High-Performance Working and Organisational Development - Essay Example

STRATEGIC HUMAN RESOURCES MANAGEMENT HIGH PERFORMANCE WORKING AND ORGANISATIONAL DEVELOPMENT Introduction Strategic management of human resourcesis a powerful concept which is emerging as a tool for enhancing organizational efficiencies and achieving outstanding results. While hitherto fore, production and marketing were considered as core management functions, it is only of late that strategic human resources is being regarded as an important component of organizational efficiency. The understanding of organization wide impact of human resource development is resulting in this concept exploiting personnel resources to advantage. Strategic human resources management comprises of a number of paradigms. High performance working (HPW) is one which is an emerging model of strategic human resources development. The case study of South African Breweries (SAB) is an ideal model of organizational development through focus on human resources development to achieve the company's vision. (Johnson, 2000). The alignment of the company's vision with performance enhancement and innovation led to overall development of the organization. Planning and structuring of programme of human resources development formed the focal point to achieve growth globally in an environment which was in a state of flux in South Africa. This change was achieved by strategic human resources management thinking by the Human Resources Department of the company. High performance working and planned organizational development through the human resources perspective are thus seen to form a link in strategic human resources management The growth of the information, knowledge and service economy brought about the need to adapt a more flexible model of working wherein work is a dynamic rather than a cyclical process exemplified by the assembly line in the concept popularized by Taylor. (HPW, 2006). The Taylorian model is seen to be quite inefficient and ineffective in delivering services in the modern economy focused on the need to design solutions for individual customers. High performance working on the other hand places emphasis on policies in organizations that are people centric thereby enhancing the focus on delivering the best to the customer down the chain. This has necessitated a large cultural shift in many organizations which may or may not be wholly accepted by many people. HPW has been defined as evolving a decentralized, non hierarchical flat organizational structure with limited management control, high level of autonomous working based on trust and commitment and team working. (HPW, 2006). As culture involves both strategy and people, there is an innate link between HPW and strategic human resources management. The implementation of HPW is a powerful strategic shift to ensure personnel development is a change which is implemented organizationally. The need to adopt a wholly new and dynamic culture is essential. The key focus of this strategy is on the human resources staff that has to ensure implementation of the concept in an internal environment which may or may not be supportive of the same. For HPW to succeed the vision of the company has to shift to providing value to the customer and aligning the product to the needs of the customer. This will have to be a vision based, top down process which can be implemented through out the organization in a systematic manner. Holbeche (2002) has provided a check list for high performance organizations which have adopted HPW. The key components of HPW have been designated as development of people through structured training programmes to manage the self, build team capabilities and capacities to implement projects simultaneously with improvement of performance and fulfilling the goals of the organization. The aim should be to create an evolved, committed employee down the chain to enable delivery of core service to the customer. The process of HPW is thus a change from the traditional model and there is as much emphasis on team building, trust and commitment as on technical skills. The focus on people in this process is indicated by an arrangement of fair treatment to those who are leaving the organization which is a special facet of HPW. The first stage envisaged in implementation of HPW is evolving a vision for goals to be achieved by the company as well as creating capacities within the organization for achieving these goals. The company is increasingly evolved to achieve global standards and people skills to include more number of soft skills such as creativity, empowerment and smooth problem solving than technical proficiency. Learning and team working is the focus of HPW. Thus the process of learning is itself dynamic with programs which do not emphasize teaching and but focus on learning. The motivation is deemed to come from within the learner which can create an overall culture to absorb skills and relations. All these finally result in a greater role for the employee in the results achieved by the company. (DTI, 2002). The process of HPW also entails good social relationship. Thus the management ensures that those employees who are not able to cope up with the process of change are provided alternate avenues for self development. Thus alternative training for resettling of workers is provided by the organization. The problems in implementation of the HPW however are many. These vary from internal resistance to translating the training inputs into results achieved in greater effectiveness. The experience of adoption of HPW practices has been encouraging. A recent study by the Engineering Employers Federation and CIPD in UK has indicated that productivity as well as profits have increased by 20 percent. (EEF, 2003). Consequently