Lecture 1 complete HPWS

Lecture number 1:Interaction is the only instrument to learn. And this interaction does not essentially

revolves around human –interaction rather this broad concept includes ‘interaction’ with anything that assist human being to change and adapt, either its people, environment, literature (books etc) or technology. Thus one of the major sources of human learning is ‘Socialization’.

This notion should also be understood by the fact that when human knowledge is obtained by various kinds of socialization or interaction, this knowledge is also depending upon the scope of human beings. In other words our knowledge is limited with the scope of our exposure of our surroundings, environment literature and technology etc. for instance a person obtaining knowledge from the source of literature, would be having knowledge limited as per those books and literature that he had gone through.

With the passage of time, our interaction keeps on increasing, so do our exposure and knowledge, all the way in our life, helping us to keep on learning. The way a child get familiarized with his family, then society and later on to the world, his exposure increased his interaction and so do the learning and knowledge increases as well, as illustrated in following diagram:

Therefore, we can conclude that there is no limit to learning but to our knowledge which is limited and has to be improved side by side in all our life. That is why it has been said that “Move around to learn”. This was also the reason that previously sailors were considered wise people, as they were a source of improvement of people’s skills etc. as the purpose of interaction is to expand our exposure with other things and that gives us knowledge through learning.

Till here, we can conclude one thing and that is knowledge and leanring is very essential for human survival as well as success but in this regard there raises another important question that How to establish:

Reality Criteria Standard Truth etc

Because for establishing or defining these, one has to have stable situation etc, which is not the case, as situation is not absolute rather emergent. to clear the point of discussing situation here, we must consider one of the saying that :

“Man is a product of his environment”As through exposure and interactions, a man is exposed to different kinds of :

Behaviors Structures Personalities Factors etc

HPWS’s notes by Noureen Mushtaq

And thus we become able to develop a complex idea through interpreting these various kinds and natures of factors of simple things as said by David Hume:

“Man develops or transform a simple idea into complex one, for which mind has no further explanation”

This background discussion was made in order to build up an understanding for our first concept which is:

Ladder of inference:Ladder of inference is used to make people belief that they love in a “subjective World”.

By subjective world, we mean that it is such a world which is defined by ourselves, by us reading our:

Situations Conditions Surroundings etc

By making an employee belief that nothing is solid (with reference to situation), a vacuum is created for those employees to adjust and deal with the misbehaviors or such behaviors which are not of their desire or through using ladder of inference it is attempted that employee can deal with the unfavorable behaviors and happenings. Because it is a fact of life that everything can not go in one’s favor or as per the desire of one’s self, thus by these realization, one can be made to tolerate and accommodate such disturbing situations or cases as each one of Create our own Reality, based on our own beliefs.

From some Set of values generalized values become more important and transform into Beliefs then such Tested Beliefs becomes Assumptions which are not allowed to be Challenged. And this is how our realities, our criterions and our standards differ from others. And mostly we follow the following patter while decision making :

Context specific Assumption ConclusionAnd all of this is done, because we create our own reality. Ladder of refence promotes the employee that everyone has the right to define his or her own reality along with this the power of environment cannot be overlooked where environment’s pressure controls our behavior. That is why a learned man is the one who:

Learns Unlearn & RelearnThat is why for changing others’ behaviors, one has to change the environment as we don’t jave any other way of altering the behaviors.Principles of Ladder of inference:

In short, following are the principles of ladder of inference:1. As per OUR Set of values/values2. OUR Beliefs3. On OUR Assumptions4. Draw OUR own conclusions5. Collect OUR data6. Observe the data7. We give Meaning

While all of these components or principles, everything is based on ‘I’. Piaget’s Model of Learning:


“Whatever we see or acquire, we test it on the basis of our existing adopted or manifested mental structure or standards or assumptions and only that thing which can fit in there, in the mind and aligned with it, stays while others are disregarded”.

We evaluate new things on the basis of our own old, existing experiences and by default there exits, inbuilt resistance to change, in our mind. Thus we do following steps:

1. We Evaluate the Change and Resist to change and then2. We start Accommodation with change (means, that with the passage of

time we start accommodating ourselves gradually and next comes) : 3. Adopting 4. Organizing as your mental structure is mature enough to align this

newness/change with previous mental structure. When a person gets mature enough even being a learned man, this process still goes in,

but its duration is reduced and ladder of inference is used as a tool to teach employee, to respect others’ values as well.

We have to go through the basic assumptions in order to define or recognize our mental structures. Thus two perspectives or aspects have to be addressed in this regard:Metaphysics-Ontological discussion:

1. What is Reality/Knowledge?Epistemological – Metaphysics discussion:

2. How do we know it?(process of knowing that this is reality

Reality’s Different Assumptions on school of thoughts:1- Absolution Modernism (Reality is independent of its experience)2- Subjectivism Symbolic Interpretivism (Reality is dependent of its experience)3- Projection through language Post Modernism (through Language reality is displayed. Thus the purpose must be fulfilled for which it has been use/displayed ; ‘what is in it for me?”)

With the tiny change in the mental model or mind set, a complete new entity is being created.

Economical Rationality is the mostly biggest reality and it over ruled every other relationship when economic benefits are at stake then there is no moral or ethical model works.

It is an unconscious or unintentional process for the individual but intential for the one who is grooming him.

Thus, organization, structure etc varies for person to person. Have faith in your version of reality.


THE HIGH PERFORMANCE WORK SYSTEM:

The discussion of the lecture would start from the basic concept of HRM, reaching to SHRM an d discussing HPWS, in the same regard.

HRM is includes all those activities which are linked with Management of Employment Relations. HRM can be defined (Story, 1992) as an approach to people management ‘ which seeks to achieve Competitive Advantage through the strategic Deployment of a highly committed and capable workforce, using integration of cultural, structural and personnel techniques”.

HRM is explaned with two variants: 1- Soft HRM (focuses upon Developmental Humanist aspect)2- Hard HRM (focuses upon Management aspect of HR)

1-Soft variants:HRM can be explained by Humanist model (which contains its focus on the human

factor, means that people have to be empowered, trusted, skilled and quality focused etc which will become a source of competitive advantage for the organization.2-Hard variants:

HR is just an asset, which is as any other asset of the organization. As per the approach of cost-leadership, people must be managed, which focuses Utilitarian Model. In short this approach promotes that efficiency has to be improved.

