High-Performance Work Systems - Assignment Example

High Performance Work Systems Name: Tutor: Course: Date: PRACTICE EXAM Question 1: Discuss the relationship between the concept of high performance work systems and organisational performance. Does having a clear and consistent HRM message assist organisational performance? High performance work systems (HPWS) are tools of management desired to maximize the contribution of workers. Human resource recognizes that the production process is complex and requires creative, innovative and cooperative employees. These systems reduce transaction costs and increase asymmetry of information as employees become self-regulating and controlling. It also minimizes employee resistance implying that HPWS increases organizational performance. Lepak et al. (2012) observes that using HPWS enhances employee knowledge, opportunity, motivation, abilities and skills that are positively connected to positive organizational outcomes. These outcomes are better financial performance, enhanced safety, higher quality and productivity, lower turnover and greater commitment. Their findings show that motivation, skill and opportunity are positively related to employee motivation and human capital. However, Combs et al. (2006) argues that despite strong evidence of positive relationship between firm performance and HPWS, mechanisms linking organizational outcomes and HRM practices remains vague. The authors point to a notion that there could be multiple dimensions to a more complete and broad picture of the relationship between organizational outcomes and HRM practices. For example, in 2003/04 a survey was conducted on all company employees and management of Victorian Healthcare system that uses HPWS. Clear and consistent messages on desired behaviors and attitudes among employees direct them to achieve goals as proposed by the management. Organizations with positive employee attitude, values, beliefs and behavior tend to have fewer complaints, less hours lost, low turnover, less disciplinary case or claims and stress related episodes. Question 2: “High performance work systems always benefits the worker”. Critically assess this statement. There is a full spectrum of debate on whether High performance work systems are beneficial to the worker, firm or work-life balance. Base on the original ‘P-Workplace power, I-Information, R-Rewards and K-Knowledge’ model of Lawler (1986), Richardson, Vandenberg and Eastman (1999) found these variables as mutually reinforcing. They obtained that HPWS had the ability to empower workers who in turn are able to make informed decisions, enhance knowledge and information and obtaining for performance. Macky and Boxall (2008) argues that although high involvement processes are deemed as a win-win situation for employees and their organization, there are theoretical and empirical issues to be considered. One aspect is that high involvement practices improve organizational commitment and job satisfaction. The other is the presence of a healthy work environment that affects positive self-perceptions among employees. Warr (1994) suggests that high involvement systems provides employees with opportunities for interpersonal work interaction, clear communication in job expectations, greater work variety, maximization of one’s work skills, autonomy and opportunity for control. On the contrary, Yousef (2002) notes that work intensification yields negative employee outcomes owing to peer pressure to conform and succeed in team-based pay-for-performance. HPWS have great gains to workers depending on the managerial approach. For example, in New Zealand workers pointed to increased job satisfaction with use of HPWS but increased stress among apparel workers in Thailand. The results in New Zealand were also consistent in a US health care facility and insurance company. HPWS enhances employee well-being only if it fosters and rewards employee involvement and not work intensification. Therefore, HPWS do not always benefit the worker. Question 3: Does organizational context influence the practice and effectiveness of high performance work systems? In an organization context, HPWS relate to multiple goals, tensions and complex messages. Organizations can decide to pursue autonomy or empowerment where employees are led to have greater commitment or compliance. Boxall and Bartram (2011) argues that organizational culture can either foster openness to employee flexibility and openness to change in the long-run or reinforce predictable and reliable behavior of employees in the short-run. Bartram et al. (2012) notes that the effective uses of HPWS systems positively relate to employee attitudes and transformational leadership of those implementing HPWS practices in a range of industries. Detrimental effect of emotional labor, turnover and burnout are minimized where workers perceive existence of HPWS in place. Casual workers For example, in the Australian Cinema industry case, three major exhibitors employing majority casual workers with similar HPWS strategies provide formalized training programmes. It was found that the company culture gave paramount importance to the customer, employee compliance and organizational performance. This means that casual employees have higher levels of compliant behavior with higher supervisory ratings of behavior. It means that in an organizational context that requires workers to comply, supervisors will perceive them as good performers (Shields, 2007). This model is in opposition to that employing greater employee control in an individualized customer service. Higher employee commitment with longer tenure and not simply compliance to systems is what helps the supervisors to perceive better performance. This means that organizational context positively or negatively influences effectiveness and practice of HPWS. Question 4: What is the link between high performance work systems and organisational productivity? Use Bowen and Ostroff’s (2004) framework to explain your answer. High Performance Work systems are intricately linked and socially complex in ways making them difficult to be copied by competitors. HPWS requires use of business strategies depending on the strategic mission of the form. A firm with an innovation strategy invests in innovative projects while customer service centers on service. This requires employee interpretation of work climate to influence organizational outcomes, behavior and attitudes. Bowen and Stroff (2004) suggests that there are two dimensions of firm and HRM practices; strategic perspectives and systems which influence employee attributes and brings out the desired outcomes. These desired outcomes at the firm level are competitive advantage, financial performance and productivity. HRM systems help organization to achieve its strategic goals by motivating employees to adopt the desired behaviors and attitudes. The climate of innovation, safety, change and service are the specific practices that build motivations and