Research Paper on "What Are the Fundamental Principles of High Performance Work Systems?"

Research Paper 10 pages (2717 words) Sources: 7

[EXCERPT] . . . .

High Performance Work Systems

The most valuable and mercurial asset any enterprise has is the knowledge, insight and intelligence of its employees including the immense amount of tacit and implicit knowledge each has gained over decades of experience. A high performance work system (HPWS) seeks to synchronize the many work structures, systems, processes, implementation decisions and frameworks around a common series of strategic priorities and initiatives (Boxall, 2012). Galvanizing together the many components of a HPWS are the Human Resource Management (HRM) systems, both manual and automated, in addition to the most critical areas of governance that serve as a stabilizing force in organizational cultures (Wood, de Menezes, 2011). Making these many components stay synchronized and focused on a series of strategic objectives is difficult, and made even more challenging when industry and market turbulence is introduced (Preuss, 2003). An HPWS must be agile enough then to react to the turbulence in economic terms yet stable enough to provide a foundation for cross-cultural growth and profitable operations of an enterprise (Mittal, 2011). Any architectural framework then for an HPWS must have elements necessary to ensure a very high degree of agility and shared value creation from the standpoint of collaboration and communication (Boxall, 2012). It must also be designed to enable a very high degree of shared information and knowledge development, as the best-performing HPWS systems are actually knowledge-sharing ecosystems (Hartog, Verburg, 2004). With all of these aspects of an HPWS needing to stay in synchronization as the people, processes, systems, external competitive environment and internal culture of a company change, anchoring these systems in core principles is critical to their stability, scalability and long-term value in any enterprise (Varma, Beatty, Schneier, Ulrich, 1999). It is the intent of this paper to analyze the fundamental principles that have proven invaluable in keeping HPWS agile in turbulent times. These for principles include shared information, knowledge development, performance-reward linkage, and egalitarianism (Varma, Beatty, Schneier, Ulrich, 1999).

Defining High Performance Work Systems (HPWS)

The highest-performing organizational cultures have the ability to quickly assimilate the most relevant tacit and implicit knowledge throughout their enterprises, infusing intelligence and insight that would have decades otherwise to accrue (Birasnav, Rangnekar, Dalpati, 2011). It is this nature of knowledge acquisition and accrual that separates the highest-performing enterprises that have committed to relying on HPWS platforms and processes. By definition an HPWS is a combination of HR systems, processes and procedures that are inclusive of work structures aimed at making the most of employee commitment, knowledge, flexibility, and skill. Transformational leadership is the catalyst of growth and continued performance gains within HPWS platforms and systems. The ability of a leader to unify the diverse elements of any complex, enterprise-wide human resources-based system takes emotional intelligence (EI) and insight into how best to apply their transformational leadership skills so continued progress is made (Felfe, & Schyns, 2004).

Best practices in developing, implementing and orchestrating HPWS is predicated on creating a culture of continual learning and knowledge generation, in addition to ownership of outcomes and the attainment of goals (Hartog, Verburg, 2004). That is what makes an HPWS framework so unique; it centers on transforming the knowledge, both tacit and implicit, throughout an organization the center of its competitive strength. The highest-performing enterprises that have standardized on HPWS frameworks and frameworks also concentrate on creating systems, processes and procedures that can ensure an extremely high level of data quality over time (Preuss, 2003). The differentiating factor in the performance of an exceptional organization is not only in its alacrity of velocity in aggregating, transforming and repurposing tacit and implicit knowledge; it is also in the creation of unique competitive advantage by making knowledge the greater competitive differentiator an enterprise has (Varma, Beatty, Schneier, Ulrich, 1999).