Both of these aspects of HRM talks for achieving one objective and that is competitive advantage, as competitive advantage is directly proportionate with Organizational performance:

1- Soft Variants Humanist Model Human Focused Competitive Advantage2- Hard Variants Utilitarianism Model Management Focus Competitive Advantage.

There is always a controversial debate going on between soft and hard variants of HRM, but Guest (1999) has addressed some of these issues on the basis of empirical evidences that whatever way HRM’s variants are manipulated, employees are preferring to such situations which are resulted by the presence of few HR practices. As HR is a source of achieving competitive advantage (as per both debates) that is why a series of new labels (which are simply covered by HPWS) emerged in such as:

High commitment management High involvement management Best practice HRM Best fit etc

According to Delary and Doty (1996) it leads to three perspectives for organizations:1- Universalism Perspective:

It is meant for everyone and it talks about a) Business Strategy b) HR strategy 3) Business performance and it talks about Best Practices with same results.

“HR practices and Business strategy are independent yet they contain a positive relation or impact on the business performance”.


Although both of these (HR practices and business strategy) are very much important for an organization, yet it is not essential that both of these have to be aligned.2- Contingency :

As per this perspective, it would be same as well but their pattern would vary.According to this perspective, HR practices and Business strategy has to be Aligned or Integrated and HR practices have to be developed according to the business strategy, otherwise it would not positively improve business performance.Business strategy Hr practices Improved Business performance3- Configuration:

This perspective promotes the contingency perspective where its focus is on Environment as well. That is why as per the environment, HR practices and business strategy should be aligned only then the business performance will be improved. Keeping an open-ended approach and following holistic approach for inquiry to keep on analyzing the internal organizational systems etc, for the integration and possible adaptation of change, along with the patterns through which these hr practices work.

There are further two views regarding Competitive Advantage:1- Industry Organization Model also known as I/O Model2- Resource Based View also known as RBV

Industry Organization model:The forces of External environment are homogeneous and moveable, in that particular

industry (which means that every player in the industry has the access to those factors or influenced by those forces, as well as cane exploit those resources). Thus a proper use of business strategy would create potential competitive advantage for them as well.Resource Based View:

It states that it is actually the internal environment of the organization that creates competitive advantage for the organization. Therefore the internal forces of the organization are heterogeneous and immovable in the industry and they have more potential to be a source of competitive advantage as they are:

Rare Adding value Non-substitutable Inimitateable

(Only HR holds these attributes for a longer time period resulting in organization’s sustainable competitive advantage)

Resource Based view the impact or relations among a team is mediated by:1- Social Complexity2- Causal Ambiguity

And because of these factors, human beings fulfill the requirements that enable HR to play its important role in achieving Competitive Advantage.

For instance there is a team, being a source of competitive advantage and no one knows that what is the actual reason of their performance, as the possibilities could be:

Their relationship Environment etc


From this point it is leading to SHRM or strategic Human Resource Management, as SHRM is the focus of HPWS, that is why in many contexts two of them are used interchangeably.

SHRM:“SHRM is a set of practices that provide employees with Skills, Information, Motivation and

Latitude, resulting in a workforce that is a source of competitive advantage”.According to the Huselid (1995) there are links between HPWs and organizational performance if these kinds of SHRM practices are used whereas Flood et al. (2005) had examined the economical benefits.

When it comes to HPWS, then there are basically four components of HPWS and HR practices are one of them.

SHRM is based on two pillars:1- Integration it deals with Fit/Perfect Fit (fit in both sides of HR bundle; horizontally and vertically).2- Devolvement it deals by answering perfect fit but To what Extend

In Integration, we will discuss two sides of HR bundles:

1- Horizontal Fit:By horizontal fit we mean that all of the HR practices must be aligned with each other.

2- Vertical Fit:By vertical fit we mean that all of these HR practices must be aligned with the Business

Strategy.

HR practices are aligned and having a perfect fit, horizontally as well as vertically, which is also taken as integration.

Now we will discuss Devolvement, that deals or explains that to which extend organization has transformed/empowered or authority has been given to the line manager, instead of HR specialists or experts for executing HR strategy, as Line managers are the actual hands through which organizational strategy would be implemented. And even the nature and correct assessment of the workflow etc can be done by a line manager more accurately than others.

Devolvement is such an important concept in SHRM, that without devolvement HRM will never reach the level of SHRM.


Lecture 3- Dated: 04-03-2014

Following are the most important Terminologies used in HPWS: Work: “Efforts apply to accomplish something” Work System: “work occurred through some purposeful or proper system” Work system Framework: “a model for initial understanding of operationalization and

accomplishment of work system” Goal: “desired results through efficient use of work system” Organization: “Multiple work systems that are coordinated to achieve some good, that

cannot be achieved through individual work system” Business Process: “work steps through which work is accomplished with a proper work

system”. Work system: “it is a combination, integration and collaboration of machine and

humans, to produce product and services”

Work systems:“It is a combination, integration and collaboration of machine and humans, to produce

product and services”The term work system defines how the work of the organization is accomplished. The

decisions reading work system are Strategic in nature, which are focused to Protect and Capitalize on Core Competencies of the organization (it also includes the decisions regarding what should be procured or produced outside your organization in order to be efficient and sustainable in the marketplace. Work system includes:

a. Workforceb. Key Suppliers & partnersc. Contractorsd. Collaboratorse. Other components of Supply Chain management

Work system Framework:The approach for understanding work system includes both views:

i. Static View (of a current system in operation)ii. Dynamic View (of how a system evolves over time; includes planned

change and unplanned adaptation)Work system contains four elements:

1. Processed and Activities2. Participants3. Information4. Technologies

In order to understand work system’s operations, context and significance, following five elements should also be considered:

1. Product and services2. Customers


1-What Employee does?

Work System2-What Employee Need?

3- How Job Interact or interface each other?-What Employee does?