the UK Government has indicated its full fledged support to such initiatives which has resulted in wide spread adoption of this concept and higher efficiencies. (DTI, 2003). This is also indicated by a confirmatory study carried out by Sung and Ashton (2005) which has indicated that 95 percent of the companies surveyed were using performance appraisal and up to 16 percent were using share options as a measure for employee commitment. HPW comprises of two sets of practices, performance and enabling. The performance practices include that of ability to work in teams while enabling practices include the facility to learn to communicate and so on which motivates people to alter the way they work. (WMC, 2005). Organization Development has been defined as the application of behavioral science attributes to a company across the board to enhance the effectiveness of the organization in its strategy, structures and processes. (Cummings & Worley, 1997, p 2). A working definition of OD can be evolving collaboration between the leaders and the groups to enable implementing systemic changes effectively throughout the organization with a view to improving productivity as well as creating greater employee satisfaction. (Vroom, Nd). HPW as a form of organizational development (OD) has been very effectively employed by South African Breweries as indicated in the Case Study. (Johnson, 2000). The subtle combination of the precepts of HPW has resulted in achieving high level of organizational as well as personal growth for the company and its staff. Further more these concepts have been very effectively used by the management in a structured programme of change. OD like HPW has high reliance on the soft restructuring of the organization by developing a culture of effectiveness and efficiency. To be effective, organizational development needs to be a planned process, which is taken across the board, has to be supervised and supported by the top management with interventions which are behavioral in nature and results in overall enhancement of effectiveness of the organization. The aim of OD is to enhance the interactive potential within the organization by adoption of interventions which can lead to members developing better forms of working with each other. The members take these measures voluntarily and having developed an understanding of the concepts have the ability to make informed choices. (Nielsen, 1984). The case study of SAB provides an effective model of an ideal mix of the precepts of HPW and OD to manage the transfer of a company which doubled its production within a decade while at the same time cutting its workers strength to 7000. The company also assumed leadership status in the South African liquor market and is effectively competing globally. SAB had been a normal, run of the mill liquor manufacturer in the apartheid era in South Africa hemmed in by sanctions and a older business model. At the end of the 1980's however the company began adopting innovative practices from greater integration such as the Integrated Management Process which evolved with a series of workshops aimed at sharing values. This finally developed into acceptance of these values by employees in the company to include customer service, commitment, equality and quality amongst others. Vision setting was one of the key measures which was initially undertaken by the company and resulted in identification of the business values which drove it towards this image. The next process involved redesigning jobs in which the company brought in a four tiered team based structure at all levels, regional, departmental, unit as well as shift. These teams were designed to be multi skilled and were self sufficient in the entire spectrum of tasks that were required to be managed. From multi skills it moved to the autonomous mode gradually within the period of three to four years. All this was possible with large time invested by the company in training in general followed by individual specific training which could extend even up to a period of one year. All this time the company ensured that its focus remained on the employee. Thus those employees who could not adjust to the new culture were provided alternatives for employment through a programme known as Project Noah. This catered for providing the retrenched employees alternative employment though skill building including assistance in establishing their enterprises. The company simultaneously ensured that diversity was fully implemented leading to ease of adjustment to the democratic governance that emerged in South Africa in 1994. The system of people balance sheet enabled the company to maintain its focus on the employees and ensure that their needs were fully met at all times while at the same time performance was linked to attaining higher degree of effectiveness. The strategy for change adopted by SAB ensured that it demonstrated best practices exemplified by EPW as well as OD. Thus the overall direction emerged from a strategic vision which saw the changes that were occurring in the external environment and provided a direction to the organization through strategic focus. Reviewing the processes to adopt team based practices to reinforce employee network was supplemented by the practice of extensive training to adapt to change. Finally the company ensured that those employees who could not adjust to the transformation process were effectively retrenched. Behavioral processes of OD were effectively used to align employee development with strategic results. Ulrich has indicated that the key indicators of strategic involvement of the human resources department are their partnering business leaders in reengineering and developing the organisation. (Ulrich, 1993, p 83) The SHRM orientation of the