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Creating HighPerformance Work Systems

After studying this chapter, you should be able to
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Discuss the underlying principles of high-performance work systems.
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Recommend processes for implementing high-performance work systems.
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Identify the components that make up a high-performance work system.
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Discuss the outcomes for both employees and the organization.
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Describe how the components fit together and support strategy.
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Explain how the principles of high-performance work systems apply to small and mediumsized organizations.
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Expanding Human Resources Management Horizons
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high-performance work system (HPWS)
A specific combination of HR practices, work structures, and processes that maximizes employee knowledge, skill, commitment, and flexibility
o, youve finished reading 15 (or so) chapters on HRM. Congratulations textbooks do not always make for the most gripping reading. And if you read this one cover to cover, you were probably cramming for an exam. But before you close this book, think about the following question: What is more difficultdesigning effective HR practices or managing them all together as one system? In the past, HR textbooks simply ended after each individual aspect of HRM was introduced and explained. But in todays competitive environment, many organizations are discovering that its how the pieces are combined that makes all the difference. After all, managers typically dont focus on staffing, training, and compensation practices in isolation from one another. These HR practices are combined into an overall system to enhance employee involvement and performance. So now that we have talked about the individual pieces, we thought it might be useful to spend some time talking about how they fit together into high-performance work systems. A high-performance work system (HPWS) can be defined as a specific combination of HR practices, work structures, and processes that maximizes employee knowledge, skill, commitment, and flexibility. Although some noteworthy HR practices and policies tend to be incorporated within most HPWSs, it would be a mistake for us to focus too much, or too soon, on the pieces themselves. The key concept is the system. High-performance work systems are composed of many interrelated parts that complement one another to reach the goals of an organization, large or small. We will start by discussing the underlying principles that guide the development of high-performance work systems and the potential benefits that can occur as a result. Then we will outline the various components of the system, the work-flow design, HR practices, management processes, and supporting technologies. (See Figure 16.1.) We will also describe the ways in which organizations try to tie all the pieces of the system together and link them with strategy. We end the chapter with a discussion of the processes organizations use to implement high-performance work systems as well as the outcomes that benefit both the employee and the organization as a whole.
Fundamental Principles
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In Chapter 1, we noted that organizations face a number of important competitive challenges such as adapting to global business, embracing technology, managing change, responding to customers, developing intellectual capital, and containing costs. We also noted some very important employee concerns that must be addressed, such as managing a diverse workforce, recognizing employee rights, adjusting to new work attitudes, and balancing work and family demands. We now know that the best organizations go beyond simply balancing these sometimes competing demands; they create work environments that blend these concerns to simultaneously get the most from employees, contribute to their needs, and meet the short-term and long-term goals of the organization. The notion of high-performance work systems was originally developed by David Nadler to capture an organizations architecture that integrates technical and social aspects of work. Edward Lawler and his associates at the Center for Effective Organization at the University of Southern California have worked with Fortune 1000
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Figure 16.1
Developing High-Performance Work Systems
Linkages to Strategy SYSTEM DESIGN Work flow HRM practices Support technology Principles of High Involvement The Implementation Process
OUTCOMES Organizational Employee
corporations to identify the primary principles that support high-performance work systems. There are four simple but powerful principles, as shown in Figure 16.2: Shared information Knowledge development Performancereward linkage Egalitarianism1 In many ways, these principles have become the building blocks for managers who want to create high-performance work systems. More important, they are also quickly becoming the foundation for current theories of human resources management. We will use them as a framework for the rest of the chapter.
The Principle of Shared Information

The principle of shared information is critical for the success of empowerment and involvement initiatives in organizations. In the past, employees traditionally were not givenand did not ask forinformation about the organization. People were hired to perform narrowly defined jobs with clearly specified duties, and not much else was asked of them. One of the underlying ideas of high-performance work systems is that workers are intimately acquainted with the nature of their own
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Figure 16.2
Underlying Principles of High-Performance Work Systems
Shared Information
PW H S S H
Egalitarianism
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work and are therefore in the best position to recognize problems and devise solutions to them. Today organizations are relying on the expertise and initiative of employees to react quickly to incipient problems and opportunities. Without timely and accurate information about the business, employees can do little more than simply carry out orders and perform their roles in a relatively perfunctory way. They are unlikely to understand the overall direction of the business or contribute to organizational success. On the other hand, when employees are given timely information about business performance, plans, and strategies, they are more likely to make good suggestions for improving the business and to cooperate in major organizational changes. They are also likely to feel more committed to new courses of action if they have input in decision making. The principle of shared information typifies a shift in organizations away from the mentality of command and control toward one more focused on employee commitment. It represents a fundamental shift in the relationship between employer and employee. If executives do a good job of communicating with employees and create a culture of information sharing, employees are perhaps more likely to be willing (and able) to work toward the goals for the organization. They will know more, do more, and contribute more.2 At FedEx Canada, at every single station across Canada, company officers and managing directors meet with employees at 5:30 a.m. and 10:00 p.m. to review the business data and answer questions.3
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The Principle of Knowledge Development

Knowledge development is the twin sister of information sharing. As Richard Teerlink, former CEO of Harley-Davidson, noted, The only thing you get when you empower dummies is bad decisions faster. Throughout this text, we have noted that the number of jobs requiring little knowledge and skill is declining while the number of jobs requiring greater knowledge and skill is growing rapidly. As organizations attempt to compete through people, they must invest in employee development. This includes both selecting the best and the brightest candidates available in the labour market and providing all employees opportunities to continually hone their talents. High-performance work systems depend on the shift from touch labour to knowledge work. Employees today need a broad range of technical, problemsolving, and interpersonal skills to work either individually or in teams on cuttingedge projects. Because of the speed of change, knowledge and skill requirements must also change rapidly. In the contemporary work environment, employees must learn continuously. Stopgap training programs may not be enough. Companies such as DaimlerChrysler and Roche have found that employees in high-performance work systems need to learn in real time, on the job, using innovative new approaches to solve novel problems. Likewise, at Ocean Sprays Henderson, Nevada, plant, making employees aware of the plants progress has been a major focus. A real-time scoreboard on the Henderson plant floor provides workers with streaming updates of the plants vital stats, including average cost per case, case volumes filled, filling speeds, and injuries to date. When people are better informed, they do better work. We operate in real time and we need real-time information to be able to know what we have achieved and what we are working towards, says an Ocean Spray manager. (See Case Study 1 at the end of the chapter for more on Ocean Sprays HPWS initiative.)4
The Principle of PerformanceReward Linkage

A time-tested adage of management is that the interests of employees and organizations naturally diverge. People may intentionally or unintentionally pursue outcomes that are beneficial to them but not necessarily to the organization as a whole. A corollary of this idea, however, is that things tend to go more smoothly when there is some way to align employee and organizational goals. When rewards are connected to performance, employees naturally pursue outcomes that are mutually beneficial to themselves and the organization. When this happens, some amazing things can result. For example, supervisors dont have to constantly watch to make sure that employees do the right thing. But in fact, employees may go out of their wayabove and beyond the call of duty, so to speakto make certain that co-workers are getting the help they need, systems and processes are functioning efficiently, and customers are happy. At Clearwater Seafoods, a global Canadian company of 2200 employees based in Bedford, Nova Scotia, nearly all employees participate in a bonus plan based on the volume of food that is packaged. Connecting rewards to organizational performance also ensures fairness and tends to focus employees on the organization. Equally important, performance-based rewards ensure that employees share in the gains that result from any performance improvement. For instance, Lincoln Electric has long been recognized for its efforts in linking employee pay and performance.
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USING THE INTERNET
The Principle of Egalitarianism
People want a sense that they are members, not just workers, in an organization. Status and power differences tend to separate people and magnify whatever disparities exist between them. The us versus them battles that have traditionally raged between managers, employees, and labour unions are increasingly being replaced by more cooperative approaches to managing work. More egalitarian work environments eliminate status and power difwww.nucor.com/aboutus.htm ferences and, in the process, increase collaboration and teamwork. When this happens, productivity can improve if people who once worked in isolation from (or in opposition to) one another begin to work together. Nucor Steel has an enviable reputation not only for establishing an egalitarian work environment but also for the employee loyalty and productivity that stem from that environment. Upper levels of management do not enjoy better insurance programs, vacation schedules, or holidays. In fact, certain benefits such as Nucors profitsharing plan, scholarship program, employee stock purchase plan, extraordinary bonus plan, and service awards program are not available to Nucors officers at all. Senior executives do not enjoy traditional perquisites such as company cars, corporate jets, executive dining rooms, or executive parking places. On the other hand, every Nucor employee is eligible for incentive pay and is listed alphabetically on the companys annual report. Moving power downward in organizationsthat is, empowering employees frequently requires structural changes. Managers often use employee surveys, suggestion systems, quality circles, employee involvement groups, and/or unionmanagement committees that work in parallel with existing organizational structures. In addition, work flow can be redesigned to give employees more control and influence over decision making. At Old Home Foods, one of the few independent, exclusively cultured dairy product manufacturers in North America, all employees are involved in the decisionmaking process of the business. Its part of the Old Home Foods culture, says owner Peter Arthur P. A. Hanson. To be a successful independent, you need to empower your employees and let them know they are critical to success.5 Job enlargement, enrichment, and self-managing work teams are typical methods for increasing the power of employees to influence decisions, suggest changes, or act on their own. With decreasing power distances, employees can become more involved in their work; their quality of work life is simultaneously increased, and organizational performance is improved. These four principlesshared information, knowledge development, performance reward linkage, and egalitarianismare the basis for designing high-performance work systems. They also cut across many of the topics and HR practices we have talked about elsewhere in this textbook. These principles help us integrate practices and policies to create an overall high-performance work system.
Nucor makes no secret of the importance of its employees. Read about its management philosophy and incentive-based compensation plans at Nucor at:
Anatomy of High-Performance Work Systems

