In Colloboration with

6518YPCBSC
STRATEGIC HRM
Lecture 7:
High Performance Working (HPW)
Learning Outcomes
By the end of this session, you should be able to:
❑ Analyse the principles and role of High Performance Working
systems in the workplace.
❑ Review ‘bundles’ of HRM best practices.
❑ Discuss the role of leaders in effective HPW.
❑ Discuss the value of strategic reward system.
❑ Role of HR in adding value.
Setting the scene……

▪ In a volatile and uncertain labour market, people

are an organisation’s most valuable asset.
▪ The world of work and workers continues to be
challenging on all levels and therefore there
has never been a more critical time for
leadership to unleash the potential of its
workforce.
▪ Leaders who put people as their first priority in
executive level conversations and decision-making
will drive genuine performance culture.

Driving Performance & Productivity – CIPD (2018)

High Performance Working (HPW)
❑ ‘High Performance Working is a general approach to managing organisations that
aims to stimulate more effective employee involvement and commitment to achieve
high levels of performance’ (Belt and Giles 2009).

❑ High performance working is simply a series of practices, policies and

processes which can be put into place, and when working harmoniously can
result in improved performance of employees.

❑ It is widely recognised that high performance working practices

fall into three areas:
1. High employee involvement
2. Compensation and Reward
3. HR practices
 ▪ Sharing of information
• leads to better cooperation in effecting major organisational
1. High employee involvement changes.
• Employees feel more committed to new courses of action if they
have adequate information from the management.

▪ Knowledge Development
• Selecting the best and brightest candidates available in the labour
market.
• Providing opportunities to all the employees to sharpen their
Empowering knowledge continuously.
employees in
HPWS give them ▪ Performance and reward links
more control and • It has been found that when rewards are connected to
performance, employees pursue outcomes that are mutually
influence over
beneficial to themselves and the organisation.
decision-making.
▪ Egalitarianism
• In HPWS, conflicts among managers, employees and trade
unions are increasingly being replaced by more cooperation
approaches to managing work. Present day employees feel that
they are a part and parcel of the organisation, not just workers.
• In an egalitarian environment where everyone is treated alike,
(Preuss, 2003). status and power differences are eliminated - the doctrine that all
people are equal and deserve equal rights and opportunities
1. High employee involvement (cont…)

High Performance Working Systems

(HPWS)
‘High-Performance Work Systems’ are defined as ‘a set, or bundle, of human resource management practices
related to selection, training, performance management, compensation, and information sharing that are
designed to attract, retrain, and motivate employees’ (Messersmith and Guthrie 2010, p.242).

‘High-Performance Work Systems’ (HPWS) that aim to improve performance through consistent policies
across the organisation that promote high commitment and job satisfaction
(Baird et al 2003, Dul et al 2011, Guest 2011).

Human Resource Practices need to be consistent with organisational culture (Hartog and Verburg 2004),
communicated transparently and effectively across the organisation (Pfeffer 1998).
1. High employee involvement (cont…)

High Performance Working (Pfeffer,1998)

7 bundles of ‘best practice’

1. Employment security
❑ When these best practices
2. Selective hiring
are combined we call them
‘bundles’. Bundles create 3. Self-managed teams and decentralization
synergies. of decision making
4. High reward contingent on performance
❑ This is how HRM can create a 5. Training
competitive advantage for
the organisation. 6. Reduction in status differences
7. Sharing information
1. High employee involvement (cont…)

HPWP’s and the AMO model

(Appelbaum et al., 2000; Boxall & Purcell, 2003)

Engagement
AMO model explains
the link between
human resource
management and
performance and
employee's
discretionary effort.

