High Performance. Work System And. Organisational. Success. Researchjournali s Journal of Human Resource. Research Scholar, Sardar Vallabhbhai Patel

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1 1 High Performance Work System And Organisational Success P AMUDHA KUMAR Research Scholar, Sardar Vallabhbhai Patel International School of Textile and Management, Peelamedu, Coimbatore, India

2 2 ABSTRACT The concept of Strategic Human Resources management stems from the idea that the top management is strongly convinced that the human capital of their organisation requires very close nurturing and makes them partners in the organisational success. It is for the HR department to identify and mould the individual characteristics of the human capital and align them with the strategic vision and mission of the organisation. This can be achieved if the strategic HR functions are constantly, and vigorously aligned towards total quality management in all fields, which would result in High Performance Work system. The earlier part of this century has seen various experts and researchers synergizing the functions of human resources management with total quality management. TQM which was otherwise considered essentially as a production function has now made inroads into the human resources functions as well. Integration of HRM and TQM functions have consequentially and naturally converged into this sought after terminology of High Performance Work System. Various TQM functions as such have been studied in detail especially from the country where it originated, i.e. Japan. Over the years these TQM function s effectiveness have been observed to be very high in those companies where effective human resource practices were observed to be in place. These practices were found to be aimed at reaching out to each and every employee irrespective of his or her standing in the organisation, so as to ensure a very high sense of commitment level for the organisational success. This requires a very high degree of professionalism and drive to be displayed by the HR department in all aspects of the organisational functioning. That is to say, HR department s knowledge on various line functions of the organisation would be a prerequisite for High Performance Work System in an organisation. The aim of this paper is to integrate the functions of strategic Human Resource Management into line and staff functions for total quality management and link it with High Performance Work Systems that are essential for a highly successful organisation. Keywords: human resource management, high performance work systems, company performance, TQM, strategic HR, 1. INTRODUCTION There has been a paradigm shift in thinking world over on the contribution human resources department makes towards the organisational success. Successful organisations have now bought the idea that investment in human resources development eventually leads to high profits in the long run. Further it is the human resources department that has the wherewithal to handle the intricacies of human needs in their organisation. Companies like PepsiCo, GE etc. have essentially involved the HR department in all the strategic planning meetings as also in their routine administrative meetings. These successful companies have witnessed the transformation that HR has brought in their respective organisations in the form of High Performance Work

3 3 system. Infosys ex chairman Mr. Narayana Murthy had once mentioned in his informal interaction during a function that his capital becomes zero when the last employee retires for the day. Various studies have been conducted to ascertain the involvement and contribution of HR department towards High Performance Work system in organisations. Published research has emphatically proved that effective human resources practices were the root cause for achieving very high employee commitment, total involvement and sense of ownership and belonging to the organisation that has eventually been an important contributor for maintaining sustained competitive advantage in their respective segments. It is therefore imperative to understand the nuances of HPWS and address all related factors to achieve a very high organisational success. 2. HIGH PERFORMANCE WORK SYSTEM A high-performance work system (HPWS) can be termed as a culture in an organisation that synergises the line functions and the staff functions with optimum utilisation of all resources by the human capital. HPWS is termed as a culture as it has to be practiced 24x7 in each and every aspect of the ogranisational functioning for its success. Further the key role towards HPWS is that of the internal customer, i.e., the employees, whose behavioral patterns are individualistic and varied, and therefore requiring the compelling involvement of human resources department to channelize them. Whilst there are many conceptual models of HPWS, from various authors, the crux of this system essentially involves HR management in the strategic role, total quality management (TQM) associated with each and every function of the organisation be it line or staff. In generic terms the component parts of high performance working can be summed as: A vision based on increasing customer value by differentiating an organisation s products or services and moving towards the customisation of its offering to the needs of individual customers Leadership from the top and throughout the organisation is essential to create momentum for HPWS. Decentralisation of decision making is needed at line and staff level, in day to day functioning within their sphere of influence, and contributing to better quality levels without time delays. In the event of decisions beyond sphere of influence, then formation of self help teams by the immediate superiors for quick decision making. Major role is played by the HR in building support systems and culture which include performance operations and people management processes, aligned to organisational objectives to build trust, enthusiasm and commitment to the direction taken by the organisation