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We said at the beginning of this chapter that high-performance work systems combine various work structures, HR practices, and management processes to maximize employee performance and well-being. And although we outlined the principles underlying such systems, their specific characteristics have not as yet been described in detail.
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Although it may be premature to claim that there is a foolproof list of best practices that can be implemented by every organization for every work situation, some clear trends in work design, HR practices, leadership roles, and information technologies tell us what high-performance work systems look like.6 Some of these are summarized in Figure 16.3.
Work-Flow Design and Teamwork

High-performance work systems frequently begin with the way work is designed. Total quality management (TQM) and reengineering have driven many organizations to redesign their work flows. Instead of separating jobs into discrete units, most experts now advise managers to focus on the key business processes that drive customer valueand then create teams that are responsible for those processes. Federal Express, for example, redesigned its delivery process to give truck drivers responsibility for scheduling their own routes and for making necessary changes quickly. Because the drivers have detailed knowledge of customers and routes, Federal Express managers empowered them to inform existing customers of new products and services. In so doing, drivers now fill a type of sales representative role for the company. In addition, FedEx drivers also work together as a team to identify bottlenecks and solve problems that slow delivery. To facilitate this, advanced communications equipment was
Figure 16.3
Anatomy of High-Performance Work Systems

Performance Reward Linkage
Shared Information Work flow

Self-managed teams Empowerment
Knowledge Development
Egalitarianism
Staffing
Selective recruiting Team decision making
Training
Broad skills Cross-training Problem solving Team training Incentives Gainsharing Profit sharing Skill-based pay
Compensation
Leadership
Few layers Coaches/facilitators
Technologies
HRIS Communications
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installed in the delivery trucks to help teams of drivers balance routes among those with larger or lighter loads.7 Similarly, when Colgate-Palmolive opened a plant in Cambridge, Ohio, managers specifically designed teams around key work processes to produce products such as Ajax, Fab, Dynamo, and Palmolive detergent. Instead of separating each stage of production into discrete steps, teams work together in a seamless process to produce liquid detergent, make polyurethane bottles, fill those bottles, label and package the products, and deliver them to the loading dock. By redesigning the work flow around key business processes, companies such as Federal Express and Colgate-Palmolive have been able to establish a work environment that facilitates teamwork, takes advantage of employee skills and knowledge, empowers employees to make decisions, and provides them with more meaningful work.8
Complementary Human Resources Policies and Practices

Work redesign, in and of itself, does not constitute a high-performance work system. Neither does total quality management or reengineering. Other supporting elements of HRM are necessary to achieve high performance. Several recent studies suggest that both performance and satisfaction are much higher when organizations combine their changes in work-flow design with HR practices that encourage skill development and employee involvement.9
Staffing Practices
Many high-performance work systems begin with highly directive recruitment and selection practices. Recruitment tends to be both broad and intensive in order to get the best pool of candidates from which to choose. Then, by selecting skilled individuals with the ability to learn continuously and work cooperatively, organizations are likely to make up for the time and expense they invested in selection. The good news is that human resources information systems have made it easier for firms to compile an inventory of their talent and search for employees with the specific skills they need. Talented employees come up to speed more quickly and take less time to develop. Too often organizations try to save money by doing a superficial job of hiring. As a consequence, they run the risk of hiring the wrong people and spending more on training and/or outplacement, severance, and recruitment of replacements. Especially in organizations that try to stay lean, perhaps after a painful cycle of downsizing, HPWS can be instrumental for effective performance.10
Training and Development

Like recruitment and selection, training focuses on ensuring that employees have the skills needed to assume greater responsibility in a high-performance work environment. For example, Schindler Elevator Corporation, the worlds second-largest manufacturer of elevators, provides a 60-hour prehire training program of instruction and testing in such subjects as orientation/company history, safety, plant policies and procedures, just-in-time (JIT) techniques, and basic shop math. The company also has an apprenticeship program that focuses on key areas based on its specific business needs. Apprentices are hired as machinists, tool and die makers, welders, electricians, mechanics, and so forth. In addition, Schindler gives each of its employees at least five days of classroom training every year. Similarly, team members at Saturn receive up to several hundred hours of training in their first few months. Typically, training focuses
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on technical, problem-solving, and interpersonal skills. Emphasis on teamwork, involvement, and continuous improvement requires that employees develop a broader understanding of work processes performed by others around them rather than rely on just knowing their own jobs. To accomplish this, organizations increasingly use cross-training, discussed earlier in the book. Recall that this involves training employees in jobs in areas closely related to their own. For example, nurses in the perinatal unit of TriHealth System implemented cross-training to facilitate teamwork and cooperation across units; even more, it helps nurses identify trouble spots that cut across several jobs and allows them to suggest areas for improvement. Beyond individual training, Eastman Chemical has established a training certification process that helps ensure that intact teams progress through a series of maturity phases. The teams certify their abilities to function effectively by demonstrating knowledge and skills in such areas as customer expectations, business conditions, and safety. Because these skills must be continually updated, Eastman Chemical requires that even certified teams periodically review their competencies.11
Compensation
Another important piece of a high-performance work system is the compensation package. Because high-performance work systems ask many different things from employees, it is difficult to isolate one single approach to pay that works for everyone. As a consequence, many companies are experimenting with alternative compensation plans. In order to link pay and performance, high-performance work systems often include some type of employee incentives. For example, an average of 10 percent of Saturn employees pay is linked to goals for quality and training. Other organizational incentives such as gainsharing, profit-sharing, and employee stock ownership plans focus employee efforts on outcomes that benefit both themselves and the organization as a whole. The Scanlon Plan, the Rucker Plan, and Improshare, three systems discussed in Chapter 10, have been used by companies such as TRW, Weyerhaeuser, and Xaloy to elicit employee suggestions and reward them for contributions to productivity. High-performance work systems may also incorporate skill-based pay plans. By paying employees based on the number of different job skills they have, organizations such as Shell Canada, Nortel Networks, and Honeywell hope to create both a broader skill base among employees and a more flexible pool of people to rotate among interrelated jobs. Both of these qualities are beneficial in a high-performance work environment and may justify the added expense in compensation. Honeywell has even experimented with what it calls intracapitala pool of money employees can spend on capital improvements if the company meets profitability goals.12 Recall that in addition to linking pay and performance, high-performance work systems are also based on the principle of egalitarianism. To reinforce this principle in plants utilizing high-performance work systems, Monsanto, AES, and Honeywell recently implemented an all-salaried workforce. The open pay plan, in which everyone knows what everyone else makes, is yet another feature of compensation systems used to create a more egalitarian environment that encourages employee involvement and commitment.13
Management Processes and Leadership

Leadership issues arise at several levels with high-performance work systems. At the executive level there needs to be clear support for a high-performance work environment, for the changes in culture that may accompany this environment, and for
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the modification of business processes necessary to support the change. These concerns will be addressed in more detail shortly in our discussion of implementation issues. Organizations such as American Express and Reebok International found that the success of any high-performance work system depends on first changing the roles of managers and team leaders. With fewer layers of management and a focus on team-based organization, the role of managers and supervisors is substantially different in an environment of high-performance work systems. Managers and supervisors are seen more as coaches, facilitators, and integrators of team efforts.14 Rather than autocratically imposing their demands on employees and closely watching to make certain that the workers comply, managers in high-performance work systems share responsibility for decision making with employees. Typically, the term manager is replaced by the term team leader. And in a growing number of cases, leadership is shared among team members. Kodak, for example, rotates team leaders at various stages in team development. Alternatively, different individuals can assume functional leadership roles when their particular expertise is needed most.
Supportive Information Technologies

Communication and information technologies are yet one more piece that has to be added to the framework of high-performance work systems. Technologies of various kinds create an infrastructure for communicating and sharing information vital to business performance. Federal Express, for example, is known for its use of information technology to route packages. Its tracking system helps employees monitor each package, communicate with customers, and identify and solve problems quickly. Sally Industries uses information technology to assign employees to various project teams. The company specializes in animatronics, the combination of wires and latex that is used to make humanoid creatures such as are found in Disneys Hall of Presidents. Artisans employed by Sally Corporation work on several project teams at once. A computerized system developed by the company helps budget and track the employee time spent on different projects. But information technologies need not always be so high-tech. The richest communication occurs face to face. The important point is that high-performance work systems cannot succeed without timely and accurate communications. (Recall the principle of shared information.) Typically the information needs to be about business plans and goals, unit and corporate operating results, incipient problems and opportunities, and competitive threats.15
Fitting It All Together

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Each of these practices highlights the individual pieces of a high-performance work system. And while we have emphasized throughout this text that certain HR practices are better than others, recall that in high-performance work systems the pieces are particularly valuable in terms of how they help the entire system function as a whole. As discussed in Chapter 2, careful planning helps ensure that the pieces fit together and are linked with the overall strategic goals of the organization. This philosophy is reflected in the mission statement of Saturn Motors, a model organization for HPWS. Saturns mission is to Market vehicles developed and manufactured in the United
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States that are world leaders . . . through the integration of people, technology, and business systems. Figure 16.4 summarizes the internal and external linkages needed to fit high-performance work systems together.
Ensuring Internal Fit

internal fit
The situation in which all the internal elements of the work system complement and reinforce one another
Recall from Chapter 2 that internal fit occurs when all the internal elements of the work system complement and reinforce one another. For example, a first-rate selection system may be of no use if it is not working in conjunction with training and development activities. If a new compensation program elicits and reinforces behaviours that are directly opposed to the goals laid out in performance planning, the two components would be working at cross purposes. This is the true nature of systems. Changes in one component affect all the other components. Because the pieces are interdependent, a new compensation system may have no effect on performance if it is implemented on its own. Horizontal fit means testing to make certain that all of the HR practices, work designs, management processes, and technologies complement one another. The synergy achieved through overlapping work and human resources practices is at the heart of what makes a highperformance system effective.
Figure 16.4
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Achieving Strategic Fit
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HIGH-PERFORMANCE WORK SYSTEMS
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Establishing External Fit

external fit
The situation in which the work system supports the organizations goals and strategies
To achieve external fit, high-performance work systems must support the organizations goals and strategies. This begins with an analysis and discussion of competitive challenges, organizational values, and the concerns of employees and results in a statement of the strategies being pursued by the organization.16 Xerox, for example, uses a planning process known as Managing for Results, which begins with a statement of corporate values and priorities. These values and priorities are the foundation for establishing three-to-five-year goals for the organization. Each business unit establishes annual objectives based on these goals, and the process cascades down through every level of management. Ultimately, each employee within Xerox has a clear line of sight to the values and goals of the organization so he or she can see how individual effort makes a difference.17 Efforts such as this to achieve vertical fit help focus the design of high-performance work systems on strategic priorities. Objectives such as cost containment, quality enhancement, customer service, and speed to market directly influence what is expected of employees and the skills they need to be successful. Terms such as involvement, flexibility, efficiency, problem solving, and teamwork are not just buzzwords. They are translated directly from the strategic requirements of todays organizations. High-performance work systems are designed to link employee initiatives to those strategies.
Assessing Strategic Alignment: The HR Scorecard