Job Specialization

Job RotationJob enrichmentJob enlargement

3. Environment4. Infrastructure5. Strategies

Definition of the sum of these components or elements of work system, are explained briefly below:

1- Processes and Activities: includes everything that happens within the work systems.2-Participants: are people who perform the work.3- Information: includes codified and non-codified information, used and created as participants perform their work. Knowledge: can be viewed as a special case of information4- Technologies: include tools and techniques that work system participants use while doing their work.5- Product and Services: are the combination of physical things, information and services that the work systems produce of its customers’ benefits and use.6-Customers: are the people who receive direct benefits from products and services that are produced by work system (includes external and internal customers).7- Environment: includes the organizational, cultural, competitive, technical and regulatory environment in which the work system operates.8- Infrastructure: includes human, informational and technical resources on which the work system replies.9-Strategies: includes the strategies of the work system, departments and enterprise, in which a work system exists, which may explain why the work system work operates or work, the why it does.

Creating Work system:There are three incidents of work system:

1- What employee does?2- What employee need?3- How job interacts or interfaces to each other?

Job Characteristic Model:It involves the following:

Skill variety Task identity Task significance Autonomy Feedback

1- What Employee does? What an employee does would be determined by the following:


Skill VarietyTask IdentityTask Significance

Meaningfulness of Job

Autonomy Accountable or Empowered person

Feedback Reflecting Actual Performance

Employees’ Job Satisfaction

Goal Achievement

Job Characteristic Model:It involves following:

Skill variety Task identity Task significance Autonomy Feed backAbove mentioned characteristics will lead to:

2- What employee need? Needs are depending upon various possible factors, which are required to be considered, such as: Need varies according to age and gender Employees need voice or representation They need work-life balance Safety, security etcIt has to be understood that without fulfilling the needs of people or employees, organization

cannot force them to work.

3- How Job Interact: How job interact is depending upon how business require that job to be interacted or interfaced.

Strategic Design of work or Redesigning of work:There can be various examples of this concepts, such as:

Outsourcing Off-shoring Franchising etc

Work system to HPWS:Work system was first discussed by Bortorm and Hiessen (1977).Then it was discussed with the concept of Socio-technical systemDavid Naddler (1992) discussed High Performance work system

High Performance Work System:


According to Huselid (1995):“Strategic HR practices which are considered as performance enhancing, are known as

HPWS”.It is important to note that there is no single definition of HPWS. But there are some common

ideas regarding HPWS, as agreement needs to exist on what is HPWS in terms of subject matter and content.

In order to respond the dynamic environment and change itself, organization highly replies upon the expertise and initiatives of its employees, regarding problems and opportunities. For this reason, timely and accurate information has to be provided to employees, only then they will be able to understand the overall direction of business and their role in contributing towards it. Because of providing timely, accurate and relevant information, organizations are more likely to:

Get good suggestions More employee commitment Shift from command and control to commitment focus Fundamental shift in relationship between employee and employer

Therefore, employees will:“Know more, do more and contribute more”

Principle of knowledge Development:Knowledge development is the twin sister of information sharing. Today there is rise of

knowledge and skill requiring jobs, as organizations are competing through their employees that are why they have to invest in employee development as well. And such a system will attain, retain and build employees through opportunities etc.

HPWS is an extension of SHRM and deliberation of work systems. Following is the definition of HPWS:“It is a combination of:

Human resource practices Work systems Structures Business practices and processes

That develops employees with: Flexibility Commitment Skills Knowledge”

This reflects how these practices, systems and processes help employee to maximize. What important here is to understand that they key concept if System not its components alone, as it is composed of many interrelated parts that complement one and another.

David Nadler (1992) was the person who used the notion HPWS for the first time as an organizational architecture which included both technical and social aspects of work. Whereas Edward Lawler (2000) had identified primary principles that support HPWS, mentioned below:


Principle of HPWS:Following are four principles:

i. Shared informationii. Knowledge development

iii. Performance reward linkiv. Egalitarianism (justice/equality)

1- Shared information:This principle is critical for the success of empowerment and involvement initiatives in

the organizations, as now the demand of jobs is of diversified set of skills and knowledge because of pace of change, technology , need of innovative approaches for solving problems in novel manners etc, therefore HPWS needs to learn in Real Time. HPWS depends on the shift from touch labor to knowledge work.

It means that there has to be such systems which has clear pattern of communication, because only then it will lead to specific decision.

i)Shared information ii) Communication iii)Empowerment iv) Employee Commitment & Motivation v)Builds decision power for right choice of alternatives vi)enhances performance.

2-Knowledge development:Natural aspect of organization is that the interests of employee and employer vary, either

intentionally or unintentionally. That is why for smooth way, these interests have to be align by various tools such as performance based rewards etc by using mutual beneficial mechanisms. Thus, employees may work above or below their duty, which is not certain. So to make certain these efforts are made.

Environment goes from linear to non-linear conditions, which means that sometimes sharing information can be dangerous as ell, so there should be proper training and development skills, only then shared information can create commitment, empowerment and performance etc.

3-Performance reward link:It happens that performance based rewards, create conflicts of interests among employees

and organization also, which are obvious and natural. On the following basis, reward is given from organizational perspective: Skill based rewards Performance based rewards Seniority based rewards

4-Egalitarianism (justice/equality):People want a sense that they are members, not just workers. That is why status and

power differences would tend to separate people giving a feeling of “US VS THEM”. Thus the ultimate objective of HPWS is to eliminate such differences and increase collaboration and teamwork, by various ways signally employees that they are equally important as others, as per their contribution; seniors executives do not enjoy any traditional benefits etc. in short the Power is moving downwards, by empowering employees which needs structural changes as well. As


work flow has to be redesigned in order to give employees, more control and influence in decision making. Peter Arthur Hanson said:“To be a successful independent, you need to empower your employees and let them know that

they are critical to success” Some of the ways of increasing employee’s power are:

Job enlargement Job enrichment Self managing work teams

To conclude it, this principle advocates that:1- Employees must be treated equally2- Egalitarians say that if there is a separate dress code for seniors and workers, then it

indicates the less equality in the organization3- Employees can even call their seniors and managers with name

Lecture 4- Dated: 11-03-2014

*It describes structure and it has to eb on the basis of principlesAnatomy* of HPWS:

HPWS frequently begin with the way work is designed. Quality drivers such as TQM and reengineering has shifted the focus of the companies from separating jobs into discrete/ isolated units to key business process which are responsible for customer value and then creating teams, responsible for those processes. Therefore, we have today many practical and successful examples where instead of separating each stage of production into discrete steps, teams work together in a seamless process to produce products and services, which ultimately makes work more meaningful for employees as well.