AMO-Model (Appelbaum et al., 2000)

1. High employee involvement (cont…)

Leadership, Motivation and HPW – (Process theories)

Fredrick Taylor Elton Mayo (1928) – Douglas McGregor Frederick
(1911) – Scientific Hawthorn experiments (1960) – Theory X Herzberg (1959) –
management (Humanistic management) and theory Y two factor theory

https://www.youtube.com/ https://www.youtube.co https://www.youtube.com

watch?v=jRMO43s5NGY m/watch?v=fS5iqEf1Azs /watch?v=f_qyDfZYfXQ
1. High employee involvement (cont…)

Vroom (1964) Expectancy Theory: Process of Model of Motivation

https://www.youtube.com/watch?v=WDgF7Avijlc

❑ Expectancy is the individual’s belief that effort will lead to the intended performance goals.
▪ Expectancy describes the person’s belief that “I can do this.”
▪ Usually, this belief is based on an individual’s past experience, self-confidence, and the perceived difficulty of the performance standard or goal.
▪ Factors associated with the individual’s expectancy perception are competence, goal difficulty, and control.

❑ Instrumentality is the belief that a person will receive a desired outcome if the performance expectation is met.
▪ Instrumentality reflects the person’s belief that, “If I accomplish this, I will get that.” The desired outcome may come in the form of a pay
increase, promotion, recognition, or sense of accomplishment.
▪ Having clear policies in place—preferably spelled out in a contract—guarantees that the reward will be delivered if the agreed-upon performance
is met.
▪ Instrumentality is low when the outcome is vague or uncertain, or if the outcome is the same for all possible levels of performance.

❑ Valence is the unique value an individual places on a particular outcome.

▪ Valence captures the fact that “I find this particular outcome desirable because I’m me.”
▪ Factors associated with the individual’s valence are needs, goals, preferences, values, sources of motivation, and the strength of an
individual’s preference for a particular outcome.
▪ An outcome that one employee finds motivating and desirable—such as a bonus or pay raise—may not be motivating and desirable to another
(who may, for example, prefer greater recognition or more flexible working hours).
1. High employee involvement (cont…)

Leadership, Motivation and HPW – (Content theories)

❑ David McClelland's (1961) - three motivational needs

are:
▪ the need for achievement (nAch)
▪ the need for power (nPow)
▪ the need for affiliation (nAff)
❑ McClelland gave us one of the best-researched
models for workplace motivation – which is pretty
reliable at predicting job satisfaction. But any job can
be framed and adjusted.

❑ If you know the needs of your team – and you should

be able to get to know them that well, as their manager
– then you can use it to ensure all are motivated
effectively.
2. Compensation and Reward

Reward
❑ Strategic reward - is based on the design and implementation of reward policies and practices
that support and advance both the organisation’s business and people objectives and employee
aspirations.

❑ Total reward - covers all aspects of work that are valued by people, including elements such as
development opportunities and/or flexible working, in addition to the wider pay and benefits
package.
Total reward has implications for cultural change as it can focus in part on employee
empowerment.

❑ Links between strategic and total reward - total reward may form part of a strategic approach
to reward for many employers.
For example, an organisation might adopt a total reward approach, providing cutting edge
learning programmes together with flexible working options, as well as more traditional aspects
of pay and benefits, to recruit, retain and engage the staff it needs to secure its business
objectives.
2. Compensation and Reward (cont..)

Total Rewards
Total reward may include some, or all, of the following elements as well as traditional
elements of pay and benefits packages:
(See our Canvas page for an example of a total rewards statement (TRS))

✓ Flexible benefits.
✓ Access to professional and career development.
✓ Meaningful work.
✓ Freedom and autonomy.
✓ Opportunity for personal growth.
✓ Recognition of achievements.
✓ Preferred office space or equipment.
✓ Able to raise matters of concern.
✓ Involvement in decisions that affect the way work is done.
✓ Flexible working options, including homeworking.
✓ Administrative support.
2. Compensation and Reward (cont..)

Characteristics of Strategic Reward and Total Rewards

CIPD 2019
1. Holistic: it focuses on how employers attract, 5. People-centred: it recognises that people are a
retain and engage people to contribute to key source of sustainable competitive advantage
organisational success using a mix of cash and non- and begins by focusing on what they value in the
financial rewards. total work environment.