In Chapter 2 we introduced the balanced scorecard as a tool that helps managers evaluate the link between strategic goals and operational activities. Professors Brian Becker, Mark Huselid, and Dave Ulrich have adapted that model to create an HR Scorecard that helps managers assess the strategic alignment of their work systems.18 The HR Scorecard can be used to diagnose internal fit and external fit in a relatively straightforward way: First, managers diagnose internal fit by assessing whether particular HR practices reinforce one another or work at cross purposes (see Highlights in HRM 16.1A). Second, managers assess whether the HR practices significantly enable key workforce deliverables such as employment stability and teamwork (see Highlights in HRM 16.1B). Third, the degree of external fit is evaluated by assessing the degree to which the workforce deliverables are connected with key strategic performance drivers (see Highlights in HRM 16.1C). These three assessments are extremely useful not just for deriving measures of internal and external fit of highperformance work systems, but for engaging a broader set of managers and employees in the discussion of how to best implement the system.
Implementing the System

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So far we have talked about the principles, practices, and goals of high-performance work systems. Unfortunately, these design issues compose probably less than half of the challenges that must be met in ensuring system success. Much of what looks good on paper gets messy during implementation. The American Society for Training and Development (ASTD) asked managers and consultants to identify the critical factors
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Highlights in HRM 16.1A Diagnosing Internal Fit

In the following chart, please estimate the degree to which the various HR management subsystems work together harmoniously or fit together. Think of the degree of fit and internal consistency as a continuum from 100 to +100, and assign a value in that range to each relationship. Examples of the extremes and midpoints on that continuum are as follows: 100: 0: +100: DNK: The two subsystems work at cross purposes. The two subsystems have little or no effect on one another. Each subsystem is mutually reinforcing and internally consistent. Dont know or have no opinion.
Recruitment HR and Planning Selection Training and Development Performance Management and Appraisal Compensation Work and Organization Benefits (e.g., Teams) Communication Systems HR Performance Measurement Cost HR planning Recruiting and selection Training and development Performance management and appraisal Compensation and benefits Work organization (e.g., teams) Communication systems HR performance measurement 30 0 0 20 10 0 20 0 30 0 0 0 +30 Value Creation 0 40
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Source: Brian Becker, Mark Huselid, and Dave Ulrich, The HR Scorecard (Cambridge, MA: Harvard University Press, 2001).
that can make or break a high-performance work system. The respondents identified the following actions as necessary for success (see Figure 16.5): Make a compelling case for change linked to the companys business strategy. Ensure that change is owned by senior and line managers. Allocate sufficient resources and support for the change effort. Ensure early and broad communication. Ensure that teams are implemented in a systemic context. Establish methods for measuring the results of change. Ensure continuity of leadership and champions of the initiative.19
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Highlights in HRM 16.1B Testing Alignment of the HR System with HR Deliverables

Please indicate the degree to which the following elements of the HR system facilitate the HR deliverables shown, on a scale of 100 to +100. Examples of the extremes and midpoints on that continuum are as follows: 100: 0: +100: DNK: This dimension is counterproductive for enabling this deliverable. This dimension has little or no effect on this deliverable. This dimension significantly enables this deliverable. Dont know or have no opinion.
HR Planning Employment stability Team-based behaviours Strategy-focused behaviours High-talent staffing level 0 0 0 Recruitment and Selection 0 0 0 Training and Development 0 30 0 Management and Appraisal 0 20 0 Compensation and Benefits 50 40 +40 Work Organization (e.g., Teams) 20 0 0 Communication Systems 0 0 0
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Many of these recommendations are applicable to almost any change initiative, but they are especially important for broad-based change efforts that characterize high-performance work systems. Some of the most critical issues are discussed next.
Building a Business Case for Change

Change can be threatening because it asks people to abandon the old ways of doing things and accept new approaches that, to them at least, are untested. To get initial commitment to high-performance work systems, managers have to build a case that the changes are needed for the success of the organization. In a recent study on the implementation of high-performance work systems, it was found that a member of
Figure 16.5
Implementing High-Performance Work Systems
Build a case for change
Communicate
Involve union
Navigate transition
Evaluation
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Highlights in HRM 16.1C Testing Alignment of HR Deliverables

Please indicate the degree to which each HR deliverable in the chart below would currently enable each strategic driver, on a scale of 100 to +100. Empty cells indicate this is not a key deliverable for a particular driver. Examples of the extremes and midpoints on that continuum are as follows: 100: This deliverable is counterproductive for enabling this driver. 0: This deliverable has little or no effect on this driver. +100: This deliverable significantly enables this driver. DNK: Dont know or have no opinion. HR Deliverable Employment Stability among Senior R&D Staff 1. Shorten product development times 2. Enhance customer focus and responsiveness 3. Enhance productivity 4. Develop and successfully manage joint ventures 10 80 20 10 50 StrategyFocused Performance +30 20 50 40 High-Talent Staffing Level
Team-Based Behaviours 30
top management typically played the role of sponsor/champion and spent a substantial portion of his or her time in that role communicating with employees about the reasons and approaches to change. Major transformation should not be left to middle managers. Rather, the CEO and the senior management team need to establish the context for change and communicate the vision more broadly to the entire organization. For example, executives at Harley-Davidson tried to institute employee involvement groups without first demonstrating their own personal commitment to the program. Not surprisingly, employees were apathetic and in some cases referred to the proposed changes as just another fine program put in place by the personnel department. Harley-Davidson executives learned the hard way that commitment from the top is essential in order to establish mutual trust between employees and managers. Similarly, the CEO of a business-consulting company was adamant that his 24 vice-presidents understand a new initiative and give a short speech at an introductory session. On the day of the programs launch, however, the CEO himself did not show up. The message to the vice-presidents was clear: The CEO didnt think the change was important enough to become an active participant. Not surprisingly, the change was never implemented.20 One of the best ways to communicate business needs is to show employees where the business is todayits current performance and capabilities. Then show them where the organization needs to be in the future. The gap between today and the future
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represents a starting point for discussion. When executives at TRW wanted to make a case for change to high-performance work systems, they used employee attitude surveys and data on turnover costs. The data provided enough ammunition to get conversation going about needed changes and sparked some suggestions about how they could be implemented. Highlights in HRM 16.2 shows what happened when BMW bought British Land Rover and began making changes without first talking through the business concerns. Ironically, in this case, BMW unwittingly dismantled an effective high-performance work system. Now that Ford owns the company, will things work differently?
Establishing a Communications Plan

The ASTD council on high-performance work systems noted that providing an inadequate communication system is the most frequent mistake companies make during implementation. While we have emphasized the importance of executive commitment, top-down communication is not enough. Two-way communication not only can result in better decisions, it may help to diminish the fears and concerns of employees. For example, Solectron Corporation, winner of the Baldrige National Quality Award, tried to implement high-performance work systems to capitalize on the knowledge and experience of its employees. A pilot program showed immediate gains in productivity of almost 20 percent after the switch to self-managed teams and team-based compensation. Although Solectrons rapid growth of more than 50 percent per year made it unlikely that middle managers would be laid off, many of them resisted the change to a high-performance work system. They resented the loss of status and control that accompanied the use of empowered teams. If Solectron managers had participated in discussions about operational and financial aspects of the business, they might not have felt so threatened by the change. Open exchange and communication at an early stage pay off later as the system unfolds. Ongoing dialogue at all levels helps reaffirm commitment, answer questions that come up, and identify areas for improvement throughout implementation. Recall that one of the principles of high-performance work systems is sharing information. This principle is instrumental to success both during implementation and once the system is in place.
Involving the Union

We mentioned in Chapter 14 that autocratic styles of management and confrontational approaches to labour negotiations are being challenged by more enlightened approaches that promote cooperation and collaboration. Given the sometimes radical changes involved in implementing high-performance work systems, it makes good sense to involve union members early and to keep them as close partners in the design and implementation process. Figure 16.6 shows how to build a bridge toward a cooperative relationship with unions in implementing high-performance work systems.21
Cultivating Mutual Gains