1- Work Flow Design and Team Work:2- Complementary HR Practices3- Management Processes and Leadership4- Supportive Information Technology

The important point here is to keep in mind that any components alone weather its work design or reengineering is lonely comprises of HPWS, other supporting elements of HRM are also essential that is why when it is HPWS, we talk about changes in workflow design with HRM practices that encourages skill development and employee involvement.

1-Work Flow Design and Team Work:HPWS is all about how the work has been designed.

HR Management is based upon:1- Total quality management2- Restructuring3- Re-engineering

All of these attempts are made in order to make sure continuous visiting and revisiting organizational structure and work flows to improve. In this perspective TQM as modification is required to keep adjusting with changing environment. Restructuring and reengineering


Structure

And take advantage of employee’s KASOS. If there is no KASOS, than there would be no HPWS. As if KASOS is not present then there is no benefit of empowering or team making that is why employee’s knowledge etc should be enhances.

Restructuring

TQM

Reengineering

to redesign the work flow on the basis of the principles of HPWS. Redesign the workflow of main people, who actually execute work.

2- Complementary HR Practices: One cannot handle HR well unless HR practices are properly followed. All of these

practices or processes are integrated to build competitive advantage and to deliver ultimate customer value. And through HR practices, the team is made and empowerment is assigned to such teams, in such situation empowerment can be beneficial, for the organization.(there are three HR complementary, from which one has been discussed here):

1. Staffing Practices2. Training and development3. Compensation

1-Staffing Activities include:HPWS begin with highly directive recruitment and selection practices. It is very

important to get the best pool of candidates from which to choose, one of the key attribute that organizations have to look with reference to HPWS is individual with the ability to Learn continuously. Technology has made it much easier now with the help of HRIS, which can keep the inventory of employee’s talent and search for specific skills, needed by the organization. Because talented employees “Come to speed up” more quickly and take less time to develop, means that even for gaining maximum benefits of training, the eligible employee, having the potential to be enhanced, must be recruited and selected. It includes the following important elements in it:

i. Job analysisii. Job positioning

iii. Screeningiv. Recruiting v. Selection

We will select only those candidates, who have steeper Learning Candidates/ fast learner with reference to our discussion. We will select that weather they can manage learning process according to the requirement of organization and can acquire and manage information.


2-Training and development:Just like recruitment and selection, training ensures that employees have the skills

needed in HPWS for superior performance. Typically training focus upon: Technical aspects Problem solving Interpersonal skills Teamwork Involvement Continuous improvement Better understanding of work

Another important reason of training and development is that the skills set gained should be procured and updated side by side to periodically review the competencies of employees.

Training and development used to breach the gap between what employees have and what they are desired and on the basis of HR Inventory so that can tell what is existing hr in the organization and what will be required for training and development, as everyone cannot be trained in organization, having these number of employees.

T and D is about grooming to make decision and solving problems at their own level. Therefore copying with T and D has to create or improve following factors:

a- Developing skill/abilitiesb- Problem Solvingc- Decision Makingd- Interpersonal Skills etc.

3- Compensation:Another important piece of HPWS is Compensation package. It is very important to note

that organization demands many different things from employees, that is why it is also difficult to isolate one single approach to pay that will be effective and working for everyone. That is why organizations now adopt alternative compensation plans in order to link Pay and Performance. Therefore HPWS offers some type of Employee incentives. The fourth important principle that will be discussed after this, principle of Egalitarianism also talks about equality, for which HPWS also uses open plan systems in which everyone knows what the others are making, and thus results in more egalitarian environment.

There are two dimensions of compensation:1- Pay to Performance2- Pay to Skill (which means highly skilled labor

has to be incorporated)In HPWS, you use segmentation in compensation as the requirements are higher from

employees. Through a multi dimensional approach of compensation, to compel and motivate the employees to perform this much and be involved. Employees would be compensated as per their involvement and contribution to the performance.


Organization core competences and

functions

Core Management and Core process

Are made on the basis of core competencies

4-Management Processes and leadership:Another important aspect of HPWS is linked with Management process and leadership at

different levels. It is equally important to understand that the role of management and leadership would be very essential, initial and crucial as HPWS’s success highly depends upon the changing the roles of the managers and team leaders. With fewer layers of management and a focus on team based organization, the role of managers and supervisors would be entirely different in a HPWS environment, more likely as coaches, mentors, facilitators and integrators of teams. Alternatively, different individuals can assume functional leadership roles when their particular expertise is needed most.

For instance the various concepts of leadership have been introduced to cultivate self disciplined teams etc, such as:

Servant leadership Enabler Stewardship Facilitator Motivator etc

4-Supportive Information Technology:Communication and information technology are integrated pieces and are another

important element that has to be added to the framework of HPWS, as different kinds of technologies can create the infrastructure for communicating and sharing information that is very important for business performance. Computerized systems can help in various ways, as we have discussed the importance of timely, accurate and relevant information sharing, without which HPWS can’t be successful. Yet it is important to know as well that information technologies need not to be always so high-tech, the richest communication is always face-to-face.

It means that informational technology has to help the organizational function.

