About EEF - CIPD

Maximising employee potential and business performance: the role of High Performance Workingsignificant predictors of change both inprofitability and productivity. Inaddition, HRM practices are seen as farmore powerful predictors of change incompany performance than R&D,technology, quality and strategy. Theauthors suggest that the reasonmanagers are so slow to implement suchpractices is that managing people ismore ambiguous than other businessgoals and this makes it more daunting.HPW is working across the globeAshton and Sung consider the wealth ofevidence on whether HPW can deliverresults in terms of higher productivityand profitability. They find evidence of arobust link between HPW and companyperformance and that ‘put plainly,investment in these practices and theskills associated with them pays off onthe bottom line’.Studies have been conducted across theglobe from the US, to UK, Canada,Taiwan, China and New Zealand, with allthe results pointing in the same direction(see in addition the detailed study ofHPW in UK aerospace conducted byMarc Thomson of Templeton CollegeOxford, Box 2). These practices areevident in organisations across the globeand are producing similar results. Notonly were the results coming fromdifferent countries but from varyingmethodologies, adding to the robustnessof the findings. The results also showthat the performance improvements onlycome from the implementation ofbundles of practices that are selfreinforcing,rather than single initiatives.Benefits for employeesAlthough the outcomes for employeeshave not been investigated asthoroughly as the impact onperformance, the evidence base points toHPW leading to higher job satisfaction.In addition, autonomy over task-leveldecision making, membership of selfdirectedteams and communication withpeople outside the work group areassociated with workers trustingmanagers and experiencing intrinsicrewards. Trust and intrinsic rewards inturn feed into a strong positive impacton organisational commitment and jobsatisfaction.Given that HPW can lead to higherproductivity, it is not surprising thatemployees can also benefit from higherearnings under it. Higher earnings mustalso be linked to one of the otherbenefits of HPW for employees - higherlevels of skills. The higher level oftraining that can underpin HPW tends toproduce higher levels of skills. Researchin the UK points to these new skills beingconcentrated in IT, problem solving,communication and teamwork.12