In order to establish an alliance, managers and labour representatives should try to create winwin situations, in which all parties gain from the implementation of high-performance work systems. In such cases, organizations such as Shell and
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Highlights in HRM 16.2 Land Rover, BMW, and Ford Crash Head-On
Some years ago, the British Land Rover Company, a leading manufacturer of four-wheel-drive vehicles, found itself saddled with a notorious reputation for poor quality and productivity. Then it underwent a fundamental transformation. The company instituted extensive training (including giving every employee a personal training fund to be used on any subject), implemented more team-based production methods, reduced the number of separate job classifications, developed more cooperative relations with organized labour, and began a total quality program. As a result of these changes, productivity soared by 25 percent, quality action teams netted savings worth millions of dollars, and the quality of products climbed. Operating in a very competitive environment, Land Rover produced and sold one-third more vehicles. On the basis of these changes, the company was certified as an Investors in PeopleU.K. designee. This national standard recognizes organizations that place the involvement and development of people at the heart of their business strategy. So far, so good. Then BMW bought the company. In spite of massive evidence documenting the effectiveness of the new management methods and changed culture, BMW began to dictate changes within a manner of months. Unfortunately, the changes undid the cultural transformation. Land Rover never fully recovered under the new management. After losing more than $6 billion, BMW sold off the company. Land Rover was later purchased by Ford Motor Company. Ford bought Land Rover and put it under one roof with Volvo, Jaguar, and Aston Martin to create the Premier Auto Group. Ford has continued to manufacture the Land Rover in England while improving its quality, but this hasnt been enough to turn Land Rover around. In 2003, Land Rover finished near the bottom of the J.D. Power Initial Quality Study, 36th out of 37 brands, and the division has been showing losses. Land Rovers 8000-strong workforce in Solihull, England, has been put on notice by group chairman Mark Fields that it needs to alter its culture and working practices to match those embraced by Ford. In the Ford production system, teams of workers are supposed to take charge of and improve quality in their areas. Fields wants the Solihull plant to operate like a nearby Jaguar plant in Halewood, England, which formerly built Ford Escorts. The Halewood plant had been notorious for militancy, work stoppages, absenteeism, and quality problems. Halewood later became Fords top factory after a decision was made to transform into a Jaguar factory, and a sweeping series of cultural, productivity and working practice changes were put into place. Weve taken a very positive set of first steps but theres a lot of pavement in front of us, said Fields about Land Rover.
Sources: Jeffrey Pfeffer, When It Comes to Best PracticesWhy Do Smart Organizations Occasionally Do Dumb Things? Reprinted from Organizational Dynamics, Summer 1996 with permission from Elsevier; Cordelia Brabbs, Rovers White Knight, Marketing (May 18, 2000): 28; Georg Auer, Burela to Instill Quality Culture at Land Rover, Automotive News 75, no. 5902 (November 6, 2000): 32x32z; Ronald W. Pant, Land Rover History Lesson, Truck Trend 8, no. 3 (MayJune 2005): 12; Bradford Wernle, Solihull Must Do a Halewood to Survive; Jaguar Plant Is the Example Land Rover Factory Must Follow, Automotive News Europe 9, no. 19 (September 20, 2004): 39.
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Figure 16.6
Building Cooperation with Unions
Values
Interests
Goals
MANAGERS
Cultivate mutual gains Establish formal commitment Foster support of constituents Adhere to procedures
UNION
Source: The Conference Board of Canada
Weyerhaeuser have found that interest-based (integrative) negotiation rather than positional bargaining leads to better relationships and outcomes with union representatives. Trust is a fragile component of an alliance and is reflected in the degree to which parties are comfortable sharing information and decision making. Manitoba Telecom Services has involved union members in decisions about work practices, and because of this, company managers have been able to build mutual trust and respect with the union. This relationship has matured to a point at which union and company managers now design, select, and implement new technologies together. By working hard to develop trust up front, in either a union or a nonunion setting, it is more likely that each party will understand how high-performance work systems will benefit everyone; the organization will be more competitive, employees will have a higher quality of work life, and unions will have a stronger role in representing employees.22
Establishing Formal Commitment

Most labourmanagement alliances are made legitimate through some tangible symbol of commitment. This might include a policy document that spells out union involvement, letters of understanding, clauses in a collective bargaining agreement, or the establishment of joint forums with explicit mandates. MacMillan Bloedel, a Canadian wood products company now owned by Weyerhaeuser, formed a joint operations committee of senior management and labour representatives to routinely discuss a wide range of operational issues related to high-performance work systems. These types of formal commitments, with investments of tangible resources, serve two purposes: (1) They are an outward sign of management commitment, and (2) they institutionalize the relationship so that it keeps going even if key project champions leave.23
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USING THE INTERNET
Read recent winners of the Baldrige Award at: www.quality.nist.gov
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Fostering Support of Other Key Constituents

In addition to union leadership, it is critical to have the support of other key constituents. Leaders must ensure that understanding and support are solid at all levels, not just among those in the executive suite. To achieve this commitment, some organizations have decentralized the labour relations function, giving responsibility to local line managers and human resources generalists, to make certain that they are accountable and are committed to nurturing a high-performance work environment. Nortel Networks, for example, formally transferred accountability for labour relations to its plant managers through its collective bargaining agreement with the union. Line managers became members of the Employee Relations Council, which is responsible for local bargaining as well as for grievance hearings that would formerly have been mediated by HR. Apart from the commitment that these changes create, perhaps the most important reason for giving line managers responsibility for employee relations is that it helps them establish a direct working relationship with the union.
Adhering to Procedures
Once processes, agreements, and ground rules are established, they are vital to the integrity of the relationship. As Ruth Wright, manager of the Council for Senior Human Resource Executives, puts it, Procedure is the rug on which alliances stand. Pull it out by making a unilateral management determination or otherwise changing the rules of the game, and the initiative will falter. Procedure keeps the parties focused, and it is an effective means of ensuring that democracy and fairness prevail.24 In most cases, a home-grown process works better than one that is adopted from elsewhere. Each organization has unique circumstances, and parties are more likely to commit to procedures they create and own.
Navigating the Transition to High-Performance Work Systems

Building commitment to high-performance work systems is an ongoing activity. Perhaps, in fact, it is never fully completed. And as in any change activity, performance frequently falters as implementation gets under way. One reason is that pieces of the system are changed incrementally rather than as a total program. Xerox Corporation found that when it implemented teams without also changing the compensation system to support teamwork, it got caught in a bad transition. The teams actually showed poorer performance than did employees working in settings that supported individual contributions. Company executives concluded that they needed to change the entire system at once, because piecemeal changes were actually detrimental. The other mistake organizations often make is to focus on either top-down change driven by executives or bottom-up change cultivated by the employees. In reality, firms such as Champion International, now a part of International Paper, and ASDA, a low-cost British retailer, are among the many companies that have found that the best results occur when managers and employees work together. The top-down approach communicates manager support and clarity, while the bottom-up approach ensures employee acceptance and commitment.25
Building a Transition Structure

Implementation of high-performance work systems proceeds in different ways for different organizations. In organizational start-ups, managers have the advantage of being able to put everything in place at once. However, when organizations have to be
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retrofitted, the process may occur a bit more clumsily. When Honeywell switched to high-performance work systems, employees attended training programs and participated in the redesign of their jobs while the plant was shut down to be re-equipped with new technology. When the new plant was reopened, self-managing teams were put in place and a new pay system was implemented for the high-performance workforce.26 Not every organization has the luxury of suspending operations while changes are put in place. Nevertheless, establishing an implementation structure keeps everyone on track and prevents the system from bogging down. The structure provides a timetable and process for mapping key business processes, redesigning work, and training employees.
Incorporating the HR Function as a Valuable Partner

One of the mistakes that organizations can make in implementing high-performance work systems is allocating too few resources to the effort. This means money, of course, but it also means time and expertise. Although line managers typically own the responsibility for implementation, HR managers can be invaluable partners in leading the charge for and managing change. Because change is difficult, HR managers need to understand what employees in transition are going through and help them handle it. When the old ways of doing things are abandoned, many experienced employees begin to feel like beginners again on the job. This can be stressful and sometimes polarize employees. As a coping mechanism, many are likely to fall back on older routines. Texas Instruments created its High Performance Organization Development unit to facilitate the transition to a high-performance work system. Other organizations such as Merck, Ford, and Deutsche Bank have also developed special HR units to manage organizational change. Unilever created a transition team of senior line and HR managers to oversee the implementation of high-performance teams and develop an implementation road map.27
Evaluating the Success of the System

process audit
Determining whether the high-performance work system has been implemented as designed
Once high-performance work systems are in place, they need to be monitored and evaluated over time. Several aspects of the review process should be addressed. First, there should be a process audit to determine whether the system has been implemented as it was designed and whether the principles of high-performance work systems are being reinforced. Questions such as the following might be included in the audit: Are employees actually working together, or is the term team just a label? Are employees getting the information they need to make empowered decisions? Are training programs developing the knowledge and skills employees need? Are employees being rewarded for good performance and useful suggestions? Are employees treated fairly so that power differences are minimal? Second, the evaluation process should focus on the goals of high-performance work systems. To determine whether the program is succeeding, managers should look at such issues as the following: Are desired behaviours being exhibited on the job? Are quality, productivity, flexibility, and customer service objectives being met? Are quality-of-life goals being achieved for employees? Is the organization more competitive than in the past?
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Finally, high-performance work systems should be periodically evaluated in terms of new organizational priorities and initiatives. Because high-performance work systems are built on key business processes that deliver value to customers, as these processes and customer relationships change so too should the work system. The advantage of high-performance work systems is that they are flexible and, therefore, more easily adapted. When change occurs, it should be guided by a clear understanding of the business needs and exhibit a close vertical fit to strategy.
Outcomes of High-Performance Work Systems

objective
Organizations achieve a wide variety of outcomes from high-performance work systems and effective human resources management. We have categorized these outcomes in terms of either employee concerns such as quality-of-work-life issues and job security or competitive challenges such as performance, productivity, and profitability. Throughout the text we have emphasized that the best organizations find ways to achieve a balance between these two sets of outcomes and pursue activities that improve both.
Employee Outcomes and Quality of Work Life

There are a myriad of potential benefits to employees from high-performance work systems. In high-performing workplaces, employees have the latitude to decide how to achieve their goals. In a learning environment, people can take risks, generate new ideas, and make mistakes, which in turn lead to new products, services, and markets. Because employees are more involved in their work, they are likely to be more satisfied and find that their needs for growth are more fully met. Because they are more informed and empowered, they are likely to feel that they have a fuller role to play in the organization and that their opinions and expertise are valued more. This of course underlies greater commitment. With higher skills and greater potential for contribution, they are likely to have more job security as well as be more marketable to other organizations. Additionally, as we discussed in Chapter 1, individuals with degrees are a growing segment of the workforce. If employees with advanced education are to achieve their potential, they must be allowed to utilize their skills and abilities in ways that contribute to organizational success while fulfilling personal job growth and work satisfaction needs. High-performance work systems serve to mesh organizational objectives with employee contributions. Conversely, when employees are underutilized, organizations operate at less than full performance, while employees develop poor work attitudes and habits.28
Organizational Outcomes and Competitive Advantage