Fitting it all together: Although each of the individual pieces of HPWS are very important but whenever the

discussion goes on about HPWS the importance of all of these pieces or elements of HPWS is particularly valuable in terms of their particular value in terms of how they contribute and fit to the overall system, as a whole. For this carefully planning is needed to ensure that all pieces fit together with the strategic goals of the organization. There are two important aspects to look on to the fitness:

a. Ensuring internal fitb. Ensuring External fit

a. Ensuring Internal fit: talks that all internal elements of HPWS should complement and reinforce each other. Thus, for instance to bring change in one component will not be effective


As a result this system will formed as:

HR Expertise:-Admin Expert (policies)

-Strategic Execution Expert- Employee Advocacy (voice of

employee etc)HR Deliverables:

-workforce Mindset-Technical skills

-Workforce behaviors

High Performance Practices:-Communication based

-Staffing-Compensation-Development

-Measurement etc

Strategic Focus:-operations

-Product leadership -Customer intimacy

-Alignment Based-Integration Based-Differentiation Based

It will guide you through the path and will enhance HR performance

There is nothing invested in T& D that cannot be measured

unless it is aligned with the whole system. That is why we talk about horizontal fit; all HR practices, work designs, management processes and technologies complement one another. The synergy that is achieved through the overlapping work and HR practices is the essence of HPWS’s effectives and success. (Consider yourself as an organization including the HR practices, Management Processes and technology; also includes horizontally integration)b. Ensuring External Fit:

it is equally required by a system to support the organizational goals and strategies. This all starts with the basic analysis of competitive challenges, organizational values and concerns of employees. On the basis of these goals and strategies each members knows how individual efforts will make a difference. Thus by achieving vertical fit, the HPWS can focus on its designs by keeping the strategies and goals in mind. Thus, strategic requirements are translated directly to those who are actually going to achieve it. (For whom you are working, strategic objectives, customers, suppliers, competitors, distributors and environment etc)As per the (theory name?) minimum satisfaction level of all stakeholders should be met. As it is commonly said that keep them happy and it will create happy ways for you as well and all of these four elements are linked with:

Integration Devolvement

Assessing the alignment: The HR ScorecardThe balance scorecard is a tool that is used to evaluate the link between strategic goals

and operational activities. Becker, Huselid and Ulrich had adapted the model to create HR scorecard that helps manager to assess the strategic alignment of their work system.HR scorecard is used to diagnose internal fit and is very helpful for managers to see how to best implement the system, by these three assessments:

1. Assessing whether Particular HR practices reinforce one another 2. Assess whether HR practices significantly enable key workforce

deliverables ;stability and teamwork etc3. Assess the degree to which deliverables are connected with strategic

performance

To what extend all of the processes have been aligned or integrated. For this purpose we use HR Score card to asses this. HR score card is a tool to evaluate HR practices.


HRP/SYS REUSLTS

How & When(Black box)

On these basis you can develop HR system Another important component comes here in this discussion that is of the unlocked Black

box.

As an HR manager one must translate the potential monetary benefits that can be achieved by investing in HR and when you can define it and communicate it to the executives that are the important contribution in an organization’s decision making where you sell this important point to the strategic top level management.

By all of these steps, we try to modify all of the relevant HR factors that can result in improved performance etc.

There are various theorists, who also talk about “integrating HR score card with Business Score card”

Implementation:Much of what looks good on paper gets messy during implementation. Thus it is of major

interest to identify the key factors that can make or break HPWS, such as:1. Make a Compelling case for change, that should be linked with business’s strategy2. Ensure that the change is owned by senior and line manager3. Allocate sufficient resource and support for the change effort4. Ensure easily and broad communication5. Ensure that teams are implemented in a systemic context6. Establish methods for measuring the results of change7. Ensure continuity of leadership and champions of the initiative

These recommendations are applicable and effective in almost any change initiative , but more importantly for broach-based change efforts for HPWS.

1-Establishing a communication Plan:There should be a Two way (bottom up and top to downward ) communication that can

project managements’ views to employees and reflect employees’ hesitations, fears and insecurities well. That is open exchange and communication at an early stage pay off later as the system is completely implement or completed, as during the implementation and once when system is place, shared information is always the building block of HPWS.


Communication plan; which should be in two way pattern:1- top down (it reselects the top level management’s trust on

employees)2- bottom up patterns (it should the willingness of

employees for top management)2-Involving the Unions:

Involve union members early and to keep them as close partners in the design and implement, this will avoid many possible negative reactions that could result in the miscommunication or missing involvement, representation of the unions and labors.

Unions: it involves powerful stakeholders, who can cause resistance to change or in other words they are main or key resourceful persons who can cause resistance.

Instead of Win-Loss situation, it should be tried to make Win-Win position or at least to create its illusion for other parties.

3- Cultivating Mutual Gains: When it comes to HPWS, we talk about integration and alignment of all of the

components of practices, systems and work flow, that gives a pretty good idea that this vary same formula has to be applied to all of the managers, labor representatives etc to create win-win situation and only then each member involved will ensure the success of the HPWS by contributing to their best level. There are following important points in it:

Trust is very important, fragile component of an alliance, thus it has to be promoted

Information sharing and decision making are the key indicators of the degree of trust each party contains.

So build trust up, that everyone will be benefited.

4- Establishing Formal Commitment:There has to be some legitimate indicator thorough some tangible symbol of

commitment, such as in the form of legal documentation or policy documents etc. these Formal or document zed form of commitment is used for two main objectives:

1. An indicator of management’s commitment2. To institutionalize the relationship, even after key project head,

executive or champions leaves. It can also be done through formal documentation (of negotiation etc with stakeholders),

which will demonstrate a clear picture to everyone, so they can help and enhance, as well as assist change. That is why one should keep in mind that the negotiation will remain as long as the document stays, so you cannot change it without concerning other person and involving them in also.

Never overlook the document, as everything else is designed according to that document. And also never go for one-sided change or modifications on the documents as it is never

acceptable.

5- Fostering Support of other key constituents:For effective implementation of HPWS, it should be having solid support and

understanding at all levels not only among the excuetive or representative levels, which can be done, for example by decentralizing the labor relation function, assigning responsibilities to line


managers etc, because they are the actual ones who will establish a direct relation with the union and labors.

6- Adhering to Procedures:It is very important to stick and hold on to the procedures as Wright said that Alliances

stand on the rug of procedure, or in other words it can be said this way that alliance rely and depends upon the procedures that have been agreed and defined at the time of mutual agreement etc.