4 4 Knowledge needs to be provided to the internal customer on their contribution and importance towards achieving the organisational objective and the impact he or she makes on the external customer vis-à-vis the product or service produced. 3. ROLE OF HR DEPARTMENT The Human Resources department plays a holistic and strategic role in so far as the organisational short and long term goals and objectives are concerned. HR department empowers the human resources with the requisite knowledge, training, and the attitude that is paramount for achieving a HPWS. Strategic human resource management (SHRM) activities are no longer issue and activity based. They are based on the ideologies, thinking process and the attitudes that get converted into very high quality performance at any time and all times. SHRM transforms the system into an ever correcting and continuous learning organisation which keeps striving for quality improvement so as to serve the external customer, who are the raison-d être for their existence and growth. The change in work force attributes happens with the top management commitment in connecting with them wholeheartedly aided with strong and healthy human resource practices. Therefore to achieve a HPWS there is a strong connect with the SHRM and the work force attributes as follows: Firm performance is a function of the employee or workforce attributes right from the time of recruitment till he leaves the organisation. A close association with each employee is made for converting his or her knowledge, skills and attitudes for the ogranisational requirement. This function is aligned with the Total Quality Management aspects in the entire organisation. The HR systems through policies, programs, and practices are designed for each department to achieve high performance work system through total quality management. High-performance work systems stems from the concept of integrating HR and TQM functions. HR requires to clearly understand the various jobs that are required to be performed in any organisation. Further as each job involves TQM methodologies such as 6 sigma, Kaizen, JIT, 5S, SPC, quality teams etc. the job analysis and job description are required to be functions of TQM principles. It is therefore highly imperative that the HR managers and executives are so selected who have the background knowledge of the firm s core competencies. This knowledge combined with the HR professional functionality would be highly instrumental in producing integration of line and staff functions with finesse. The work flow design that includes job description and appropriate staffing to suit best skills, knowledge and attitude is prepared by the HR department. It is for us now to clearly understand the intricacies of the procedures involved in these.

5 5 Components of a High performance work system commences from Job analysis, specification and description based on TQM methodologies, which are flexible for decentralised decision making. This is followed by recruitment and selection designed to identify potential candidates who are quality conscious in their life styles. This will result in total quality / zero defects / right first time recruitment. HR department should utilize scientific methods including psychometric tests for this purpose. On completion of selection, an important phase commences in the form of induction training, wherein the new employee learns about the quality oriented organisational work culture, and his own job expectation in detail. Compensation based on performance and skills form an important part of HPWS that are transparent and fair and encourage employees to contribute optimally. Further the compensation should be competitive in the market, so as to motivate employees to encourage willing participation in the firm s success. HPWS then needs understanding needs of the employees for personal growth in terms of regular training on quality improvement and empowering them with higher skills. Encouraging cohesive team working and fostering cooperation amongst employees has been a vital requirement for quality conscious productivity. HR department should then undertake imparting various enriched human resources practices training for line managers so as to connect with each employee in a meaningful manner. HPWS also envisages habituating high employee involvement, by keeping employees informed of key changes in the organization and taking inputs on organisational functioning regularly. Performance appraisals are designed to get feedback from their immediate superior, i.e. line manager, the next reviewing manager, peers and subordinates assessment, as also all other internal customers with whom professional interaction exists. The crux of performance appraisal should hinge on fairness and transparency. HR department should concentrate on various non financial benefits, which are based on employees needs and requires individualistic assessment. Finally the working conditions should be such that employees entering into to the premises are made to feel they are cared and the organisation is genuinely concerned about them. The various terminologies that are required to understand this topic and the nuances of linkage between them are enumerated below: High Performance Work System No single description brings out all the aspects of a high performance work system, however highly selective recruitment followed by quality training for continuous improvement and career development makes the start point of HPWS. This is followed with flexible job specification, high employee involvement for TQM, self managed teams and decentralised decision making, high quality working environment leading to high motivation levels, committed top management, free and fair communication system. Further HPWS requires

6 6 organisation with quick adaptation to external environment for SWOT analysis, and highly effective external and internal customer interface with impetus on line managers HR functions i.e. integrating line and staff functions for high employee morale. HPWS also advocates attractive and competitive compensation and performance related pay structure, with effective conflict management and problem solving mechanism. Finally HPWS requires total quality management in all facets of operation and administration and with the philosophy of continuous improvement in the form of a learning organization Strategic Human Resources Management Strategic HRM involves planning of human resources needs with that of short term and long term objectives of the firm vis-à-vis its own strength & weakness, with that of external opportunities & threat. This encompasses HR policies, programs, procedures, practices etc. to fulfill the vision, mission and goals of the organisation. Total Quality Management Total quality management is a management philosophy that a company practices which aims to harness the human and material resources of an organization in the most effective way to achieve the objectives of the organization. Various conceptual models have been published in literature, however the design that has been proposed below is an ingenious attempt to explain the concept of high performance work system, that have linkage with strategic planning, strategic HR, various functions of HPWS, TQM and the desired organisational strategic objectives. 4. CONCEPTUAL DESIGN OF HPWS