Several organizational outcomes also result from using high-performance work systems. These include higher productivity, lower costs, better responsiveness to customers, greater flexibility, and higher profitability. Highlights in HRM 16.3 provides a sample of the success stories that American companies have shared about their use of high-performance work systems.29
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Highlights in HRM 16.3 The Impact of High-Performance Work Systems

Ames Rubber Corporation, a New Jersey-based manufacturer of rubber products and office machine components, experienced a 48-percent increase in productivity and five straight years of revenue growth. Sales at Connor Manufacturing Services, a San Francisco firm, grew by 21 percent, while new orders rose 34 percent and the companys profit on operations increased 21 percent to a record level. Over a seven-year period, Granite Rock, a construction material and mining company in Watsonville, California, experienced an 88-percent increase in market share, its standard for on-time delivery grew from 68 to 95 percent, and revenue per employee was 30 percent above the national average. At One Valley Bank of Clarksburg, West Virginia, employee turnover dropped by 48 percent, productivity increased by 24 percent, return on equity grew 72 percent, and profits jumped by 109 percent in three years. The Tennessee Eastman Division of the Eastman Chemical Company experienced an increase in productivity of nearly 70 percent, and 75 percent of its customers ranked it as the top chemical company in customer satisfaction. A study by John Paul MacDuffie of 62 automobile plants showed that those implementing high-performance work systems had 47 percent better quality and 43 percent better productivity. A study by Jeff Arthur of 30 steel minimills showed a 34-percent increase in productivity, 63 percent less scrap, and 57 percent less turnover. A study by Mark Huselid of 962 firms in multiple industries showed that high-performance work systems resulted in an annual increase in profits of more than $3,800 per employee.
Source: Martha A. Gephart and Mark E. Van Buren, The Power of High Performance Work Systems, Training & Development 50, no. 10 (October 1996): 2136.
Recall that in Chapter 2 we said that organizations can create a sustainable competitive advantage through people if they focus on four criteria. They must develop competencies in their employees that have the following qualities: Valuable: High-performance work systems increase value by establishing ways to increase efficiency, decrease costs, improve processes, and provide something unique to customers. Rare: High-performance work systems help organizations develop and harness skills, knowledge, and abilities that are not equally available to all organizations. Difficult to imitate: High-performance work systems are designed around team processes and capabilities that cannot be transported, duplicated, or copied by rival firms. Organized: High-performance work systems combine the talents of employees and rapidly deploy them in new assignments with maximum flexibility.30
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These criteria clearly show how high-performance work systems in particular, and human resources management in general, are instrumental in achieving competitive advantage through people. However, for all their potential, implementing high-performance work systems is not an easy task. The systems are complex and require a good deal of close partnering among executives, line managers, HR professionals, union representatives, and employees. Ironically, this very complexity leads to competitive advantage. Because high-performance work systems are difficult to implement, successful organizations are difficult to copy. The ability to integrate business and employee concerns is indeed rare, and doing it in a way that adds value to customers is especially noteworthy. Organizations such as Wal-Mart, Microsoft, and Southwest Airlines have been able to do it, and as a result they enjoy a competitive advantage.
High-Performance Work Systems and the Small and Medium-Sized Employer

objective
We conclude our discussion of high-performance work systems by noting their applicability to small and medium-sized organizations. While many of the examples used to illustrate the popularity of HPWSs come from large, well-known companies, the philosophies, principles, and techniques that underlie HPWSs are equally appropriate to the management of enterprises of all sizes. It would be wrong to think that the four principles of HPWSs identified by Lawler (sharing information with employees, linking pay to performance, training and developing employees, and fostering an egalitarian work culture) are somehow unique to Fortune 1000 organizations. Nor would it be correct to surmise that the anatomy of HPWSs is applicable only to large corporations. Progressive organizations of all sizes have successfully implemented team-based work systems, implemented staffing practices that select high-quality employees, developed training programs that continually update employee skills, and utilized compensation practices that support specific organizational goals. The key is that they have done these things in a coordinated, integrative manner. These smaller organizations have simply achieved a system approach to organizational design that combines HR practices, work structures, and processes that effectively utilize employee competencies. Readers of this text will find the principles of HPWSs of great assistance as they manage human resources, regardless of organizational size.
SUMMAR Y
objective
High-performance work systems are specific combinations of HR practices, work structures, and processes that maximize employee knowledge, skill, commitment, and flexibility. They are based on contemporary principles of high-involvement organizations. These principles include shared information, knowledge development, performancereward linkages, and egalitarianism.
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High-performance work systems are composed of several interrelated components. Typically, the system begins with designing empowered work teams to carry out key business processes. Team members are selected and trained in technical, problem-solving, and interpersonal skills. To align the interests of employees with those of the organization, reward systems are connected to
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The pieces of the system are important only in terms of how they help the entire system function. When all the pieces support and complement one another, high-performance work systems achieve internal fit. When the system is aligned with the competitive priorities of the organization as a whole, it achieves external fit as well.
objective
Implementing high-performance work systems represents a multidimensional change initiative. High-performance work systems are much more likely to go smoothly if a business case is first made. Top-management support is critical, and so too is the support of union representatives and other important constituents. HR representatives are
objective
KEY TERMS
external fit, 16-12 high-performance work system (HPWS), 16-2 internal fit, 16-11 process audit, 16-20
DISCUSSION QUESTIONS
1. Do you think the four principles of high involvement provide an adequate context for designing high-performance work systems? What other concerns or guidelines for developing highperformance work systems would you suggest? 2. In many cases, organizations use teams as a part of their high-performance work systems. Could such systems be useful in organizations that do not use teams? What special concerns might you have to address? 3. Although both internal and external fit are important concerns with high-performance work systems, which do you consider more critical and why? 4. This chapter places considerable emphasis on the processes involved in implementing highperformance work systems. What are the most critical steps to successful implementation? 5. How do you think employee-related outcomes and organizational outcomes are related to one another? Is it possible to achieve one set of outcomes without the other? Why or why not? 6. What concerns must a smaller employer address in trying to implement high-performance work systems? What advantages would a smaller organization have in using such systems?
objective
objective
performance and often have group and organizational incentives. Skill-based pay is regularly used to increase flexibility and salaried pay plans are used to enhance an egalitarian environment. Leadership tends to be shared among team members, and information technology is used to ensure that employees have the information they need to make timely and productive decisions.
often helpful in establishing a transition structure to help the implementation progress through its various stages. Once the system is in place, it should be evaluated in terms of its processes, outcomes, and ongoing fit with strategic objectives of the organization. When implemented effectively, highperformance work systems benefit both the employees and the organization. Employees have more involvement in the organization, experience growth and satisfaction, and become more valuable as contributors. The organization also benefits from high productivity, quality, flexibility, and customer satisfaction. These features together can provide an organization with a sustainable competitive advantage. The principles of HPWS apply in small and medium-sized organizational work settings as well as in large organizations. Progressive organizations of all sizes have successfully implemented high-performance work systems.
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INTERNET EXERCISE
The principle of employee involvement is critical to the success of HPWS. As a purchaser of this text, you have online access to Canadian HR Reporter. Go to the article on Employee Engagement, in Vol 18, Issue 15, September 12, 2005, and starting on page 7, read about the five companies described in this article. Compare and contrast the ways in which these organizations involve and empower their employees.
HRM Experience Assessing the Strategic Fit of High-Performance Work Systems

High-performance work systems (HPWSs) are potentially powerful tools for managing employee commitment, involvement, and excellence. However, ensuring that all of the HR practices support one anotherand the principles underlying the HPWSis not always easy. At times, certain HR practices may support the HPWS while others actually may work against the principles. But if all the HR practices are not aligned, the system may be doomed. It takes only one misaligned practice to crash the whole system. Recall that the HPWS principles include the following: Shared information Knowledge development Performancereward linkage Egalitarianism
Assignment The figure on the following page lists the main HR practices used at Egan Clothiers, Ltd. Working in teams of four to six, assess the extent to which you believe each HR practice supports (or works against) each of the HPWS principles. 1. For each cell in the matrix, insert a number indicating the extent to which you believe the HR practice supports the principle or is counterproductive. The scale runs from 5 (strongly counterproductive) to 5 (very supportive). Zero indicates neither support nor detriment. 2. When you are done filling in each cell, add the numbers across each row to determine how supportive each HR practice is of all of the principles. Which HR practice is most supportive of the HPWS principles? Which HR practice is of most concern? 3. Add each column to see how the overall set of HR practices supports each principle. Which principle is most strongly supported? Which principle is the biggest concern? 4. Add the rows and/or columns to see how well the HPWS is supported overall. What changes would you recommend to improve the system?
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EGAN CLOTHIERS, LTD.