7- Navigating the Transition to HPWS:Now the time has came after all of the previous steps to find a way for making the

existing system go through the transition phase and absorb the effects of change, positively. This is an ongoing activity and is never fully achieved either. Because in HPWS pieces or components of a system are refined, shaped and transformed instead of all of the system at once. There should be:

1. Top Down Change driven by Management2. Bottom Up Change driven by employee

But it will only be effective when both of them would be in same direction; top-down approach is an indicator of Management’s support while bottom up approach is the reflection of employee’s acceptance and commitment.

8- Building a Transition Structure:Implementing HPWS works differently for different organization, that is why it is a fit

not a set of best practices or golden rules, equally applicable to every context, time and organization. Thus some organizations can take a pause in their production or operations while implementing these changes, whereas others cannot afford the pause or break. Therefore there should be a structure (such as mapping key process, redesigning work and training employees etc) that will make the transition phase successful at the same let the others or key operations of the business, not being negative effected.Translation: it means draw map line and Pick a proper model to implement.

9- Incorporating HR function as a Valuable Partner:One possible mistake while implanting HPWS, could be allocating too few resource that

includes money, time and expertise. That is why all of these three elements have to be kept up to that level that can deal with all possible issues and difficulties that can come such as the stress and problems that will be faced by the employees as when they are faced with new systems, even trained and experienced employees have to start all over again which is stressful and can spread in workforce by copying behavior , that is why such managers are required at that time who can identify these human problems and can deal it well. So again, resources in the form of time, money and expertise have to be aligned with HPWS also.

10- Evaluating the Success of the System:HPWS has to be continuously evaluated and monitored after it is being implemented. There

are following important aspects that have to be evaluated and monitored:


1. Process audit to see that the system has been implemented the way it was designed or planned (planned vs actual system), it may include following key questions:

i. Employee actually working as teams/together?ii. Access to required information for empowered

decisions?iii. Training programs result in developed HR (skill and

knowledge)?iv. Performance based rewarding and useful suggestions

are happening?v. Fair treatment of employees to minimize power

differences?

2. Is actual or operational process focus upon goals of HPWS? Which can be answered by looking on these areas :

i. Employees showing desired behaviors?ii. Quality, flexibility, productivity and customer services’

objectives are achieved?iii. Employee’s Quality of life is enhanced?iv. Increased competitive capacity of firm than past?

3. HPWS should be evaluated for updated organizational priorities and initiatives

11- Outcomes of HPWS:There are various levels and wide range outcomes of HPWS, which are basically

classified as :1. Employee Outcomes and Quality of life2. Organizational outcomes and competitive Advantage

1-at Employee or Individual level (for instance weather his work life quality or work life balance is improved or not etc)it may include:

1. Autonomy2. Learning3. Knowledge enhancement4. Career development and growth5. Expertise6. Recognition/ valued7. etc

When organization has gained the potential candidates then it is a must to allow them to use their skills, knowledge and potential for organizational success only then the cost and efforts incurred by recruitment and selection or training kinds of processes would be fruitful for the organization.2-At Organizational Level; it includes further two things:

i- Competitivenessii- Competitive Advantage (means that

through HPWS one has improved the


organization as rare, in-imitable, non-substitutable and value adding)

It may include:1. Higher productivity2. Lower costs3. Better responsiveness to customers4. Etc

But all of these are struggled to gain sustainable competitive advantage. And for that these has to be the following characteristics in HR and system to be a source of Competitive Advantage as:

1. Valuable2. Rare3. Difficult to imitate4. Organization

In literature there are other similar concepts existing such as; HPWS leads to High Commitment High Performance ManagementHigh InvolvementTherefore it can be concluded that Sustainable competitive advantage is not possible today

without HPWS. As through the followings:1- Core Business Functions2- HR practices

And both of these maximize employee’s performance as well as his wellbeing and which definitely influence organizational performance including competitive advantage, as HPWS focuses upon Employee.

There are various other factors, also taken as driving forces for HPWS, including:All HR practices/processes etc Employee commitment HPWS

HPWS and small and Medium Sized Employer:HPWS is equally applicable to small and medium sized organizations and are equally

appropriate to all sizes. What is the essence of effective system of HPW practices is that they have to be done with coordination and integration.


HR Practices Performance

Outcomes

Black BOX

Lecture 5, Dated: 25-03-2014

Why mathematical model could not be established in SHRM? As SHRM has also:Methodological issues:

The first issue is can we measure various variables And more importantly another issue, one step backwards; can we truly

Conceptualize those variable?Conceptual consensuses are needed before establishing the measure for measuring that variable,

such as for: Market share Market growth Organizational performance etc

As job satisfaction etc have same dimension in all organizations but their Meanings vary, which makes its conceptualization difficult.

Third is why it should be down? Means that either for Performance or Outcome?

Performance can be one of the outcomes Levels of outcome can also vary such as:

1- Organizational level outcome2- Employee level outcome (related to HR) etc

This is how things are being over lapped on each other. That is why a discussion on THE DEBATES IN HPWS, would enable us for

identifying Gaps, future directions and key areas of differences.(Slides started)

Now we will talk about Bundles of integrated HR practices, which are internally consistent, instead of isolated HR practices.

This is the point when we move to Strategic HRM. Why are we talking about SHRM here, because it is important to discuss HR

bundles while discussing HPWS, there are 3 kinds of HR bundles such as:1- Empowerment enhancing bundle2- Skill enhancing bundle3- Motivation enhancing bundle

These are such HR bundles that can result in empowerment, skill and motivation enhancement. And one important thing to remember that whenever throughout this discussion if the term ‘HR practices’ is used, it is referring to HR bundles not single HR practice.

Thus one can conclude that through HR bundles the performance of the organization can be enhanced

Weak Underpinning:

Here we are talking about HR practices as Bundle, that may include various appropriate set of HR practices; skills, empowerment and motivation. While these bundles result into outcome not


in performance, as the term performance is very limited but the term outcome can cover up performance in itself that is why we use the result of hr bundles as outcome.

