Ch. 6: High performance work systems (guest lecture)

This guest lecture covers Chapter 6 of the book: high performance work systems (HPWS). It starts with the film Modern Times (Charlie Chaplin, 1936), which shows the worker as a cog in the machine of mass production, and then traces how thinking about 'high performance' developed through four systems approaches in the 20th century, how HRM emerged in the 1980s, and how the AMO model and the high-involvement framework of Boxall and Macky (2009) explain the link between HR practices and performance.

1. Definition of a high performance work system

Defining characteristics:

• Bundle or cluster of HR practices: an internal fit between the individual HR practices into a coherent and consistent HR system leads to a higher performance than the sum of the individual HR practices (synergy: 1 + 1 = 3).
• Employee abilities in terms of knowledge and skills.
• Employee motivation through an incentive system.
• Employee opportunity to participate in decision making.

2. Four systems approaches in the 20th century

Each approach has its own portrayal of mankind (view of human nature) and therefore its own idea of what a high performance organization (HPO) looks like.

Note: job enlargement is adding more tasks at the same level (horizontal), job enrichment is adding responsibility and control, such as planning and checking one's own work (vertical).

3. The 1970s and 1980s: HRM 'a star is born'

In the 1970s and 1980s, Western companies (US and Europe) came under threat: globalization and increased competition, with Asian companies (e.g., Toyota and Nissan) offering higher quality at lower costs. Western firms responded by focusing on the upper market (high-tech and knowledge-intensive) (Legge, 1995/2005). This increased the relevance and importance of human resources: employees became a source of competitive advantage.

HRM focused on: recruiting good employees; developing employees (skills and knowledge); paying employees according to their performance; involving employees in decision making; and evaluating employees to achieve organizational goals. The aim: creating a high-performance culture through commitment rather than control.

4. The AMO model

Boxall and Purcell (2003, p. 20) phrase it as: people perform well when:

• they are able to do so (they can do the job because they possess the necessary knowledge and skills);
• they have the motivation to do so (they will do the job because they want to and are adequately incentivised);
• their work environment provides the necessary support and avenues for expression, the opportunity (e.g., functioning technology and the opportunity to be heard when problems occur).

Often written as Performance = f(A, M, O): if one of the three is missing, performance suffers (a highly skilled and motivated employee without opportunity cannot perform).

5. High-involvement work systems: Boxall and Macky (2009)

Boxall and Macky (2009) developed an integrative research framework (Figure 6.3):

1. High-involvement HR system: work practices (specific changes to types and levels of employee involvement, e.g., teams, rotation, autonomy) and employment practices (company changes to recruitment and development practices and to participation and performance incentives, e.g., selection, training, compensation, appraisal).
2. Related management actions/investments (interacting with the HR system): production technologies in use, degree of product innovation, management of managers of the workforce group, quality of financial resourcing, etc.
3. Work and employment processes experienced by the workforce group: degree of involvement/empowerment and of work intensification; perceived changes in intrinsic and extrinsic rewards; quality of skill enhancement, knowledge development, intra- and intergroup collaboration and interpersonal communication.
4. Employee affective outcomes: trust levels (in management, in peers), job and need satisfaction, organizational commitment.
5. Operating outcomes: cost-effectiveness assessed through relevant work outputs in relation to unit labour costs; labour turnover and absenteeism.

Lessons:

• Distinguish work practices (how work is organized: teams, rotation, autonomy) from employment practices (how people are managed: selection, training, compensation, appraisal).
• There are two paths: a cognitive path (direct: better skills, knowledge and collaboration directly improve operating outcomes) and a motivational path (indirect: via employee affective outcomes such as trust, satisfaction and commitment).
• HRM is embedded in the organizational context, in particular related management actions and investments (technology, innovation, financial resources). HRM alone is not enough.
• The framework includes work intensification: high involvement can also mean working harder, which links to the critical view of Chapter 5.

6. The six main HPWPs in the book

Boselie and Van der Heijden (2024) discuss six main high performance work practices, each in its own chapter:

1. Selective recruitment and selection (Chapter 7)
2. Performance management (Chapter 8)
3. Compensation (Chapter 9)
4. Career development (Chapter 10)
5. Talent management (Chapter 11)
6. Employee participation (Chapter 12)

7. Case: Metalik Creations

A company makes metal sculptures from scrap metal and needs to increase production while maintaining quality. Two teams are measured differently:

Analysis: Team B is likely to achieve the best outcomes by the end of the year. Its measures focus on quality and the final goal (good sculptures), and it combines several mutually reinforcing HPWPs: performance management with clear goals and feedback (bulletin board, regular sessions), and an incentive system aligned with the goal (pay for good-quality output). This is internal fit. Team A rewards speed and quantity of individual inputs (who collects most scrap), which can lead to competition, low-quality material and sculptures that do not meet quality standards: the incentives are not aligned with the goal of production with quality. The case shows that HR practices must be linked to each other and to the strategic goal.

Take-home message

Developments in the 20th century show that managing human resources to improve organizational performance, through a sophisticated bundle of well-integrated HR practices, is a complex and nuanced field of study and a challenge for (HR) managers. There is no consensus about a 'one size fits all' approach.