High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience

and Shaw: Innovative Human Resource Practices Colvin and Keefe: High Commitment Human Resource Practices and Fang: High Involvement Human Resource Practices 
Verma Batt, Inchniowski

High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience 
Production

problem solving teams that maximize horizontal information flows Job rotation to build flexibility, team communication Careful screening of workers down the job ladder to identify team skills Job security used to build incentives to invest in firm·s future Training in problem solving, team skills Incentive pay 
Ichniowski

and Shaw (2003)

High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience
Compare to Traditional Human Resource Practices Wage and salary only loosely tied to performance Narrowly defined jobs Limited screening for nonmanagerial jobs Tight supervision Little training Layoffs in slack times Osterman (2000) reports that between 1992-1997 1992Proportion

using at least one HP-HR practice rose from 65% to 85% HPProportion using multiple HP-HR rose from 38% to 71% HP-

High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience Group pay incentives have free rider problems Use smaller groups to foster peer pressure. mutual monitoring Train on workplace norms Combine with stronger screen on team work at hiring =>Multiple HP-HR methods make incentive HPpay more successful .

Requires =>Multiple HP-HR methods make HPdecentralized decision-making more successful decision- . or workers may fear job loss from suggestions Flexibility in job assignments makes commitment to job security more credible. Commitment to training makes commitment to job security more credible.High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience Fostering worker ideas to raise productivity job security.

High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience When employees are expected to multitask combination of fixed compensation for routine tasks More complex compensation for innovatrive activities Requires =>Multiple HP-HR methods make multiHPmultitasking more successful .

2% higher High communication: labor productivity 1.4% higher Reference is traditional HR Note: Individual HR practices had no effect in isolation³ isolation³only in combination Does this mean profits higher with innovative HR? .7% higher High teamwork: labor productivity 3.High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience Ichniowski. Examine Shaw and Prennushi (1997) American American Economic Review use of alternative HR practices in the steel industry Innovative HR system: labor productivity 6.

Higher returns from HP-HR also HPfound in Nonluxury auto assembly Apparel manufacturing Metalworking and machine shops Customer service in communications Scientists in Pharmaceuticals BUT³not BUT³ all studies find positives If positives not realized.High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience Ichniowski and Shaw (2003) review evidence from several studies. companies change practices³ practices³selection These are not plug-in solutions plug- .

quality Enhance accountability Prevalence in new plants makes it difficult to disentangle HP-HR effects from other technologies HP- .High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience Where are innovative HR practices more common? complex production processes (more scope for returns) New or newly reopened plants (more costly to convert ongoing operations) May be complementary with information technologies Trace More sales back to team Track efficiency.

GM plant built in Fremont CA.High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience NUMMI: New United Motor Manufacturing. Inc. 1962 High absenteeism Poor quality Closed in 1982 .

? . decentralized decision-making. «) decisionConsidered one of the most productive automobile plants in the U. new management.S. HPshock of plant closing. new production methods. «. job flexibility. Reopened in 1983: joint Toyota-GM venture Toyota85% of former workers HPHP-HR practices (teams. Inc. (my Toyota) Is it HP-HR. training.High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience NUMMI: New United Motor Manufacturing.

workers Interact with more workers.High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience Do workers work differently in innovative HR plants? of workers³whom do you communicate or workers³ interact with? In Surveys innovative HR plants. managers on other lines Broadened communication links appear to be a major feature of HP-HR plants HP- . managers on their own line Interact with more workers.

lessens turnover Are teams another voice mechanism? they lower turnover? Do .HPHP-HR Practices with Unions Role of unions in productivity Shock Exit-Voice ExitUnion Tradeoff representation allows worker dissatisfaction to be addressed.

and Quit Rates: Evidence from the Telecommunications Industry. Colvin and Jeffrey Keefe. 573Grievance mechanism (good sign) vs. Human Resource Practices. Grievance use (bad sign) Endogenous? Alternative HR practices: Reengineering vs. Rosemary.µ Industrial and Labor Relations Review 55 (July 2002): 573-594. HP-HR HP- .Batt. Alexander J. ´Employee Voice. S.

and Quit Rates: Evidence from the Telecommunications Industry.Batt. ´Employee Voice. S. Colvin and Jeffrey Keefe. Rosemary. 573- VOICE: presence VOICE: rate + HP-HR + QUITS Reengineering .µ Industrial and Labor Relations Review 55 (July 2002): 573-594. Human Resource Practices. Alexander J.

´Employee Voice.µ Industrial and Labor Relations Review 55 (July 2002): 573-594. and Quit Rates: Evidence from the Telecommunications Industry. Rosemary. S. Colvin and Jeffrey Keefe. 573Table 2: Relationship between Union and use of HR mechanisms less likely to have HP-HR system HPMore likely to have grievance procedure More likely to use grievance procedure Unions Table 3: Empirical Model of Quits HP-HR HP- lowers quit rate Union lowers quit rate even more Pay lowers quit rate Reengineering raises quit rate Table 4: Grievance rate does not significantly affect quits .Batt. Human Resource Practices. Alexander J.

Table 2: HPHP-HR raises pace of both product and process innovations Unions do not alter pace of innovations . (2003):189198.Verma. ´Workplace Innovation and Union Status: Synergy or Strife?µ IRRA 55th Annual Proceedings. (2003):189Proceedings. Anil and Tony Fang.

´The Impact of Co-Management on Quality CoPerformance: The Case of the Saturn Corporation. 197- Do unions enhance or limit HP-HR implementation? HPBecause unions foster communication among workers.µ Industrial and Labor Relations Review 53 (January 2000): 197-218. they may foster implementation of HP-HR programs HP- .Rubinstein. Saul A.