Ulrich (2000) states that:“These HR practices, which are integrated closely with each other, create such HR

Competence, which results into performance” Although this framework is very strong yet it cannot be proved mathematically,

because as said by Boselie et al, there has to be Solid Explanation or concepts that can be mathematically proved.

Now here before explaining n discussing this issue, there are some prerequisites we should go through such as:1- Universalism2-RBV (Resource based view)3-AMO (Ability motivation opportunity)

According to Contingency theory, there have to be a best fit, such as:HR Policy (according to business objectives) + Business Policy = Business Performance

While Universalism talks about best practices (based on Institutional theory, referring to similar environment sharing organizations).

Contingency theory talks about Best fit according to the environment while Universalism talks about best Practices for similar environment sharing organizations.

Now at this level, the discussion would be about these three theories or approaches and how their defenders have justified or explained their strong link or impact on organizational performance.

Delery gave empirical evidences that because of universalism, performance can be improved

While RBV, focuses on organizational level or within the organization more because organization always excels on the internal basis

HPWS focuses, on empowering employee that is why it has a link with AMO also. Therefore, organization has to explore the opportunities and if organization does not give chance to employee for taking initiatives then how can his creativity and abilities be enhanced?

Whenever you use any of the HR practices in your research, make sure that you need to provide relevant supporting literature for each practice.

The concept of contingent pay is that, it is given on the basis of Performance, paying extra than the permanent pay of the employee.

Utilitarianism instrument theory says that a good thing for one would or should be good for everyone else as well.

All of these consensus issues are there because of the lack of correct theoretical frameworks (for example one of such gap can be filled by defining specific condition, needed for estimating the correct impact of these HR practices on organization)

Issues:Therefore it can be concluded that there are basically two essential problems with HPWS:

1- Methodological Issues2- Conceptual Issues


There are three questions, for initiating the solution of above mentioned issues:1- Weather this particular HR practice has been implemented in the organization or not?2- To what extend the employees of the organization are exposed to them?3- To what extent, each employee has its intensity at different levels?

RESRACH TIP whenever you go for using a tool to measure your variable, try to see all of these three proximities in it and see why researcher has used this particular tool in his research (from where you are referring for using such measures) and also go through the methodology for knowing what samples would you need for using these tools.

Human Resource Practices:There are basically three levels at which these practices are there in an

organization:1- Intended HR practices2- Actual HR practices3- Perceived HR practices (by the employees)

The intended HR practices and Actual HR practice would be done by the organization but the impact of these HR practices would be determined by employees, as per their perception about the HR practices.

The intention or purpose of today’s discussion we can say that we have to create a stream, which will have the consensus of the entire researcher, where it would not the purpose to Conform to everyone to one paradigm but to define the stream that can be followed for all paradigms.

Casualty:It means A is causing B or we can say it in the form of a equation that Y= B1 + B2 + B3.

Causality is always complex. Here this is the third debate or issue that starts here regarding HR practices or HPWS.

Employee is the unit even at that black box, which is then transformed, transmitted and understood.

As per the Unitarist assumption, conflict between organization and employee exists. The most important things in this regard are employee’s reaction about HR practices.“Performance is the function of Perceive HR practices by the employee, not a result of

intended or actual HR practices”Performance= f (employee perception of HRP)

While one thing to be understood or reminded while this discussion is that our basic assumption here in this discussion is that all of the organizations are based upon Rationality or in other words it is basically rationality that is governing all of the organizational steps.

There are various examples of PWS, where there are contradictory effects on employee. That is why it has been discussed even in literature about the importance of perception of employee that would determine the result of HRP.

Review:There are three key issue that we have discussed in class up till now:

1- Weak underpinning (because of black box)


2- Methodological issues3- Outcome:

Organizational level outcomes and Employee level outcomes

1As per the first issue of weak underpinnings all three of the theories we have discussed earlier are not able to unlock the black box alone.2for Methodological issues there further steps or components which are important such as:

a- conceptualizationb- Measurements:

I-PresenceII-CoverageIII-Intensities

c- Reliability:I- Valid source of informationII- Signal RespondentIII- Causality:

i- Simpleii- Complex (Vertical + Horizontal)

d- HR Policy:I- Intended PracticesII- Actual PracticesIII- Perceived Practices

3 as far as the issue are regarding the Outcome following are further two elements in it:a- Organizational Level Outcomes:

I- Financial Outcomes (such as ROI, Sales, Toubin’s Q)II- HR Related Outcomes (Attitude + Behavior)

III- Organizational Outcomes (Productivity + efficiency+ effectiveness)b- Individual or Employee Level Outcome:

I- Employee GainsII- Employee Reactions


HPWS(Including all practices &

systems)

RBV(Employee’s Perception

about HPWs/HRP)-Rare

-In imitable-time bond

-value addition-non substitutable

HR outcomes

(Linked with individual’s outcome

also)

Attitude:-Satisfaction

-OC etc

Behavior:-OCB

-Absentees- TOI etc

Organizational Outcomes

A-Financial Outcomes:

(Book based indicators)-ROI-ROF-ROA

(Market based indicators)-Profit to book value

-Tobin’s Q

Organizational Performance

-Effectiveness-Efficiency

-Productivity-Market Activity

Data was collected by followingDelphi Technique


Lecture 6; Dated 01-04-2014Article’s extracts:

The joint contribution of Economics and HRM: Economics is the mother of all sciences and it is also a fact that it rules all around the

rationality of human beings as well. It is also a driving force for all of us, especially for business. Organizational behavior is also discussed by economics. Economics discusses productivity at macro as well as micro levels. Thus, it can be said that economics is always behind business. Because all of the results

are ultimately been attempt for gaining economic benefits for the organization in the form of profits.

That is why while talking about HPWS; it would be of great importance to discuss the economical perspective regarding HPWS.

The criticism that has been presented in their article regarding economics is that it does not present any appreciating attempts regarding HPWS.

HPWS revolves around the relationship between Employee and Employer, just like the way this relationship has been discussed in economics as well.

But employee, employer relationship has been discussed differently in economics and HPWS.

And second common point between economics and HPWs is that both of them strive for achieving efficiency and effectiveness of the organization.

