Chapter 16 Creating and maintaining high-performance organizations

1. Chapter 16 Creating and maintaining high-performance organizations Fundamentals of human resource management 5theditionBy R.A. Noe, J.R. Hollenbeck, B. Gerhart, and P.M. Wright

2. Need to Know • High-performance work systems and their elements and outcomes. • Conditions that create a high-performance work system. • How HRM can contribute to high performance. • Role of HRM technology in high-performance work systems. • Ways to measure the effectiveness of HRM.

3. High-Performance Work Systems • High-performance work system – right combination of people, technology, and organizational structure that makes full use of the organization’s resources and opportunities in achieving its goals. • Each of these elements must fit well with the others in a smoothly functioning whole.

4. Figure 16.1: Elements of a High-Performance Work System

5. 5 Elements of a High-PerformanceWork System • Organizational structure:way organization groups its people into useful divisions, departments, and reporting relationships. • Task design: determines how details of the organization’s necessary activities will be grouped, whether into jobs or team responsibilities. • People: well suited and well prepared for their jobs. • Reward systems: encourages people to strive for objectives that support organization’s overall goals. • Information systems: enables sharing information widely.

6. In a high-performance work system, all the elements – people, technology, and organizational structure – work together for success. 16-6

7. Outcomes of a High-PerformanceWork System Outcomes of a high-performance work system include: • higher productivity and efficiency that contribute to higher profits • high product quality • great customer satisfaction • low employee turnover

8. Figure 16.2: Outcomes of a High-Performance Work System

9. Outcomes of a High-PerformanceWork System • Outcomes of each employee and work group contribute to the system’s overall high performance. • Organization’s individuals and groups work efficiently, provide high-quality goods and services, etc., and contribute to meeting the organization’s goals. • When the organization adds or changes goals, people are flexible and make changes to as needed to meet the new goals.

10. 10 Conditions that Contribute toHigh Performance • Teams perform work. • Employees participate in selection. • Employees receive formal performance feedback and are involved in performance improvement process. • Ongoing training is emphasized and rewarded. • Employees’ rewards and compensation relate to company’s financial performance. • Equipment, work processes and technology encourage maximum flexibility and interaction among employees

11. 10 Conditions that Contribute toHigh Performance • Employees participate in planning changes in equipment, layout, and work methods. • Work design allows employees to use variety of skills. • Employees understand how their jobs contribute to finished product or service. • Ethical behavior is encouraged.

12. Learning Organizations • Learning organization –an organization that supports lifelong learning by enabling all employees to acquire and share knowledge. • Employees have resources for training, and they are encouraged to share their knowledge with colleagues. • Managers take an active role in identifying training needs and encouraging the sharing of ideas.

13. 5 Key Features of Learning Organizations • Continuous learning – each employee’s and each group’s ongoing efforts to gather information and apply the information to their decisions. • Knowledge is shared – one challenge is to shift the focus of training away from teaching skills and toward a broader focus on generating and sharing knowledge. • Critical, systematic thinking– is widespread and occurs when employees are encouraged to see relationships among ideas and think in new ways.

14. 5 Key Features of Learning Organizations • Learning culture – a culture in which learning is rewarded, promoted, and supported by managers and organizational objectives. • Employees are valued – the organization recognizes that employees are the source of its knowledge. It therefore focuses on ensuring the development and well-being of each employee.

15. Passion and occupational intimacy • Passionate people are fully engaged with something so that it becomes part of their sense of who they are. • Feeling this way about one’s work has been called occupational intimacy. • HR has a significant role in creating these conditions

16. Test Your Knowledge Charlotte is a manager overseeing the work of a team. Which of the following behaviors would empower the team the least? • Opening lines of communication between the team and other groups within the organization. • Directing the team and monitoring their day-to-day activities. • Ensure the team has the resources they need. • Keep the team informed as new, relevant information becomes available.

17. Test Your Knowledge • Kamran has worked for the same company for 3 years, is enthusiastic and passionate about his work, hasn’t missed a day in two years, and has several close friends he enjoys working with. Which of the following best describes Kamran? • He is satisfied with his job. • He is empowered. • He is experiencing occupational intimacy. • He is probably going to quit soon.

18. ETHICS Organizational systems can promote ethical behavior, including • a written code of ethics • performance measures that include ethical standards • swift discipline for misdeeds • channels for employees to seek help • training in ethical decision making

19. Table 16.1: HRM Practices that Help Organizations Achieve High Performance

20. Performance Management • Each aspect of performance management should be related to the organization’s goals. • Business goals should influence the: • kinds of employees selected and their training • requirements of each job • measures used for evaluating results • The organization: • identifies what each department must do to achieve the desired results • defines how individual employees should contribute to their department’s goals

21. Figure 16.3: Employee Performance as a Process

22. Performance Management Guidelines to make the performance management system support organizational goals: • Define and measure performance in precise terms. • Link performance measures to meeting customer needs. • Measure and correct for the effect of situational constraints.

23. HRM NEW Technologies • Transaction Processing:Computations and calculations used to review and document HRM decisions and practices, includingdocumenting employee relocation, payroll expenses, and training course enrollments. • Decision Support Systems: Systems designed to help managers solve problems that usually include a "what if" feature. • Expert Systems: Computer systems incorporating decision rules of people deemed to have expertise in a certain area. • Relational Databases: Stores data in separate files that can be linked by common elements.

24. HRM Online: E-HRM • Improving HRM effectiveness through online technology. • Speed requirements of business force HRM managers to explore how to leverage technology for delivery of HRM activities. • With Internet technology, organizations use E-HRM to let all employees help themselves to HR information whenever needed. • E-HRM uses social media applications. • Cloud computing enables access to information that’s delivered on demand from any device 24/7.

25. Measuring HRM Effectiveness

26. Customer-Oriented Perspective of HRM

27. Table 16.3:Key Measures of Success for an HRMAudit

28. Analyzing the Effect of HRM Programs • HR should be able to improve their performance through some combination of greater efficiency and greater effectiveness. • Greater efficiency– HR uses fewer and less-costly resources to perform its functions. • Greater effectiveness– what HR does has a more beneficial effect on employees and the organization’s performance. • HR analytics measure HRM efficiency and effectiveness.

29. Test Your Knowledge • The HR director of a medium-sized corporation spends 90% of his time meeting and working with fellow HR staff. He is primarily concerned with ensuring the company meets all legal requirements with regard to HR activities. This HR director: • Is a major contributor to a high-performance organization • Has a strategic focus • Is concerned with customer satisfaction • Has limited the utility and value he could bring to the organization

30. Summary • A high-performance work system is the right combination of people, technology, and organizational structure that makes full use of the organization’s resources and opportunities in achieving its goals. • A high-performance work system achieves the organization’s goals, typically including growth, productivity, and high profits.

31. Summary • By taking a customer-oriented approach, HRM can improve quality by defining internal customers who use its services and determining whether it is meeting those customers’ needs. • Auditing HRM and measuring HRM effectiveness to analyze specific programs or activities can determine if a program met its objectives and whether it delivered value in an economic sense.