based and not in the well-being of the employees (Boselie, Diet and Boon, 2005). The company has been under pressure due to stiff competition and their returns has been seen to increase but not as expected by the management (Boselie, Diet and Boon, 2005). We can conclude that HPWPs in Homart pharmaceuticals does not lead to a win-win situation in terms of positive outcomes at the employer and employee level. In conclusion, HPWPs can generate win-win benefits for both the employer and the employees but has also the potential to generate win-lose, lose-win and lose-lose combination outcomes. In the essay, we see that effective leadership and human resource practices lead to employee involvement which leads to an enhanced performance of the employees and the employers. Trust in the management and employees’ engagement also brings about win-win benefits. It will be unwise to conclude that HPWPs only bring about win-win situation for employers and employee. Studies have argued that HPWPs not always benefit the firm of the employees. In addition, employees’ attitudes towards HPWPs mediate the impacts of these practices on the firm outcomes. Over-zealous implementation of HPWPs strategies in the organisations may lead to work intensification leading to reduced benefits for the employees. The concept of High Performance Work Practice is very complex. 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