Rubinstein.µ Industrial and Labor Relations Review 53 (January 2000): 197-218. 197- Union Leadership Union Membership Off-line Labor Management Committees (Decision Rings) Problem Solving Teams (Problem Resolution Circles) On-line Partnering: (Operating and Middle Management) Self-Directed Work Teams . ´The Impact of Co-Management on Quality CoPerformance: The Case of the Saturn Corporation. Saul A.

500 employees in about 700 Work teams Teams organized into departments of ~100 employees each Each department has two advisors. Saul A.µ Industrial and Labor Relations Review 53 (January 2000): 197-218.Rubinstein. one from union and one from management 1. 197- Implementation at Saturn New plant: Prior agreement to set up HP-HR between HPUAW and GM 5.100 union members have some sort of leadership responsibility . ´The Impact of Co-Management on Quality CoPerformance: The Case of the Saturn Corporation.

´The Impact of Co-Management on Quality CoPerformance: The Case of the Saturn Corporation. are horizontal and vertical information flows enhanced? With . department to corporate 20% of union members in some form of leadership position. Saul A.Rubinstein.µ Industrial and Labor Relations Review 53 (January 2000): 197-218. 197- Implementation at Saturn Assignments All decisions by consensus Union is a full partner in all business decisions Joint management at al levels.

´The Impact of Co-Management on Quality CoPerformance: The Case of the Saturn Corporation.µ Industrial and Labor Relations Review 53 (January 2000): 197-218. 3. coordination and problemproblem-solving Quality enhanced when there is a balance between people and production management Quality enhanced when union and nonunion managers share common goals . Information flows will differ between union and nonunion managers Quality will be improved in union managed sectors due to improved communication. Saul A. 2.Rubinstein. 197- Hypotheses 1. 4.

coordination and problem-solving problemQuality enhanced when there is a balance between people and production management (time use survey of managers) Quality enhanced when union and nonunion managers work more closely (degree of agreement on goals between advisors) . Saul A. 197Hypotheses 1. ´The Impact of Co-Management on Quality CoPerformance: The Case of the Saturn Corporation.µ Industrial and Labor Relations Review 53 (January 2000): 197-218. 2.Rubinstein. 4. Information flows will differ between union and nonunion managers (data on communications network) Quality will be improved in union managed sectors due to improved communication. 3.

Nonunion advisors spent more time on production problems Better performing units devoted considerably more time to quality issues vs other issues .µ Industrial and Labor Relations Review 53 (January 2000): 197-218. Information flows will differ between union and nonunion managers Figure 2: Union advisors had denser communication networks Union advisors spent more time on people problems.Rubinstein. ´The Impact of Co-Management on Quality CoPerformance: The Case of the Saturn Corporation. Saul A. 197Hypotheses 1.

Saul A. less so to initial quality level . ´The Impact of Co-Management on Quality CoPerformance: The Case of the Saturn Corporation. 197- Hypotheses 2-4 2Table 4: Note small sample size! Balance is ratio of time spent managing production vs people.5? Alignment.Rubinstein. union communications are tied to improved quality.µ Industrial and Labor Relations Review 53 (January 2000): 197-218. Measure reflects closeness to 0.

195In defense of traditional HR«. ´How Industrial Relations Affects Plant Performance: The Case of Commercial Aircraft Manufacturing.µ Industrial and Labor Relations Review 55 (January 2002): 195-218. Pilarski. Jonathan S Leonard..Kleiner. redesigned in 1980 Inverse productivity measure: Actual relative to planned hours per plane . and Adam M. Morris M. Large airplane manufacturer LongLong-time traditional (adversarial and sometimes militant) relationship between union and firm Monthly data 1974-1991 follow the producton of a new line of 1974commercial aircraft.

. Jonathan S Leonard.Kleiner.µ Industrial and Labor Relations Review 55 (January 2002): 195-218. and Adam M. 195- Over the period (Figure 1) 3 strikes Work-toWork-to-rule slow down 6 union presidents 1-3 moderate 4 most militant. ´How Industrial Relations Affects Plant Performance: The Case of Commercial Aircraft Manufacturing. ended TQM . Morris M. Pilarski. drives union into receivership 5 promised to work closely with management 6 promised to end Total Quality Management (TQM) 4 CEOs 1: traditional adversarial relationship with labor 2: Quality circles 3: TQM 4: Return to tight management.

8 million $14 million $21 million  No gain from TQM.µ Industrial and Labor Relations Review 55 (January 2002): 195-218. 195- Table 2:  Concerted actions cost productivity   Takes 1-4 months to return production to normal 1Costs in lost production     Strike 1: Strike 2: Strike 3: Work-toWork-to-Rule: $2. ´How Industrial Relations Affects Plant Performance: The Case of Commercial Aircraft Manufacturing. and Adam M. quality circles  Although labor productivity had started to rise by the end of the TQM period . Morris M.Kleiner. Pilarski.. Jonathan S Leonard.7 million $0.

µ Industrial and Labor Relations Review 55 (January 2002): 195-218..Kleiner. and Adam M. ´How Industrial Relations Affects Plant Performance: The Case of Commercial Aircraft Manufacturing. Morris M. 195- Why the lack of return to HP-HR? HP    Ongoing plant³transaction costs for change plant³ Initial implementation may lead to productivity losses FirstFirst-line supervisors feared loss of jobs Some in the union saw TQM as a sell-out to sellmanagement . Jonathan S Leonard. Pilarski.

High Performance Human Resource (HP-HR) (HPPractices: 20 years of experience are innovative HR practices more common? Where More complex production processes (more scope for returns) or newly reopened plants (more costly to convert ongoing operations) New May be complementary with information technologies .

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