HPWS PRINCIPLES
STRUCTURE
Cross-functional team Department rotation Shared Information Egalitarianism Knowledge Performance Development Reward Linkage Row Row 1 2
STAFFING
HR PRACTICES
Select for experience Promote from within
Row Row
3 4
TRAINING
Retail selling skills Customer service Row Row 5 6
REWARDS
Results appraisal Forced distribution Individual incentives Row Row Row 7 8 9
TECHNOLOGY
HR Info System Post performance Row 10 Row 11
SCORING KEY
5 = strongly supports the principle 0 = neutral
Column 1
Column 2
Column 3
Column 4
TOTAL
BIZFLIX EXERCISES
Apollo 13: Houston, We Have a Problem

This chapter discussed some principles that underlie highperformance work systems. Watch for these principles in action while viewing this scene from the film Apollo 13. This superb film dramatically shows a NASA mission to the moon that had an in-space disaster. Innovative problem solving and decision making amid massive ambiguity saved the crew. Apollo 13 shows many examples of problem solving and decision making throughout the film. The zero-gravity simulator, a KC-135 fourengine jet aircraft (NASAs Vomit Comet), helped create the films realistic weightless scenes. These scenes required 600 parabolic loops over ten days of filming. The chosen scene is an edited version of the Houston, We Have a Problem . . . sequence that appears a third of the way into the film. It starts as Jim Lovell (Tom Hanks) says, Houston, we have a problem. This scene ends after Lovell tells Mission Control that they are venting something into space. The film continues with frenzied activity in Mission Control. Flight Director Gene Krantz (Ed Harris) asks people to work the problem and stop guessing about it.
What to Watch for and Ask Yourself
Which principles of high-performance work systems appear in this scene? Note some examples from the scene of the principles you identify. You also can refer to Figure 16.2 while viewing the scene. The chapter earlier noted that training and development is a human resource practice that is important for highperformance work systems. What type of training do you believe the astronauts receive? Does it appear effective for them to carry out their mission? Why or why not? Jim Lovell is the commander of the Apollo 13 mission. During this scene, does he show the management and leadership characteristics discussed earlier in the chapter?
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case study
HPWS Transforms Nevada Plant into One in a Million
In the world of beverage plants, this milestone at Ocean Sprays Henderson, Nevada, plant is virtually unheard of1 million operating hours without a lost-time accident. This is an accomplishment that very few in our industry ever achieve, says Mike Stamatakos, vice-president of operations for Ocean Spray. A plants safety record is a reflection of how well it is run. This milestone is an indication that Henderson does mostif not everythingwell. The fact that Ocean Spray Henderson is one of the safest beverage plants around is no accident. The plants impressive operations milestone is the result of a twoand-a-half-year effort to improve safety awareness, uptime, and overall operations. When the plant was built in 1994 to serve Ocean Spray customers west of the Rockies, Ocean Spray had a vision to create a high-performance work system. The goal was to have an educated and involved workforce that would raise the bar in terms of plant performance and operations. As part of that effort, in 2001 Henderson managers began a dedicated environmental health and safety (EHS) program. An early step in the process was bringing in an occupational therapist to perform a job safety analysis on the plant. The EHS program ranges from formal computer-based trainingrequired of every employeeto fun promotions designed to get employees engaged with the safety message. The Ocean Spray Henderson plant staff is divided into four teams and each is measured on just how well it performs. A bulletin board posts each teams days without a recordable accident. A real-time scoreboard on the plant floor provides workers a streaming update of the plants vital performance statistics. The idea is that an informed worker is a stronger team member. The plant operates on a just-in-time delivery and shipment schedule that helps keep things running on time and within budget. Reaching the 1-million-hour milestone was a 25-year journey.Its not just a case of the people in the front office talking the talk. It is the people on the floor and everyone in the facility walking the walk, says Jim Colmey, a safety specialist at the plant.
QUESTIONS
1. What are the key aspects of Ocean Sprays high-performance work system? 2. Do you think the system achieves both internal and external fit? 3. What other HR practices might the company consider implementing?
Source: Condensed from Andrea Foote, One in a Million: Ocean Spray Henderson Has Parlayed Hard Work and Dedication into a Remarkable Operations Milestone, Beverage World 122, no. 8 (August 15, 2003): 2229.
case study
HPWS at Xerox Corporation
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One of the largest companies in the United States to implement high-performance work systems is the Xerox Corporation. The company employs 58 100 people worldwide. Its revenues in 2004 were $15.7 billion. As a result of a total quality management mandate that improving quality is every employees job, Xerox introduced its
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version of empowered teams, what it called family groups. These family groups became the cornerstone for high-performance work systems throughout the companys service organization around the globe. Xerox service managers realized that they could improve productivity if responsibility for decision making moved closer to the point of customer contact. As empowered work groups evolved, the company began to realize that the groups could not function effectively unless other aspects of the company changed as well. Employees complained that they were evaluated and rewarded as individuals despite being organized as teams. Team members were not receiving the kind of information they needed to make decisions. This led Xerox to consider the entire system in which teams operated. And thus high-performance systems were born. Perhaps the best example of a transition to HPWS is the Ohio Customer Business Unit (CBU), based in Columbus, Ohio. High-performance work systems were not introduced overnight, but through an incremental process that has taken nearly ten years. The first few steps were timid ones, consisting primarily of training in team dynamics and facilitation skills. Next, Xerox realized the importance of analyzing and reengineering work processes. All of the primary processes such as reliability, parts planning, and team facilitation were analyzed and documented. In each work group, process owners were identified and each team member took on a different role. As process owners, team members had decision-making responsibility and accountability for such day-to-day decisions as work scheduling and for larger decisions such as hiring and performance reviews. The new responsibilities created some problems. Work-group members were expected to make decisions, but they often lacked relevant information. In response, Xerox created a management information system to track and summarize key business indicators. Most of the business information is updated monthly. Some information, such as expense reports, is updated weekly. The system also provides teams with indicators of customer satisfaction levels several times a month. At each team meeting, members share information about the companys business plan and its financial performance. The communication system wasnt the only thing that had to be modified to support high-performance work systems. Teams had to be tied together by common objectives and incentives. They had to be compensated in a way that fostered collaboration between team members and motivated them to work toward team goals. As a result, Xerox moved to a pay-for-performance compensation system called Workgroup Excellence, which rewards the performance of a team as a whole. Then, within each team, rewards are distributed on the basis of such factors as experience. Some managers struggled with the new work systems. To increase their understanding, some were sent to Xeroxs service operation in Phoenix, Arizona, which had also been experimenting with empowered teams. There they learned that the key to managerial support for work groups was to have managers structured into the work groups themselves. Only after experiencing team dynamics and acquiring the skills to work in teams were the managers able to address the needs of the teams they oversaw. The Ohio CBU became the top service organization within Xerox, with customer satisfaction levels around 94 percent on service calls. It also has the lowest maintenance expenses per vehicle of any service unit within Xerox. Evidence of success for other high-performance work systems at Xerox is easy to find. Service organizations reported increases in all their target areas. Customer satisfaction increased by as much as ten points, with each point representing millions of dollars of business. Employee satisfaction improved 15 percent. Increases of 10 to 15 percent in response time and reliability occurred as well.
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QUESTIONS
1. If you were a manager at Xerox, what concerns would you have with the way the
company initially implemented high-performance work systems?

2. What role did information technology play in supporting high-performance
work systems?
3. Why do you suppose some Xerox managers resisted the new systems?
Source: Martha A. Gephart and Mark E. Van Buren, The Power of High Performance Work Systems, Training & Development 50, no. 10 (October 1996): 2136; Julie Demers, Service Drives a New Xerox Program, CMA Management 76 no. 3 (May 2002): 3639.
case study
Iamss Pet Project
Iams Pet Food Company holds quarterly communication meetings with its employees at all of its 11 major facilities worldwide and has been doing so since 1985even after being acquired by Procter & Gamble in 2000. Several members of the leadership team, including the owner and the president, have attended every one of these meetings. This method of communication helped pump the companys growth. In 1985, Iams had about $50 million in sales, with a couple of hundred employees in three major locations. At the end of 2004, its sales were over $1.6 billion, and the company had thousands of employees worldwide. In 1985, Iamss HR Department performed its first employee attitude survey. The overall scores on the 21-question survey were very good. But one statement on the survey had a very low score, which caught the attention of the ownership and the leadership team. The statement was: We do not get enough information about how well our work group and company are doing. Employees were telling management that they felt left out of the picture as the company was growing. Something was not right when it came to communication. This was a wake-up call to the ownership and leadership team because the company philosophy was built around Culture, Customers, Products, and People (CCPP). Because top management truly believed in this philosophy, they felt it was critical to improve the overall communication process in the company. Management decided they needed to report information to the employees as if they were shareholders, even though Iams was a privately held company. The leadership team also knew that if they did not take action to improve communication, a third party might be needed to represent Iams employees in communications with Iams management. This could put even more distance between management and employees and further complicate the open communication process management envisioned. The process they finally settled on was to hold informationsharing Quarterly Meetings as if their employees were indeed shareholders.
HOW IT WORKS
How does this Quarterly Meetings communication process work? Iams employee quarterly meetings are held four times a year at the home office, R&D, the plants, and key international locations. Senior managers travel to each location and share business results, as well as other pertinent information (future plans, products, strategies,
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and so on). The leadership at each of the companys locations also shares local results. This is done in a group setting with all employees attending the meeting. The importance of real two-way communication became clear when this process became a platform for all types of improvements. First, this forum allows all employees to become active shareholders as they receive up-to-date key company results. This is important, because each employee is on a bonus incentive plan tied into sales, profit, and ROI. The forum also allows for open dialogue between the employee audience and senior management after the presentations are completed. The meetings allow a great amount of information to be passed along in a timely manner and add to team speed. Even though quarterly all-employee meetings would seem to take away from team speed and production, they really have enhanced both.
BUILDING TRUST
Another important aspect of the quarterly meetings is the trust that develops between employees and management. The meetings are characterized by total openness, acceptance of criticism, demand for feedback, a nonthreatening atmosphere, and honest responses to open-ended questions, without prefabricated answers. This type of atmosphere creates a learning process for all participants in the meetings. The Trust Factor is a personal growth issue for everyone. For instance, a unique feature at every meeting is the president or a senior vice-president speaking directly to new employees in front of all employees about the companys vision, values, and strategies as a welcome to the company. This sets the tone for the whole meeting and encourages employee trust and participation. The secret of success is in an honest, plainly worded presentation of facts, placing all the cards on the table. Sharing important company information and organizational performance results with the entire company community shows a genuine concern from leadership. Finally, holding these meetings on a regular basis is critical to building trust. As a result, all team members now hold themselves publicly accountable for what they say they are going to do. When this happens, trust comes alive. More and more positive performances start to happen within the organization. Through this process, expectations of high performance for every member of the organization (including the leaders) are communicated. It is a two-way street: The leadership looks for feedback and ideas from every level of the company and employees are kept well-informed, focused on company goals, and motivated to follow through. Confidence and trust are continually established between the leadership and the members because they truly understand one another and have the opportunity to talk to each other. Through this process the leadership of the company keeps everyone focused on the vision, mission, strategies, and goals of the organization. Because this is done every quarter, major changes, missed directions, and communication issues can quickly be corrected and action taken to get back on course.
ADMINISTRATION
Holding company-wide meetings is always a challenge. Deciding where to hold them and the best time of the week to hold them is tricky. The Iams Company uses local high school auditoriums and community centres as well as its own meeting rooms at remote locations. The best days of the week for Iams are Thursday, Friday, or Monday; the meetings are spread out over a three-week period to reach the various
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locations. Human Resources orchestrates the agenda, the mechanics, and the delivery. At the end of the program, all local and home office leadership stands in front of the audience to answer questions. If a member of the leadership team does not know an answer, he or she is charged with finding the answer, getting back to the individual questioner, and posting it for everyone to see. This shows that the leadership can be trusted to follow through and respond to employeesthat they care about and respect their employees.
THE RESULTS
So what does this communication process do for the company? First, it provides direction to the entire company team. It provides the answers to what is being done, where the company is going, and how it will get there. Second, it provides definition. It helps everyone understand why certain actions are being taken, certain products made, certain methods used. It helps establish the importance of everyones job in the overall scheme of things. It sets the definitions for quality and productivity. It responds to individual and group concerns about company social and administrative programs. Most important, it explains why we are doing the things we do. Third, it is about drive. It provides for the spirit of togetherness. It makes the vision, values, and strategies of the company come alive to everyone. It keeps the team focused and moving forward toward the common goal. Finally, this forum is an opportunity for senior management to develop their leadership skills. Having location, division, or department heads stand before those they lead and provide current performance updates and answer questions develops their leadership abilities. Answering why and how, clarifying issues that might be starting to fester, handling questions without threatening the individualthese are some of the critical elements company leadership must master. Iamss management gets plenty of opportunities to demonstrate courage, passion, integrity, and empathy.
THE COST
This type of program requires a great deal of effort and cost: shutting down part or all of an office or plant operation for three to four hours once a quarter, the time and travel of presenters, and IT and audiovisual support. Is this type of human resource strategic effort worth the cost and effort involved? Each company or organization will have to make that determination, depending on its size and number of locations. For Iams, the benefits are real and this forum supports the concepts of performance management and management performance.
HR CATALYST
HR leadership can be the strategic catalyst to move this type of organizational communication forward. Creativity needs to come forward no matter what the size of the organization to make this two-way communication process become a reality. Communication technology (such as videoconferencing) is readily available to support the effort. But never forget the power of face-to-face contact and the importance of top managements willingness to be there to answer the organizations questions. Current business events continue to point toward the need for establishing trust.
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PART 6
QUESTIONS
1. What aspects (principles, practices, and so on) of high-performance work
systems are represented at Iams?

