Consider High-Performance Work Systems and Virtual Teams

New technology causes changes in skill requirements and work roles and often results in redesigning
work structures (e.g., using work teams).151 High-performance work systems maximize the fit between
the company’s social system (employees) and its technical system.152 For example, computer-
integrated manufacturing uses robots and computers to automate the manufacturing process. The
computer allows the production of different products simply by reprogramming the computer. As a
result, laborer, material handler, operator/assembler, and maintenance jobs may be merged into one
position. Computer-integrated manufacturing requires employees to monitor equipment and
troubleshoot problems with Page 54sophisticated equipment, share information with other employees,
and understand the relationships between all components of the manufacturing process.153

LO 1-6 Discuss human resource management practices that support high-performance work systems.

Besides changing the way that products are built or services are provided within companies, technology
has allowed companies to form partnerships with one or more other companies. Virtual teams refer to
teams that are separated by time, geographic distance, culture, and/or organizational boundaries and
that rely almost exclusively on technology (e-mail, Internet, videoconferencing) to interact and complete
their projects. Virtual teams can be formed within one company whose facilities are scattered
throughout the country or the world. A company may also use virtual teams in partnerships with
suppliers or competitors to pull together the necessary talent to complete a project or speed the
delivery of a product to the marketplace. For example, Art & Logic software developers all work
remotely from across the United States and Canada from home offices, rented office space, or at a co-
working facility.154 Their clients represent a diverse set of industries, including education, aerospace,
music technology, consumer electronics, entertainment, and financial services. The project teams work
on the most unusual and difficult problems, which developers at other companies have failed to solve.
Art & Logic tries to accommodate the unique schedule and work-style requirements of its developers,
but its work is highly collaborative within project teams. Every project consists of at least a project
manager/developer and has a maximum of five to seven developers. Teams use Google Apps for
Business for sharing documents and communicating (both within the team and with clients).

Human resource management practices that support high-performance work systems are shown in
Table 1.14. The HRM practices involved include employee selection, work design, training,
compensation, and performance management. These practices are designed to give employees skills,
incentives, knowledge, and autonomy. Research studies suggest that high-performance work practices
are usually associated with increases in productivity and long-term financial performance.155 Research
also suggests that it is more effective to improve HRM practices as a whole, rather than focus on one or
two isolated practices (such as the pay system or selection system).156 There may be a best HRM
system, but whatever the company does, the practices must be aligned with each other and be
consistent with the system if they are to positively affect company performance.157 We will discuss this
alignment in more detail in Chapters 2 and 16.
Table 1.14

How HRM Practices Support High-Performance Work Systems

SOURCES: Based on K. Birdi, C. Clegy, M. Patterson, A. Robinson, C. Stride, T. Wall, and S. Wood, “The
Impact of Human Resource and Operational Management Practices on Company Productivity: A
Longitudinal Study,” Personnel Psychology 61 (2008), pp. 467–501; A. Zacharatos, J. Barling, and R.
Iverson, “High Performance Work Systems and Occupational Safety,” Journal of Applied Psychology 90
(2005), pp. 77–93; S. Way, “High Performance Work Systems and Intermediate Indicators of
Performance within the U.S. Small Business Sector,” Journal of Management 28 (2002), pp. 765–85; M.
A. Huselid, “The Impact of Human Resource Management Practices on Turnover, Productivity, and
Corporate Financial Performance,” Academy of Management Journal 38 (1995), pp. 635–72.

Employees often have responsibility for hiring and firing team members and can make decisions that
influence profits. As a result, employees must be trained in principles of employee selection, quality, and
customer service. They need to understand financial data so that they can see the link between their
performance and company performance.

In high-performance work systems, previously established boundaries between managers and

employees, employees and customers, employees and vendors, and the various functions within the
company are abandoned. Employees, managers, vendors, customers, and suppliers work together to
improve service and product quality and to create new products and services. Line employees are
trained in multiple jobs, communicate directly with suppliers and customers, and interact frequently
with engineers, quality experts, and employees from other functions.

Consider how HRM practices support high-performance work systems at both small and large
companies.158 HindlePower is a manufacturer of battery chargers. Most of HindlePower’s 75
employees work in the factory as assemblers. There is no time clock. Employees do not need to punch in
or out and there are no rules for time off. Employees don’t abuse the Page 55policy—hours in the
factory consistently reach 97% to 100% of full time. Hindle established a program called the Professional
Manufacturing Team, which pairs training with employee involvement in designing more efficient
processes. The training includes 25 to 30 courses customized for each production line. Employees are
responsible for completing all of the courses, and when they do they are designated as a manufacturing
professional. Employees are also involved in decisions that go beyond training. For example, employees
redesigned a production line resulting in an additional 150,000 units produced per week. At the Chrysler
Dundee Engine plant, hourly employees rotate jobs and shifts, giving the company greater flexibility and
employees more family time. The plant’s culture emphasizes problem solving and the philosophy that
anyone can do anything, anytime, anywhere. Every employee is either a team member or a team leader.
Job candidates have to make it through a difficult screening process that includes testing, evaluation of
how they perform in team activities, and interviews with managers and team leaders. Rotating jobs
helps keep employees motivated and reduces injuries. Team leaders and engineers are expected on the
shop floor as part of six-person teams. Large electronic screens hanging from the plant ceiling provide
alerts of machinery parts that are ending their lifespan and need to be replaced before they
malfunction. A performance management system, accessible on personal computers, alerts employees
to delays or breakdowns in productivity. Employees are empowered to fix problems—not just managers
or engineers.