Learning Objectives
- Outline the basic structure of a high performance work system
- Describe the impact of high performance work systems on the organization
What is a high-performance work system
A high performance work system is an iterative process of aligning the human resource functions to the strategic goals of the organization. This requires substantial effort from management to overcome the administrative function that HR has traditionally assumed, in a way that human resources becomes a “group of separate but interconnected practices designed to enhance employees’ skills and effort.” It is important to note that a HPWS is not synonymous with the oft-mentioned High Performance Organization (HPO). HPO describes the entire organization while HPWS refers to the processes levered within the HR function of the organization.
Integration of HR into the strategic thinking of the organization requires attention to HRM philosophies, policies, training programs, administrative practices, and processes. These general areas focus on how HR creates value in compensation and incentives, recruiting and selection, dissemination of information, performance appraisals, and training focused on role specific and organization-wide skill development.
For an organization to transform their business operation into a HPWS, the intrinsic value of their employees must be foremost. They must therefore, be leveraged as a true competitive advantage, and not viewed as a cost center that drains organization resources. HPWS foster the growth of intellectual capital by allowing employees to contribute their creativity, tacit knowledge, and ability to adapt to external market conditions. As such, three conditions must be established as progression towards this ends. First, employees must have knowledge that managers do not. Second, employees must be motivated to engage their environment in applying these skill sets. Finally, the organizational strategy must rely on and utilize the discretionary use of these skill sets of employees. This requires decentralization of hierarchy that expands employees’ job depth, and allows for learning to take place at all levels of the organization. At its core, HPWS maximizes workplace specialization and takes advantage of the unique expertise each employee has gained from consistent performance in their role.
Primarily, the purpose of HPWS is to create a sustainable competitive advantage in the marketplace. The treatment of employees in such a way has a direct impact on how customers are treated and can create real value for a company. The competitive advantage of a HPWS can be sustained over a long period of time if the execution is difficult for competitors to imitate. For this to happen, the implementation and development of a HPWS must take place over a stretch of time that allows for members to learn from mistakes and improve as they go. This organic transition into HPWS means that competitors cannot simply replicate the process, it m