task-relevant skills (Becker & Huselid, 2006). Productive firms have been linked to management employment strategies that increase employee motivation and competition among firms. Causal employment matches the business activity to working time while reducing direct costs. Leighton and Painter (2001) notes that organizations pressure HRM to increase efficiency through casualization. For example, a Canadian Hospital hiring employees on causal basis found that they could seek work in their own terms and derive security from their flexibility. This implies that organizations are able to be productive through improved employee work climate and casualization that increases their opportunities in selecting jobs. HPWS makes organizations to be productive by having productive employees and efficient work systems. Question 5: Can high performance work systems be used in any organisation? HPWS are associated with higher job satisfaction and at the same time related to work-life imbalance, fatigue and job-induced stress. This depends on the nature of business and strategic objectives of the organization. For example, US workers working in the services sector and not in manufacturing were displaced by the global competition. This shows that firms in the services sector had changed to casualization as opposed to those in manufacturing. Jensen and Kletzer (2005) argue that organizations that pursue work intensification are more likely to witness negative employee outcomes. For example, organizations within the apparel industry have self-directed teams working long hours and reports work-life imbalance. Use of HPWS in these organizations likely lead to work intensification and increased job strain (Ployhart & Moliterno, 2011). In the steel and medical electronics sector, it was found that HPWS increased satisfaction and commitment among workers. Appelbaum et al. (2000) observes that HPWS has positive outcomes on the effect of stress on the employee and other outcomes. Shields (2007) argue that depending on the managerial policy implementation, HPWS has the ability to increase satisfaction, reduce stress levels and improve organizational productivity. For example, when HPWS was used in insurance and healthcare sectors in the US it gave consistent results. This implies that HPWS is a universal model to be used in all organizations. However, its application should be based on the sector and implementation should be based on certain aspects of it that will determine commitment and satisfaction of employees. Question 6: What is the theoretical link between high performance work systems and superior organizational performance? Superior organizational performance is identified by greater opportunities for employees, maximization of employee skills and motivated workforce. Superior organizational outcomes are feasible once the various HR practices have been achieved through various business objectives and strategies implemented. Becker and Huselid (1998) views organizational performance as multidimensional pursued in strategic HRM research. Similarly, Dyer and Reeves (1995) asserted that superior organizational outcomes are HR, operations and finance. They note that HR constitutes employee turnover, behavior, attitudes, abilities and skills while operations involve innovation, quality of service, product quality and productivity. Financial outcomes include return on assets, return on investment capital and sales growth. Ostroff and Bowen (2000) argue that HPWS have differing and unequal relationships with organizational performance. They argue that HPWS should first influence HR outcomes which will influence operations and the later to influence financial outcomes (Lawler, 1986). For example, if Hilton Sydney management would like to have super organizational performance, they must begin by HR practices that encourage productive behavior among employees. On the other hand, Lepak and Snell (1999) argue that it is the human capital is responsible for superior organizational performance only when return on investment exceeds labor costs. Ployhart and Moliterno (2011) observe that organizations can use HPWS to develop and maintain organization specific and generic human capital which in turn drives super operations and later superior financial performance. It shows that through motivation-related variables or human capital variables that it is possible to link the influence of HPWS on financial or operational performance. Reference list Appelbaum ET Bailey P Berg & Kalleberg AL 2000, Manufacturing advantage: Why high- performance work systems pay off. Ithaca, NY: ILR Press. Bartram T Stanton P Leggat S Casimir G & Fraser B 2007, Lost in translation: exploring the link between HRM and performance in healthcare. Human Resource Management Journal 17(1), 21-41. Becker B & Huselid M 2006, Strategic human resource management: where do we go from Here? Journal of Management 32(6), 898-925. Bowen DE & Ostroff C 2004, Understanding HRM-firm performance Linkages: The role of the ‘strength’ of the HRM system. Academy of Management Review. Vol. 29, No. 2, 203- 221. Boxall P Ang S & Bartram T 2011, Analyzing the ‘black box’ of HRM: uncovering HR goals, mediators and outcomes in a standardized service environment. Journal of Management Studies 48(7), 1504–1532. Combs J Liu Y Hall A & Ketchen D 2006, How much do high-performance work practices matter? A meta-analysis of their effects on organizational performance. Personnel Psychology, 59: 501-528. Dyer L & Reeves T 1995, Human resource strategies and firm performance: What do we know and where do we need to go? International Journal of Human Resource Management, 6: 656-670. Jensen JB & Kletzer L 2005, Tradable services: understanding the scope and impact of services off-shoring. London. Lawler EE 1986, High-involvement management: Participative strategies for improving organizational performance. San Francisco: Jossey-Bass. Leighton P & Painter RW 2001, Casual workers: still marginal after all these years? International Journal of Contemporary Hospitality Management, Vol. 10 (1)24-33. Lepak DP, Jiang K Hu J & Baer JC 2012, How does Human Resource Management influence organizational outcomes? A meta-analytic investigation of mediating mechanisms. Academy of Management Journal. Vol. 55, No. 6, 1264-1294. Macky K & Boxall P 2008, High-involvement work processes, work intensification and employee well-being: A study of New Zealand worker experiences. Asia Pacific Journal of Human Resources. 46(1). Ployhart RE & Moliterno TP 2011, Emergence of the human capital resource: A multilevel model. Academy of Management Review, 35: 127-150. Shields J 2007, Managing Employee Performance and Reward: Concepts, Practices, Strategies. Cambridge University Press. Vandenberg RJ Richardson HA & Eastman LJ 1999, The impact of high involvement work processes on organisational effectiveness: A second order latent variable approach. Group and Organisational Management 24(1): 300–39. 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