7 7 Paradigm for HPWS Conceptual Design HR department s strategic role comes to the fore for HPWS. It is of course a challenging task as HR executives can no longer perform the mundane staff functions of HR such as recruiting, selection, compensation, training, appraisal etc. but much more and move towards intricacies of line function. HR executives have to be practicing hard all the HR functions in tandem with the line manager and employees. This culture very much forms a premise of the ingenious conceptual design of HPWS projected in this paper. The conceptual design put forth involves integration of strategic HR policies and total quality management to achieve a High Performance System which shall be discussed in detail below:- Formulation of HR Strategies, Policies, Programs and Procedures Strategic HR provides the firm sustained competitive edge over others in terms of human capital that is paramount for the organisational success. The HR department needs to be involved at the apex decision making process and participate in the SWOT analysis and provide the right manpower for the right job, empower and enrich them to outperform the competitors in all aspects. HR needs to work out the strategies and plan their functions to suit each and every aspect of operations. As HR functions involves cost, a clear perspective plan needs to be put forth to the top management and the expenditures involved at the planning stage for smooth and efficient implementation of operations. The prevalent concept of HR as a cost centre needs to be addressed by the HR department with clear strategic planning and working towards transforming the work force for achieving high quality product or service and in turn contributing towards very high profitability. HR Policies HR policies need to be designed so as to augment the business strategy. This commences from job analysis, specification and description. This needs to be prepared in very close association with respective line managers and the employees involved. Here is where the total quality element comes into picture, and the HR manager needs to clearly combine the TQM conceptuality into job specifications. Subsequent policies on selection, hiring, training, compensation, performance management including appraisal, career development, etc. needs to be very carefully and meticulously drawn out to meet the TQM requirements and long term objectives of the firm. HR Programs HR policies are then put into implementable form by means of various programs such as recruitment, training etc. Programs are also designed so as to educate employees at various stages of their employment commencing from induction to advanced training, as also interaction with internal and external customer. These programs are structured as well as on required basis depending upon feedback. The main intentions of

8 8 these HR programs are to connect with the employees and their families so as to bring in a sense of ownership and belonging to the firm. HR Procedures Success of HR policies and programs depends on how accurately and in detail are these procedures documented and laid down for implementation. Procedures bring out the responsibilities and accountability for successful implementation. Line and Staff work flow integration for HPW culture Operations and administration of any organisation or firm are classified into line and staff functions. Line functions include all aspects of production, manufacturing or servicing. That is to say production units, research & development, marketing, finance departments, etc. forms part of line functions. Staff functions are those of HR department, administrative department etc. that support the line functions. Researchers have brought out the fact that successful companies and organisations have a healthy line and staff integration. HR department has a critical role to play, as they are involved with each and every aspect of employee from recruitment till he or she leaves the company. There is an inescapable need for the HR staff to clearly understand the line function nuances and be sensitive to their problems and issues. HRM practices in line and staff functions for High Performance In the contemporary corporate world, HR is considered to be functioning limited to basic HR activities that involve dealing with external agencies i.e. trade unions, government regulatory bodies, etc. and a few internal functions such as compensation, time management etc. The present day requirement of HR taking a strategic role is slowly but surely settling down in the corporate society. HR has now primarily responsibility for human assets long term projections called human resource planning. However line managers are primarily responsible for basic HR functions limited to day-to-day functions such as employee disciplinary action, coaching, limited performance management, and appraisals. It is a well known fact that HRM activities are specifically the responsibility of HR department. However, as HR deals with entire employees of the organisation these responsibilities also make a part of line manager s job along with their line responsibilities. Line managers have direct control and considerably affect the way employees behave. Therefore, line managers have to take on the responsibilities of HR functions that are essential for managing their employees. Studies have indicated that the immediate loyalty of employees to a large extent goes to their line managers. It is therefore mandatory for the line managers to perform these basic HR functions so as to have a positive impact for high performance:- Identification of individual strengths and weaknesses for consolidation and elimination respectively for high performance.