Human Resources Department also entails aligning to the overall goals and contributing to the overall strategy. (Ulrich, 1993, p 54). Available evidence in the case study indicates that in SAB, the Human Resources Department had fully involved itself in SHRM and had adopted a number of policies which were designed to attain the same. The involvement of the department in the change process was also total. This was evident with parallel indicators such as involvement in the vision of the company, understanding the total environment in South Africa and assisting the top management in adjusting to the same. Thus SAB could very effectively adapt to democratic governance in 1994 as well as carry out restructuring required in the company, post apartheid. As these issues involved diversity management in the company, the role of HRD was significant. The rewards strategy was also aligned with the best practices adapted from external sources thus ensuring jobs and skills matching which is a key facet of strategic human resources management. (Reward Strategy, Nd). The behavioural approach adopted by SAB by emphasising on team based functioning had to be supported by effective multi skill development. The HR Department was totally involved in designing the training plans which were effective in developing skills in teams as well as individuals. The emphasis on soft skill building in SAB is also a sign of very effective role played by the HR department in the company. The final impact of the Department was in retrenching workers, thereby achieving a high degree of commitment from all the employees assured of the fact that the company cared for their welfare. In all these processes, a very intimate involvement of the HR department has been noticed throughout the period of SABs emergence as a leading global wine producer. Reference: 1. Cummings Thomas, G. Worley, Christopher G. (1997). Organization Development and Change. Sixth Edition, South-Western Publishing, 1997, p.2. 2. DTI. (2002). High performance workplaces: the role of employee involvement in a modern economy. London: DTI. 3. DTI. (2003) Department of Trade and Industry. (2003) High performance workplaces: informing and consulting employees. London: DTI. Available at: http://www.dti.gov.uk/files/file21267.pdf 4. EEF. (2003). Engineering Empoyer's Federation and Chartered Institute of Personnel and Development. (2003) Maximising employee potential and business performance: the role of high performance working. London: EEF. Available at: http://www.eef.org.uk/ 5. Holbeche, L. (2003) High performance organisation checklist. Horsham: Roffey Park Institute. 6. HPW (2006). High performance working. Accessed on 08 January 2007 at http://www.cipd.co.uk/subjects/corpstrtgy/general/highperfwk.htm 7. Johnson, Rebecca. (2000). The Beverage Report. Case Study Provided. 8. Nielsen, J. (1984). Becoming an OD Practitioner", Englewood Cliffs, CA: Prentice-Hall. 9. Reward Strategy. (Nd). Retrieved on 8 January 207 from http://www.kent.gov.uk/jobs-and-careers/rewards-and-benefits/reward-strategy/ 10. Sung, J. and Ashton, D. (2005) High performance work practices: linking strategy and skills to performance outcomes. London: Department of Trade and Industry in association with CIPD. Available at: http://www.cipd.co.uk/subjects/corpstrtgy/busiperfm/dtihpwprac.htm 11. Ulrich, David. (1997). Human Resource Champions: the next agenda for adding value and delivering results. Harvard: Harvard Business School Press. 12. Vroom, Michael F. (No Date (Nd). Organizational Development.. Retrieved on 8 January 207 from http://chumans.com/skills8.htm 13. WMC. (2005). Wales Management Council. (2005) High performance Wales - real experience, real success: high performance working in practice. Cardiff: WMC. Bibliography Books 1. Cummings Thomas, G. Worley, Christopher G. (1997). Organization Development and Change. Sixth Edition, South-Western Publishing, 1997, p.2. 2. Holbeche, L. (2003) High performance organisation checklist. Horsham: Roffey Park Institute. 3. Nielsen, J. (1984). Becoming an OD Practitioner", Englewood Cliffs, CA: Prentice-Hall. 4. Ulrich, David. (1997). Human Resource Champions: the next agenda for adding value and delivering results. Harvard: Harvard Business School Press. Reports 5. DTI. (2002). High performance workplaces: the role of employee involvement in a modern economy. London:. London: DTI. 6. DTI. (2003) Department of Trade and Industry. (2003) High performance workplaces: informing and consulting employees. London: DTI. Available at: http://www.dti.gov.uk/files/file21267.pdf 7. EEF. (2003). Engineering Empoyer's Federation and Chartered Institute of Personnel and Development. (2003) Maximising employee potential and business performance: the role of high performance working. London: EEF. Available at: http://www.eef.org.uk/ 8. HPW (2006). High performance working. Accessed t http://www.cipd.co.uk/subjects/corpstrtgy/general/highperfwk.htm 9. Johnson, Rebecca. (2000). The Beverage Report. Case Study Provided. 10. Sung, J. and Ashton, D. (2005) High performance work practices: linking strategy and skills to performance outcomes. London: Department of Trade and Industry in association with CIPD. Available at: http://www.cipd.co.uk/subjects/corpstrtgy/busiperfm/dtihpwprac.htm 11. WMC. (2005). Wales Management Council. (2005) High performance Wales - real experience, real success: high performance working in practice. Cardiff: WMC Articles 12. Reward Strategy. (Nd). http://www.kent.gov.uk/jobs-and-careers/rewards-and-benefits/reward-strategy/ 13. Vroom, Michael F. (No Date (Nd). Organizational Development. http://chumans.com/skills8.htm Web Sites 14. http://www.cipd.co.uk 15. http://www.dti.gov.uk 16. http://www.kent.gov.uk 17. http://chumans.com/ 18. http://www.eef.org Read More