About EEF - CIPD

More documents

Recommendations

Info

Maximising employee potential and business performance: the role of High Performance WorkingIn addition, EEF results show a differencein take-up and performance betweenforeign and domestically-ownedcompanies in the UK. US-owned firms inthe UK are making greater use of allforms of workplace initiatives than theirUK-owned counterparts and at the sametime are enjoying higher productivityand increased profitability.There is further evidence suggesting thatthe take up of HPW is limited. A CIPDstudy by Guest et al (2000) uses the1998 Workplace Employment RelationsSurvey (WERS) to examine the UK’sexisting HR practices across both thepublic and private sectors. The studydoes so by looking at the eighteenprogressive practices outlined in table 1which range across such areas asrecruitment, training, appraisal, jobdesign, quality and communication. Theresults show that the take-up of suchpractices is low and that while somefirms have a human resources strategyand manage their people well, there is along tail of poor performers that doneither. Only 1% of companies usethree quarters or more of the practicesextensively, while 25% have fewer thana quarter of the practices in place. Theresults show a clear link between the useof more human resource practices andgreater employee involvement, positiveemployee satisfaction and commitment,higher productivity and better financialperformance.Thus, despite the wealth of evidence,these studies indicate a surprisingly lowtake-up of HPW practices. This suggeststhat there is considerable scope tofurther improve levels of profitability andproductivity in the UK.Chart 3Uptake of reward schemes% of firms stating they currently operatethe following…%45 Manufacturing Economy wide4035302520151050AwardsLong-term Incentive PlansRecruitment/Introduction bonusTeam bonusesCash recognition schemesGolden hellosConsolidated bonusesLength of service bonusEmployee share schemeSales commissionProfit-sharingNon-consolidated bonusesOther recognition schemesGolden handshakesGainsharingPieceworkSource: CIPDUse of associated reward schemesalso limitedNew mechanisms of rewarding staff canbe a component of HPW, although theyare by no means sufficient and on theirown can fail to deliver significant results.The annual CIPD Reward ManagementSurvey provides information on theuptake of various reward schemes. Theresults are broken down by sector andchart 3 shows that of the various rewardmechanisms listed none were used bymore than 40% of firms. Althoughemployee share schemes and profitsharing were used by roughly a third offirms, team bonuses were only used by afifth of manufacturers.The Survey also asks firms how effectivethey feel their reward package is on awhole host of criteria. Manufacturersfind their current reward schemes aremost effective at recruitment, retentionand rewarding staff fairly – a reflectionof firms’ priorities of retention andreward. Manufacturing firms see theircurrent reward systems as less suited tomotivating employees, improvingcompany performance, improving links toemployee performance and improvingproductivity. These aspects have a muchhigher priority in HPW and suggests thatmanufacturing still has some way to gobefore HPW is considered widespreadand effective. Current reward schemes inmanufacturing seem to reflect moretraditional priorities of retention andfairness, with considerable use of servicerelatedrewards still evident.Factors behind the limited take-upIf there are clear benefits fromintroducing HPW, it begs the question asto why more firms are not doing so. Avariety of different reasons can be putforward to explain the lack of take up.19
Maximising employee potential and business performance: the role of High Performance WorkingOther strategies are open to a firmwishing to enhance its profits in theshort-term – increased outsourcing, useof new technology to reduce staffinglevels, improved recruitment and trainingand mergers and acquisitions. Some ofthese options may be viewed as cheaperand better able to deliver results in theshort-term.System inertia has also been describedas a constraint on the spread of HPW.This refers to where well establishedorganisations experience a resistance tochange as organisational practice andculture become embedded. HPW can beeasier to introduce where a company issetting up a new establishment and hasa clean sheet because there is no priororganisation or tradition. Three reasonsare put forward for this inertia: firms getlocked into their initial choice ofpractices; firms experiment with changebut when it does not pay off abandon it;and the switch to HPW may also meanadopting new production anddistribution technologies that requireadditional costs.Mistrust between management andemployees can also make it difficult tointroduce HPW, for example, followingpast job cuts or where there have beenpoor industrial relations. Downsizing onits own does not necessarily preventHPW, particularly if management haveput in place measures to develop trust.Trade Unions are not seen as aconstraint on the introduction of HPWand can facilitate it where they areclosely involved in training policy andemployee involvement. There is alsoevidence at the European level thatWorks Councils and Unionrepresentatives can contribute tosuccessful change, although clearly this isnot the only way to bring about change.Chart 4What are the barriers to the introduction ofworkplace initiatives?% of respondents citing as a barrier...%50454035302520Attitudes to changeInsufficient timeLack of understandingCultural issuesWorkforce skillsCost of investmentSenior management skillsSupervisor skillsManagement attitude151050Source: EEF/NOP Surveyin Catching up with Uncle SamThere are costs to the introduction ofthese practices, not least in terms of timeand effort of the people involved. Therecould be additional costs from therequired increase in coordination and theacquisition of new skills. The design ofhigh-quality team based reward andrecognition systems is also difficult andcan be hard to implement. Teams alsoneed time to be able to absorb andinterpret new information and learn howto solve problems. There is also evidencethat HPW practices cannot beimplemented overnight, but that it takesconsiderable time and effort to get themproperly understood, operated andeffective.Attitudes to change are an importantconstraint according to EEF’s surveyevidence from Catching up with UncleSam. Chart 4 shows that the mostimportant constraint cited by firms onthe uptake of workplace initiatives is“attitudes to change”. This representsboth employee and employer attitudesand could reflect different issues indifferent firms, ranging from employeescepticism due to outcomes from pastchange, to employers’ lack ofunderstanding of the issues. Whateverthe cause of this inertia within firms theend product is the same – either a failureto implement HPW at all or with therequired intensity.20
Page 1 and 2: Maximising employee potentialand bu
Page 3 and 4: Maximising employee potential and b
Page 5: Maximising employee potential and b
Page 19: Maximising employee potential and b

About EEF - CIPD

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?