9 9 Perform functions of coaching, mentoring and tutoring on as required basis. Address individual career development and promotion prospects. Working in close coordination with HR for high standards of working conditions including safety of employees. Fostering working in teams with decentralised decision making. Continuously train employees on TQM philosophies employed and seek improvements in work procedures and products & services. Play a major role in performance appraisal and ensure it to be fair and transparent High Performance Work system practices As brought out earlier various examples of highly successful organisations exists, which have implemented TQM measures to suit their requirement such as Kaizen, JIT, quality circles, 5S, six sigma, SPC, etc. All these techniques relate to high quality product or service, which would fail without the involvement of the employee performing these jobs. It is the men behind the machines who bring about the success and not the machines alone. Therefore the intentions and the mindset of the employee plays a major role in implementation of TQM measures. HR department has a very pivotal role to play to influence the intentions and the mindset, for converting the knowledge, skills and attitude for achieving high performance working. The efforts put in to ensure this has to be continuous, sustained and with a positive intent to connect with the employee. The HPWS practices include those brought out in the definition, which are deliberated in detail below:- Highly selective recruitment Strategic HR s primary role rests in staffing, i.e. selecting the right person for the right job. Studies have indicated that turnovers tend to be high in organisations that have not spent adequate time and resources in recruitment and selection. HR department should use the latest information technology and various psychological methodologies to select the best talent to suit the quality conscious work culture of the organisation. As this subject is out of the purview of this essay, it may be understood that HR needs to focus in detail on selective recruitment to suit the HPWS needs. Quality training for continuous improvement and career development Having selected the best talent to suit the organisational requirement, the next step is to mould him or her to bring out the best for high performance. This involves high quality training that is to be well defined in the HR policies, program and procedures. The training time needs to be minimal, highly effective and with an intention to immediately put the employee into productivity. Various training technologies may be utilized

10 10 from coaching, mentoring, class room lectures, on job training, practical demonstrations etc. to harness the skills of the employee. HR policies need to be carefully chalked out to meet the training needs of the employee. Further a continuous feedback from the line manager is mandatory to augment training based on need for improvement or to push him to the next level based on career development. Flexible job specification Flexible job specification may also be related to multi skilling, i.e., the employees need to be trained on multi skills, that he is able to perform tasks of his co-worker at ease and is able to contribute towards team performances. Many firms productivity have seen a down trend to rely largely on individual employees with vertical specialization. In case of non availability of this employee, the entire productivity is hampered. This can be addressed by designing flexible job specifications and imparting multi skilled training. This also helps the HR department in job rotation, which gets the best out of each employee for quality output. High employee involvement for TQM High employee involvement can only be achieved if the employee is self motivated and convinced that his needs are taken care of, both professional as well as personal. Various HR practices need to be implemented to address both these issues. Higher success rates have been achieved by the organisation, where HR department has specifically attended to individual needs rather than generic initiations. Having won the employee s commitment on high involvement, specific training on TQM would bring in an element that works whole heartedly for bringing in a high performance work system. Self managed teams and decentralised decision making Having put in efforts to churn out individual talents who are committed to high performance, the next step for HPWS is that of creating teams that manage themselves for meeting the organisational objectives. These teams are to be empowered with decision making authorities within their spheres of influence. High quality working environment leading to high motivation levels Studies have been undertaken to assess the impact of working environment on employees motivation levels and related productivity. Organisations with aesthetic working conditions, taking care of employees basic needs on health, hygiene and safety have benefited better than those without these. HR plays an important role here in bringing up the working conditions to a level, where the employee takes pride and is committed for high performance working. Committed top management The entire concept of HPWS is driven by the top down approach. Top management plays a dynamic and vital role in bringing forth and nurturing the high performance culture. Top management conveys the

11 11 organisational priorities in letter and spirit to all functionaries to achieve high performance. Further the top management needs to act as a facilitator and motivator for departmental heads to disseminate TQM and HPWS work culture to the grassroots level. Free and fair communication system A free and open communications system has been considered by researchers worldwide to have a positive impact on any firm s performance. Employees need to be kept informed about the company s performance, profitability, related benefits, future developments etc. with an aim to inculcate participative management. Organisation with quick adaptation to external environment for SWOT analysis Today s competitive and volatile external environment demands organisation to be flexible to changes and carry out SWOT (strength, weaknesses, opportunities and threat) analysis to be the front runner in terms of product or services and meet ever changing public demand. However this can be achieved if a well established system is in place. This system should be ever alert and sensitive to changes in the external environment and suggest changes with strong logical reasoning. The external environment consists of political, legal, technological, economical, sociological, ecological conditions etc. The changes and consequent decisions taken should be communicated to the internal customers i.e. employees. Highly effective external and internal customer interface Organisations such as MMM company in Brazil, boasts of a very effective internal and external customer interaction, wherein employees are required to produce at least one new product every month based on the direct inputs from the external customer. This has proved to be highly effective, and the firm has cashed on the new demands by the customer at the first instance. Encouraging external and internal customer interactions through structured programs help in getting to the roots of demands that exist in the market and high dividends can be reaped if acted upon quickly. Attractive and competitive compensation and performance related pay structure Organisations having one of the most attractive compensation structures in the market may be experiencing low employee turnover. HR department requires preparing the compensation plan catering for the skills, degree of difficulty, responsibilities, knowledge etc. based on job specifications. Basic pay band for each equivalent skill needs to be set, after which performance related factors should be set in terms of qualitative and quantitative output. There is a requirement of keeping the compensation plan as transparent as possible, without any favoritism. The PRP (performance related pay) is to be worked out in conjunction with the line managers, who can quantify and qualify them.

