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Maximising employee potential and business performance: the role of High Performance WorkingMaximising employee potential andbusiness performance:the role of High Performance WorkingSummaryThe global and competitive nature ofmodern manufacturing has increased thedrive for higher productivity in the UK.While there are many facets to achievinghigher productivity, an important factorcan be ensuring that lessons are learntfrom pioneering companies and thatbest practice is applied across themanufacturing process. This brieffocuses particularly on a key aspect ofeffective human resources (HR) practice;High Performance Working (HPW). Itaims to illustrate what HPW entails andhow it can help to maximise thepotential of employees and improvecompany performance.If you are considering going down theHPW route, the key findings of theresearch on the topic (covered in themain sections of this brief) and theimplications for your company aresummarised below and form a set ofbroad guidelines. In particular, it helpsto identify for you what HPW involves,what drives its take-up, whether and howit improves company performance, whythe take-up has been limited and how togo about introducing HPW.What is High PerformanceWorking?• While HPW clearly involves using HRpractices and policies to boostcompany performance, there is not adefinitive list of practices that itinvolves. However, HPW practicestend to focus on employee autonomyand involvement in decision making,support for employee performance,rewards for performance and thesharing of knowledge andinformation. Part of HPW’s strengthderives from its flexibility toincorporate different practices tomeet the varying needs of individualorganisations. The specific types ofpractices that HPW can involve are:- appropriate selection and recruitmentprocesses;- comprehensive inductionprogrammes;- sophisticated and wide coverage oftraining;- coherent performance managementsystems with wide coverage;- flexibility of workforce skills;- job variety and responsibility;- teamworking;- frequent and comprehensivecommunication to employees;- use of quality improvement teams;- harmonised terms and conditions;- market competitive pay;- use of rewards related to individualand/or group performance; and- policies to achieve an appropriatework-life balance.• Although there is no definitive list ofpractices, existing research shows thatthe practices that make up HPW tendto have four dimensions:- employee autonomy and involvementin decision making;- support for employee performance;- rewards for performance; and- the sharing of information andknowledge.What drives the take-up ofHPW?• The driving forces for firmsintroducing HPW have tended to be‘problems in the market’, competitionor foreign ownership. However, thebenefits can be captured by any firmin any circumstances and HPW shouldbe viewed as a route to improvedperformance for your company. Thechallenge now is to ensure3
Maximising employee potential and business performance: the role of High Performance Workingwidespread take-up of HPW as amethod for improving performancefor companies in all types ofcircumstances. Case Study 1 (page 8)shows how INA Bearing CompanyLimited has used HPW to meet thechallenge from increased competitionfrom Eastern Europe.Does HPW improvebusiness performance?• The majority of evidence suggeststhat HPW can improve theperformance of your organisation. Asignificant body of research haslooked into the link between HPW andcompany performance both withinmanufacturing and in other sectors.Research from the US and EEF’s andCIPD’s own findings show thatcompanies that use HPW tend to havehigher productivity.• Some of the more striking findings formanufacturing come from a CIPDstudy by the Institute of WorkPsychology at Sheffield University. Itshows that in a sample of 100manufacturing companies based inthe UK, HPW practices accounted foraround a fifth of the variation inprofitability and productivity betweenfirms. In addition, studies across theglobe have shown that investment inthese practices and the skillsassociated with them impacts on thebottom line.• There is an opportunity to learn fromthe experience of the UK aerospacesector. HPW has slowly but steadilydiffused through the UK aerospaceindustry and there is evidence of aclear link between HPW and sales andvalue-added per employee.Aerospace firms with a greaternumber of HPW practices also hadmore lean production systems in placeand a higher training spend. If youare looking to maximise productivitygains for your organisation, a potentcocktail is the combined use of HPW,lean manufacturing and training.• The introduction of HPW can bringbenefits for your employees in termsof increased job satisfaction andmotivation. The environment of trustand intrinsic rewards that HPWcreates also brings higherorganisational commitment, as wellas increased job satisfaction. Wheresuch practices lead to higherproductivity and higher skills levelsthey can also generate higherearnings for employees.How does HPW improveperformance?• A major study for the CIPD, carriedout by researchers at Bath University,has been pioneering in itsexamination of the process by whichHPW leads to improved companyperformance – looking ‘inside theblack box’. Its findings are critical ifyou intend to implement HPWsuccessfully and maximise its benefits.The main points to bear in mind are:- Managing performance throughpeople means finding ways to induceor encourage employees to contributemore effectively by triggeringdiscretionary behaviour that makesthe difference in a job being donewell. This happens when people findtheir job satisfying, they feelmotivated and they are committed totheir employer.- The most successful organisationswith higher than average levels oforganisational commitment andperformance are those with a clearvision and a set of integrated values –encapsulated by a ‘Big Idea’.- HR policies and practices must fitwith and be tailored to the businessstrategy, while at the same time beingflexible enough to help organisationsadapt to changing circumstances.Enduring values play an importantpart in achieving this.- In some cases, lower levels ofcommitment are explained more bydissatisfaction with the way policiesand practices are implemented andput into action, rather than the lack ofa particular policy.- Implementing and enacting policiesis the task of line managers and theirrole is therefore critical.4
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