2. If you were a consultant to this company, what recommendations would you
make to enhance the system?

3. Does anything concern you about what Iams is doing? Why or why not?
Source: John Meyer, Strategic Communication Enhances Organizational Performance. Reprinted with permission from Human Resource Planning 25, no. 2 (2002): 79. Copyright 2002 by The Human Resource Planning Society, 317 Madison Avenue, Suite 1509, New York, NY 10017, Phone: (212) 4906387, Fax: (212) 6826851. See also The Fast 50: Peak Performers, Fast Company (March 2005): 52.
NOTES AND REFERENCES

1. D. A. Nadler and M. S. Gerstein, Designing High-Performance Work Systems: Organizing People, Work, Technology, and Information, Organizational Architecture (San Francisco: Jossey-Bass, 1992): 195208; E. Lawler III, Susan Albers Mohrman, and Gerald E. Ledford, Creating High Performance Organizations: Practices and Results of Employee Involvement and Total Quality Management in Fortune 1000 Companies (San Francisco: Jossey-Bass, 1995); Edward Lawler III, Susan Albers Mohrman, and George Benson, Organizing for High Performance: Employee Involvement, TQM, Reengineering, and Knowledge Management in the Fortune 1000: The CEO Report (San Francisco: Jossey-Bass, 2001). See also David Nadler, Michael Tushman, and Mark Nadler, Competing by Design: The Power of Organizational Architecture (New York: Oxford University Press, 1997); Cameron Allan and Ken Lovell, The Effects of High Performance Work Systems on Employees in Aged Care, Labour & Industry 13, no. 3 (April 2003): 117. Carlton P. McNamara, Making Human Capital Productive, Business and Economic Review 46, no. 1 (OctoberDecember 1999): 1013; Meagan Stovel and Nick Bontis, Voluntary Turnover: Knowledge ManagementFriend or Foe? Journal of Intellectual Capital 3, no. 3 (2002): 30322. Employee Engagement Canadian HR Reporter, 18, no. 15 (September 12, 2005): 7. Martin Eppler and Oliver Sukowski, Managing Team Knowledge: Core Processes, Tools and Enabling Factors, European Management Journal 18, no. 3 (June 2000): 33441; Andrea Foote, One in a Million: Ocean Spray Henderson Has Parlayed Hard Work and Dedication into a Remarkable Operations Milestone, Beverage World 122, no. 8 (August 15, 2003): 2229. Anil Gupta and Vijay Govindarajan, Knowledge Managements Social Dimension: Lessons from Nucor Steel, Sloan Management Review 42, no. 1 (Fall 2000): 7180; Patricia Panchack, Putting Employees First Pays Off, Industry Week 251, no. 5 (June 2002): 14; Donna Berry, Commitment to Culture: Old Home Foods Invests in Technology and Intellectual Capital, Dairy Foods 104, no. 4 (April 2003): 32. 6. This section is based on several studies related to best practices in human resources management and the development of highperformance work systems. See Arup Varma, Richard W. Beatty, Craig Eric Schneier, and David O. Ulrich, High Performance Work Systems: Exciting Discovery or Passing Fad? Human Resource Planning 22, no. 1 (1999): 2637; J. B. Arthur, Effects of Human Resource Systems on Manufacturing Performance and Turnover, Academy of Management Journal 37 (1994): 67087; M. Huselid, The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance, Academy of Management Journal 38 (1995): 63572; P. Osterman, How Common Is Workplace Transformation and Who Adopts It? Industrial and Labor Relations Review 47, no. 2 (1994): 17388; Craig Olson and Casey Ichniowski, What Works at Work: Overview and Assessment, Industrial Relations 35, no. 3 (1996): 299333; Mark A. Youndt, Scott A. Snell, James W. Dean, Jr., and David P. Lepak, Human Resource Management, Manufacturing Strategy, and Firm Performance, Academy of Management Journal 39, no. 4 (August 1996): 83666; John F. Tomer, Understanding High-Performance Work Systems: The Joint Contribution of Economics and Human Resource Management, The Journal of Socio-Economics 30, no. 1 (January 2001): 63. Jeffrey Kling, High Performance Work Systems and Firm Performance, Monthly Labor Review, May 1995, 2936. See also Chad Kaydo, Top of the Charts: FedEx, Sales and Marketing Management 150, no. 7 (July 1998): 46, 48; Michael Trachtman, Roving Internet Appliances, Web Techniques 6, no. 10 (October 2001): 5557; Richard Shulman, Just Say the Word, Supermarket Business 56, no. 6 (June 15, 2001): 1920; Customer Service Excellence: Continuously Delighting Your Customers, PR Newswire (February 24, 2005). For more information about designing teams around critical work processes, see Mark Chen, Applying the High Performance Work Team to EPC, AACE International Transactions (2002): PM61PM67; Valerie Sessa, Supporting Work Team Effectiveness: Best Management Practices for
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7.
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9.
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11.
12.
13.
14.
Fostering High Performance, Personnel Psychology 53, no. 2 (Summer 2000): 45760. See Lawler, Mohrman, and Ledford, Creating High Performance Organizations; Eileen Appelbaum, Thomas Bailey, Peter Berg, and Narne Kalleberg, Manufacturing Advantage: Why HighPerformance Work Systems Pay Off (Ithaca, NY: Cornell University Press, 2000); Gil Preuss and Brenda Lautsch, The Effect of Formal versus Informal Job Security on Employee Involvement Programs, Relations Industrielles 57, no. 3 (Summer 2002): 51739; Wendy S. Becker, Manufacturing Advantage: Why High-Performance Work Systems Pay Off, Personnel Psychology 56, no. 2 (Summer 2003): 54953; Nike Factories to Get Help from MITs Sloan School, InformationWeek (April 13, 2005). Laurie J. Bassi and Mark E. Van Buren, Sustaining High Performance in Bad Times, Training & Development 51, no. 6 (June 1997): 3242; Katie Thomas, Short-Term Downsizing, Long-Term Performance, Incentive 171, no. 4 (April 1997): 14; Nik Theodore and Rachel Weber, Changing Work Organization in Small Manufacturers: Challenges for Economic Development, Economic Development Quarterly 15, no. 4 (November 2001): 36779. Cristina Gibson and Mary Zellmer-Bruhn, Metaphors and Meaning: An Intercultural Analysis of the Concept of Teamwork, Administrative Science Quarterly 46, no. 2 (June 2001): 274303; Diane Bailey, Modeling Work Group Effectiveness in High-Technology Manufacturing Environments, IIE Transactions 32, no. 4 (April 2000): 36168; Mark E. Van Buren and Jon M. Werner, High Performance Work Systems, B&E Review (OctoberDecember 1996): 1523; Schindler Elevator Announces Center for Service Excellence; Holland, OH Facility to Serve as National Support Center, PR Newswire (July 21, 2004); Large Organizations That Focus on Excellence in Human Capital Management May Be More Likely to Outperform the Market, According to Taleo Customer Study, PR Newswire (March 30, 2005). Rosemary Batt and Lisa Moynihan, The Viability of Alternative Call Centre Production Models, Human Resource Management Journal 12, no. 4 (2002): 14. For more information on the potential application of intracapital, see Gifford Pinchot, Free Intraprise, Executive Excellence 18, no. 1 (January 2001): 10. David Paper, James Rodger, and Parag Pendharker, A BPR Case Study at Honeywell, Business Process Management Journal 7, no. 2 (2001): 8593. See also Robert McNabb and Keith Whitfield, Job Evaluation and High Performance Work Practices: Compatible or Conflictual? Journal of Management Studies 38, no. 2 (March 2001): 293312; Leslie A. Weatherly, Performance Management: Getting It Right from the Start, HRMagazine 49, no. 3 (March 2004): S1S11. Warren Bennis, The Future Has No Shelf Life, Executive Excellence 17, no. 8 (August 2000): 56; Peggy Holman, Culture Change, Executive Excellence 17, no. 7 (July 2000): 16; Clinton Longenecker, Building High Performance Management Teams, Industrial Management 43, no. 6 (November/December 2001): 2126; Wendy S. Becker, Manufacturing Advantage:
15.