Article’s Theme:1- HPWS takes organization towards Superior Economic Performance.2- Contribution of HRM and economics towards HPWS (although there is hardly any economics literature talking about HPWS).*X-Efficiency theory states that employee always contributes less than his capacity towards the organizational performance.The plan of this paper being reviewed is to:

Discuss the HPWS from main stream of both literatures. Also discuss the aspect of Behavioral Economics; financial behavior is one of its

examples. Therefore, initially this paper discusses organizational behavior and behavioral

economics and then both of them will be integrated.HPWS is also known as High Involvement organization or High Commitment results into high Performance of organization.

These seven HR practices as per mentioned in article contributes towards HPWS, along with the four principles:

1. Employment security2. Selective hiring of new personals3. Self-managed teams4. Pay to performance5. Extensive training6. Reduce status7. Information Sharing


By having these HR practices, the organization will turn into a highly involved organization and in such high involvement organization employee will:

“Feel responsible for and involved in its success”Author has given real market examples to support his argument.

Fundamental differences between HPWS and Economics:The relationship between employee and employer is special in nature which leads to

sustainable competitive advantage. There are two kinds of approached or one can say that similar set of practices etc can be perceived as either control oriented or involvement oriented approach of the organization.

Control Oriented Approach; believing that “workers at the lowest level are only hands to perform the tasks and they are not required to think in decision making of work design” and following tools are used to control:

Simplified Standardized Specialized Supervision and Pay Incentives (based on the performance of tasks)

Involvement Oriented Approach; according to Lawler (1992) “Employees should be able to perform without a controlling supervision” and employee does not exist for work only but also for:

Improving work methods Procedures Solving problems Coordination

And for this purpose employees are needed to be Empowered and motivated. Through this mechanism organization can effectively and positively control employees’ performing behaviors. And this is also the main different point from economic approach.

HPWS linked with Economical Performance:Huselid (1995) have provided evidences regarding the link between economical

performance and HPWS, by stating that:“The magnitude of the return on investment in high performance work practices or systems is

substantial”Evidences:

Huselid had provided various evidences by linking the investment in human resource practices resulting or translating intro monetary or economic outcomes, such as:

One standard deviation in HRP will result into 7.05% decrease in turnover intentions. 27,044 increase in sales3814 increase in market value

HPWS advocates towards Work FOR each other, not AGAINST each other.

Therefore, on the basis of practical evidences that:

HPWS Improved Organizational PerformanceSuperior Economic Performance.


An important thing to note here that the set of these HR practices will vary accordingly and this will create the fit, this is the reason it is always HR bundles involved in creating such fit.

Main Scream Organizational Economics:Although John Tomer (author of the article) had shown practical evidences in his article

that both (Economics and HPWS) of these are linked and impacting organization as well, yet the main stream of economics does not support the superiority of HPWS, because:

Economics talks about Control Oriented OrganizationWhile

HPWStalks about Involvement Oriented OrganizationAnd that is why as per Economics; variables which cannot be measured cannot be managed also.it could be possible to create a combination of involvement + control oriented approach that may help and support HPWS.

Mainstream of HRM:Before discussing this perspective, it is important to note that here we are talking about

simple HRM not SHRM, thus here by HRM we mean traditional HRM approaches, which also inclines towards Control Oriented Approach. And it also revolves around Agency theory regarding Employee, Employer Relationship. Therefore, even at this mainstream of HRM, we find no such link as well.

Developing an understanding of HPWSWe would try to build this link between HPWS, through Behavioral Economics.

Organizational Behaviors:For effective use and results of HR practices and systems, OB talks about those three

required conditions for those HR practices, which already contain the potential to contribute in organizational performance. 1- When employee have the knowledge, skill to manage task2- Employees are motivated to apply their skills and knowledge in discretionary efforts.3- MISSING

HPWSis something that contains these conditions by default. Because the objective of these conditions is to help employees through their skills, motivation and knowledge in their decision making and job design.

And one reasons for the presence of such conditions in HPWS is that because of the “Peer pressure” employee have to develop and learn such knowledge and skills required for effectiveness.

In HPWS as per the part of employees or as per their perspective, they contain a very clear conceptualization regarding how much smart efforts are required for the output, they require.

Integrating Organizational Behavior with Behavioral Economics:HPWS’s employee put more efforts than in control oriented organizations.Workers in traditional control oriented originations will experiences:

1- Stress


2- Frustration3- Psychological failures4- Short time perspective5- Internal conflict etc

Contrary to this condition resulted in control oriented organization, when an organization enhances and enables an individual with Self Actualization (Self Actualization is the state when person is not recognized by his works, rather his work is recognized by him). Then he will put more efforts for organizational success.

Worker Motivation Model:John Tomer (1987) has presented his model having four dimensions:1. the match between an individual and the characteristics of both job and the organization2. the existing structure and supervision of the job.3. the existence of clear, meaningful goals for jobs and the organization.4. the nature and enforcement of the implicit contract between employer and employee.

There is the existence of considerable control on how work is done, to acquire skills.

Two kinds of Motivation:1- Agent Motivation (that is an economic perspective)2- Deep Ownership Motivation (Intangible Ownership)

These are distinctive nature of employee and employer relationship. Why is it difficult for economists to understand the deep ownership motivation? The reason being is because the agent motivation is structured as compare to deep ownership motivation. Through agent motivation, satisfaction of lower needs are rewarded which is the most familiar form of reward for economists. While in deep ownership motivation, employee feels high psychological power.

Organizational Relationship as Capital:Deep motivation is neither extrinsic or intern sic, rather it is based on employee and

employer’s relationship. And this is how this individual factor of production (as per economic aspect) becomes much more beneficial than any other factor of production.Organizational Capital:Connective capital means Relationship

It supports learningConnective Capital Improved performance.Results in operating performanceOrganizational Capital Concept linked with organizational capabilities The performance Difference:

Structure of interaction and information transfer is the difference that derivers or defines how and where to invest in (in which kind of capital).

Making successful organizational investment in HPWS for Competitive advantage as: Intangible Unique Firm Non substitutable


Rare etc


Lecture 1 complete HPWS

Documents

Transcript of Lecture 1 complete HPWS