A second best practice of a highly effective HPWS is the ability to create an architecture that supports linkages to strategy through system design integration points in workflows, HRM practices and supporting technologies (Preuss, 2003). This is a critical area of overall HPWS performance as the system design components must also be managed at a transformational leadership level in order for challenging, often long-term and highly collaborative goals and objectives to be achieved. Integration points to strategies and the principles of high involvement (driven by transformational leadership) create the necessary catalysts for continually improving system design processes that drive the implementation process of a HPWS. The ecosystem that begins to emerge from this structure then could be visualized as two strategic driving factors, which are the linkages to strategies on the one hand, and the principles of high achievement on the other, both serving as the foundational element of system design (McCalman, Buchanan, 1990). The implementation process of HPWS is critically important for unifying these three other components, orchestrating them for higher performance over the long-term (Mittal, 2011). Only by having a very strong transformational leader can an organization continually unify and create value through the HPWS ecosystem (Fitzgerald, Schutte, 2010). A further corollary is that HPWS frameworks should never be designed around information technologies first; they should be modeled to the specific goals and objectives of the enterprise first, taking into account the innate knowledge and intelligence resident within the business and being generated by it (Varma, Beatty, Schneier, Ulrich, 1999). A worst practice of HPWS is when cross-functional teams become too enamored with the core technologies that promise much in the way of collaboration, yet take thousands of hours and dollars to implement successfully. It is a far better practice to begin with the workflows, processes and HRM practices that act as the governance framework, galvanizing all aspects of the system together first (Wood, de Menezes, 2011). Governance, not technology, is the galvanizing force that unifies every aspect of an effective HPWS. It is also the most critical area that can help to keep an HPWS focused on rapidly changing goals based on changes in market conditions. With HRM policies and processes being the galvanizing aspects of governance, transformational leadership is the fuel or catalyst that propels any effective HPWS into motion (Felfe, & Schyns, 2004). All of these elements of an effective HPWS must be also firmly based on four fundamental principles of HPWS design, implementation, use and optimization. These four fundamental principles are defined in the next section of this analysis.

Analysis of the Fundamental Principles of High Performance Work Systems

The four fundamental principles of HPWS are Shared Information, Knowledge Development, Performance-Reward Linkage, and Egalitarianism (Preuss, 2003). Each of these four fundamental principles of HPWS is unified by HRM processes, procedures and governance frameworks to galvanize all to the common objective of attaining strategic goals and objectives. Each of these four principles are analyzed across the planning, implementation and management aspects of compensation (which impacts each of these four principles), leadership, staffing, technologies, training and components of workflows.

The Principle of Shared Information

At their most strategic, an effective HPWS platform or framework becomes the single most effective knowledge capture and knowledge-sharing ecosystem permeating the value chain of an enterprise (Boxall, 2012). This first principle is defined by the intensive requirements of integration across each of the six core functional areas of an enterprise. Shared information is the catalyst of collaboration and the acceleration of knowledge and intelligence throughout an enterprise (McCalman, Buchanan, 1990). The ability to create a higher level of trust and shared accountability for performance is attained if this principle is managed well with a very high degree of transparency and authenticity, which are the foundational elements of transformational leadership (Fitzgerald, Schutte, 2010).

Shared Information is often the most critical success factor in any HPWS framework, despite the perception that performance-reward linkage is more potent in driving organizational change (Hartog, Verburg, 2004). There are many factors that contribute to Shared Information being more critical to the performance of an HPWS than performance-reward yet the most significant is the fact that transformational leaders have the ability to infuse shared ownership over and above short-term rewards (Birasnav, Rangnekar, Dalpati, 2011). This is why the role of transformational leaders is so critically important in any HPWS implementation. An effective leader will be able to infuse a very high level of autonomy, mastery and purpose into the tasks surrounding this principle of Shared Information as well (Birasnav, Rangnekar, Dalpati, 2011). Autonomy, mastery and purpose are one of the cornerstones of effective transformational leadership and lead to long-term motivation on the part of employees, making the chance to attain mastery more motivating than any temporary reward or incentive. The role of Performance-Reward Linkage is that of serving as the basis of transactional leadership coupled with transformational focus on strategic goals and objectives (Felfe, & Schyns, 2004). Shared Information is also defined by the team-based decision making, training investment in cross-training and problem solving, and focus on gain sharing and profit sharing. The most critical aspects of the Shared Information Principle however are the leadership aspects of coaching and striving to keep a very thin organizational structure to ensure goal attainment (Fitzgerald,… READ MORE

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