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Why High-Performance Work Systems Pay Off, Personnel Psychology 56, no. 2 (Summer 2003): 549. Keith Newton, The High Performance Workplace: HR-Based Management Innovations in Canada, International Journal of Technology Management 16, no. 13 (1998): 17792; Georg Von Krogh, Kazuo Ichijo, and Ikujiro Nonaka, Enabling Knowledge Creation: How to Unlock the Mystery of Tacit Knowledge and Release the Power of Innovation (New York: Oxford University Press, 2000); Lawler, Mohrman, and Benson, Organizing for High Performance. Patrick M. Wright and Scott A. Snell, Toward a Unifying Framework for Exploring Fit and Flexibility in Strategic Human Resource Management, Academy of Management Review 23, no. 4 (October 1998): 75672; Clair Brown and Michael Reich, MicroMacro Linkages in High-Performance Employment Systems, Organization Studies 18, no. 5 (1997): 76581; S. A. Snell, M. Shadur, and P. M. Wright, Human Resources Strategy: The Era of Our Ways, in M. A. Hitt, R. E. Freeman, and J. S. Harrison (eds.), Handbook of Strategic Management (London: Blackwell, 2002), 62749. Van Buren and Werner, High Performance Work Systems, 1523; Gilbert Probst, Steffen Raub, and Kai Romhardt, Managing KnowledgeBuilding Blocks for Success (New York: Wiley, 2000). For a similar example of vertical fit within European firms, see Sue Hutchinson, John Purcell, and Nick Kinnie, Evolving High Commitment Management and the Experience of the RAC Call Center, Human Resource Management Journal 10, no. 1 (2000): 6378. Brian Becker, Mark Huselid, and Dave Ulrich, The HR Scorecard: Linking People, Strategy, and Performance (Cambridge, MA: Harvard Business School Press, 2001). Varma, Beatty, Schneier, and Ulrich, High Performance Work Systems, 2637; Gephart and Van Buren, Power of High Performance Work Systems, Training & Development 50, no. 10 (October 1996): 2136; Foote, One in a Million: Ocean Spray Henderson, 2229. Varma, Beatty, Schneier, and Ulrich, High Performance Work Systems, 2637; Gephart and Van Buren, Power of High Performance Work Systems; Making Change Workfor Real, HRFocus 80, no. 1 (January 2003): S1. Louise Clarke and Larry Haiven, Workplace Change and Continuous Bargaining, Relations Industrielles 54, no. 1 (Winter 1999): 16891; Ruth Wright, Forging Sustainable Alliances in a New Economy, Canadian Business Review (Summer 1995): 2024. Clarke and Haiven, Workplace Change, 16891; Wright, Forging Sustainable Alliances, 2024; Joel CuthcerGershenfeld, Thomas Kochan, and John Calhoun Wells, In Whose Interest? A First Look at National Survey Data on Interest-Based Bargaining in Labor Relations, Industrial Relations 40, no. 1 (January 2001): 121. Wright, Forging Sustainable Alliances, 2024; Hannele Rubin, How CEOs Get Results, Chief Executive (February 2001): 8. Wright, Forging Sustainable Alliances, 2024. Gephart and Van Buren, Power of High Performance Work Systems; Michael Beer, How to Develop an Organization
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Capable of Sustained High Performance: Embrace the Drive for Results-Capability Development Paradox, Organizational Dynamics 29, no. 4 (Spring 2001): 23347. Neal and Tromley, From Incremental Change to Retrofit, The Academy of Management Executive 9, no. 1 (February 1995): 4254. Nicolay A. M. Worren, Keith Ruddle, and Karl Moore, From Organizational Development to Change Management: The Emergence of a New Profession, Journal of Applied Behavioral Science 35, no. 3 (September 1999): 27386; Randa A. Wilbur, Making Changes the Right Way, Workforce, Supplement (March 1999): 1213; Gephart and Van Buren, Power of High Performance Work Systems; Irena St. John-Brooks, CEOs See HR as Helping to Lead Organizational Efforts: USA, Benefits & Compensation International 32, no. 1 (July/August 2002): 7374; Human Resources Role Transformed at Deutsche Bank, Human Resource Management International Digest 10, no. 5 (2002): 1214; Michael Svoboda and Silke Schroder, Transforming Human Resources in the New Economy: Developing the Next Generation of Global HR Managers at Deutsche Bank AG, Human Resource Management 40, no. 3 (Fall 2001): 26173; HR Advice: Manage TransitionNot Just Change, HR Briefing (November 15, 2002): 12; HR Must Seize Major Role over Change Management, Personnel Today (May 20, 2003): 8. Berg, The Effects of High Performance Work Practices; Peter Cappelli and Nikolai Rogovsky, Employee Involvement and Organizational Citizenship: Implications for Labor Law Reform
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and Lean Production, Industrial & Labor Relations Review 51, no. 4 (July 1998): 63353; D. J. Storey, Education, Training and Development Policies and Practices in Medium-Sized Companies in the UK: Do They Really Influence Firm Performance? Omega 30, no. 4 (August 2002): 24964; Paul Osterman, Work Reorganization in an Era of Restructuring: Trends in Diffusion and Effects on Employee Welfare, Industrial & Labor Relations Review 53, no. 2 (January 2000): 17996; How to Take the Non out of Your Non-Performers Human Resource Department Management Report (February 2005): 15. Robert J. Vandenberg, Hettie A. Richardson, and Lorrina J. Eastman, The Impact of High Involvement Work Processes on Organizational Effectiveness: A Second-Order Latent Variable Approach, Group & Organization Management 24, no. 3 (September 1999): 30039; Jeffrey Pfeffer and John F. Veiga, Putting People First for Organizational Success, Academy of Management Executive 13, no. 2 (May 1999): 3748; Laurie J. Bassi and Mark E. Van Buren, The 1999 ASTD State of the Industry Report, Training & Development, Supplement (1999): 126. John Purcell, Best Practice and Best Fit: Chimera or Cul-de-Sac? Human Resource Management Journal 9, no. 3 (1999): 2641; Snell, Shadur, and Wright, Human Resources Strategy: The Era of Our Ways, 627649; Patrick M. Wright, Benjamin Dunford, and Scott A. Snell, Human Resources and the Resource-Based View of the Firm, Journal of Management 27, no. 6 (2001): 70121.
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chapter

Creating HighPerformance Work Systems

Discuss the underlying principles of high-performance work systems.

Recommend processes for implementing high-performance work systems.

Identify the components that make up a high-performance work system.

Discuss the outcomes for both employees and the organization.

Describe how the components fit together and support strategy.

Expanding Human Resources Management Horizons

Expanding Human Resources Management Horizons

Creating High-Performance Work Systems

Developing High-Performance Work Systems

OUTCOMES Organizational Employee

The Principle of Shared Information

Expanding Human Resources Management Horizons

Underlying Principles of High-Performance Work Systems

Performance Reward Linkage

Creating High-Performance Work Systems

The Principle of Knowledge Development

The Principle of PerformanceReward Linkage

Expanding Human Resources Management Horizons

USING THE INTERNET

The Principle of Egalitarianism

Anatomy of High-Performance Work Systems

Creating High-Performance Work Systems

Work-Flow Design and Teamwork

Anatomy of High-Performance Work Systems

Shared Information Work flow

Expanding Human Resources Management Horizons

Complementary Human Resources Policies and Practices

Training and Development

Creating High-Performance Work Systems

Management Processes and Leadership

Expanding Human Resources Management Horizons

Supportive Information Technologies

Fitting It All Together

Creating High-Performance Work Systems

Ensuring Internal Fit

Achieving Strategic Fit

Comp e Challe titi ng

HIGH-PERFORMANCE WORK SYSTEMS

INTERNAL FIT Technologies Leadership

Expanding Human Resources Management Horizons

Establishing External Fit

Assessing Strategic Alignment: The HR Scorecard

Implementing the System

Creating High-Performance Work Systems

Highlights in HRM 16.1A Diagnosing Internal Fit

Expanding Human Resources Management Horizons

Highlights in HRM 16.1B Testing Alignment of the HR System with HR Deliverables

Building a Business Case for Change

Implementing High-Performance Work Systems

Build a case for change

Creating High-Performance Work Systems

Highlights in HRM 16.1C Testing Alignment of HR Deliverables

Expanding Human Resources Management Horizons

Establishing a Communications Plan

Involving the Union

Cultivating Mutual Gains

Creating High-Performance Work Systems

Expanding Human Resources Management Horizons

Building Cooperation with Unions

Source: The Conference Board of Canada

Establishing Formal Commitment