12 12 Effective conflict management and problem solving mechanism Conflict management and problem solving is considered a science as well as an art in itself as it deals with human beings and groups with varying dynamics and backgrounds. HR department needs a time tested and well established mechanism for dealing with conflicts and associated problem solving mechanisms. Root causes of the conflicts or problems need to be assessed and possible solutions projected, with the organisational interest on top. Clear reasoning with logical and objective approach goes a long way in employees posing faith in the system and thereby becoming part of high performance system. Total quality management in all facets of operation and administration TQM s founding fathers and subsequent proponents Deming, Crosby, Juran etc. have put forth various approaches of TQM. In today s competitive world TQM not only is considered an important tool for success, but is required to be adopted for basic survival also. A detailed and deep study of methodologies proposed by these scholars, clearly bring out the human element involved in TQM. Organisations which have implemented TQM as mindsets in employees have better rates of success, than those organisations that use TQM in various processes. The organisational culture should be groomed so as to inculcate TQM principles and methodologies in all facets of the operations and administration. TQM should become a way of life for each and every employee. This culture transforms the employees in the organisation to be customer focus oriented with team work and an attitude of continuous improvement. Teamwork and team spirit as brought out earlier are important pillar stones for TQM success. The learning organization A learning organization may be defined as on that has the capability to continuously change its organisational behaviour and mind set of employees with past experience. Top management should create environments that facilitates in promoting learning and leadership at all levels. Learning organisation develops true distributed leadership in realizing a shared vision, exploring new possibilities by initiatives suiting the strategic objectives. The distributed and empowered leadership then fully engages internal and external stakeholders (suppliers, distributers etc.) by responding to demands of customers. The outcome of a learning organisation is that its employees continuously keep changing their mindset and attitude to change the culture of the organisation to integrate sustainability for competitive advantage. Top management needs to adopt the philosophy that mistakes in the process of experimenting and learning are legitimate steps for attaining success and part of the search for better quality products and services. The processes of quick adaptation to external environment explained earlier are through the processes of learning organisation.

13 13 5. CONCLUSION High Performance Work System is an integrated set of practices that has revolutionized organisations world over towards very high profitability and competitiveness as a market leader. Understanding of high performance work system as a state of mind or work culture, that generates from within each employee and throughout the organisation is the need of the hour. To be competitive, firms quality consciousness and related TQM measures aid in channelizing the efforts. However TQM as a tool may not succeed if it is not driven with a sense of purpose from the employees, thereby reducing the effectiveness of high performance work system. Strategic Human Resources Management arguably plays a significant role in bringing about high performance work system. Present day HR department is transforming itself to play a pivotal role in organisational functioning. This can materialize only if the top management considers HR as a strategic partner and not a cost centre. Meticulous planning and implementation of HR policies, procedures and programs fostering high performance and TQM across the board, is bound to bring a turnaround. This turnaround essentially takes the human aspects into complete confidence and involves them as a strategic business partner. Various HR measures and practices put in place should be directed to connect with the human capital, which would in turn produce quality product, services and related growth for the organisation. Having talked about the specific HR functions related to HPWS and TQM, line managers are considered the nerve centre of operations in organisations. These line managers are pillar stones in so far as implementations of HPWS or TQM measures are concerned. These managers are at significant positions in organisations who have a one to one connect with employees. It is therefore paramount for line managers to be trained on HR functions that have proved to be highly effective in successful organisations. This synergy of HR and line managers functions go a long way in implementation of HPWS and TQM. TQM measures are essentially technology and process oriented, which require careful selection to suit organisational productivity requirements. Having selected the most appropriate set of techniques, training employees to effectively implement them requires HR department s whole hearted involvement. HR department personnel therefore play a vital role, wherein they are expected to involve themselves and understand various processes to act as a facilitator in the strategic role. There is an overwhelming response worldwide that a high performance HR system will significantly contribute towards organisational excellence. For HR department to understand the productivity of HPWS, and organizational excellence generally, they need to go beyond the familiar agent motivation and incorporate into their theoretical frameworks the conception of deep ownership motivation.

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