2. Best fit: it adopts a contingency approach – total 6. Customised: it identifies a flexible mix of rewards
reward programmes need to be tailored to the that offers choice and is better designed to meet
organisation's own culture, structure, work employees' needs, their lifestyle and career stage.
process and business objectives.

3. Integrative: it delivers innovative rewards that are 7. Distinctive: it uses a complex and diverse set of
integrated with other people management policies and rewards to create a powerful and unique employer
practices, such as performance management. brand that serves to differentiate the organisation
from its rivals.
4. Strategic: it aligns all aspects of reward to business
strategy – total reward is driven by business needs and 8. Evolutionary: it's a long-term approach
rewards the business activities, employee behaviour and based on incremental rather than on radical
values that support strategic goals and objectives. change.
3. HR practices

How HR practitioners can add value

Human Resource Departments add value to a business by ensuring:-
❑ How do the processes such as staffing, hiring, communication, and compensation; that govern
how work is done, enhance organizational competitiveness, and add value?
❑ Ensure recruiting the right calibre and grade of existing and new employees by determining job
descriptions, people profiles and skills criteria to match job role.
❑ Ensure HR policies and procedures are followed consistently by all departments within a
company.
❑ Ensure who is responsible for Human Resources work? To what extent do managers view
themselves as HR managers as well as Operational managers?
❑ ƒEnsure when and how should Human Resources be proactive, reactive, or anticipatory?
3. HR practices (cont…)

Measuring HR Effectiveness – The HR

Based upon the work of Kaplan and Norton (1996) and has
Score-Card Approach strong links to HR Accounting.
The Financial Perspective
▪ Financial measures related to HRM might include: cost per hire,
cost of turnover, cost per head of training, legal costs related to
HRM, HRM expenditures as a percentage of overall operating
budget . . .

The Internal Business Process Perspective

▪ HRM specific measures might be associated with: how work is
structured in terms of team and team working, the reward
system which compensates and motivates . . .

The Learning and Growth Perspective

▪ Organizational learning comes from three potential sources:
people, systems, and organizational procedures.

The Customer Perspective

▪ It is important to consider external as well as internal clients as
Rees and Smith, Strategic Human Resource Management: An customers. Identifying the customer helps HR focus upon how it can
international perspective, 2e SAGE Publishing, 2017 facilitate and support the service providers (to its customers).
3. HR practices (cont…)

CIPD Profession Map –

Culture and behaviour Understanding people's behaviour and
creating the right organisation culture.

This area of the Profession Map encompasses the knowledge needed to understand how organisations and
people behave, and includes elements such as:

❑ How different leadership and people practices, along with ethical perspectives, impact on behaviour and
culture.

❑ How giving people a meaningful voice enables people professionals to influence behaviour, unlock
potential and shape organisational culture.

❑ How to enable high levels of people engagement and promote learning, and use the right approaches
in different situations for individuals and teams.

❑ How to develop resilience within the organisation. Culture and behaviour | CIPD Profession Map
How do organisations get a HPW culture?

Below are six practices to introduce HPW practices into a business:

• Empowering employees by giving them autonomy over how they work and plan their day.
• Ensuring clear frameworks and policies for all people management processes which are transparent and
all employees know what expected of them. Managers know how to manage and apply policies to ensure
fairness and consistency.
• Transparent and open communication led from the top. For example, putting out regular communications,
using various channels, that detail organisational changes and the insights behind them, so employees feel
informed, consulted, and involved.
• A recognition and reward culture that appreciates those hard-working employees.
• Promoting physical and mental health and wellbeing, such as group workout sessions, puzzle games by
printers and my favourite one is to have a “bring your dog to work policy.”
• Personalised learning and development- Giving all employees the opportunities to learn new skills and
enhance the skills they already have tailored to individual learning styles.
 References
• Appelbaum, E., Bailey, T., Berg, P. & Kalleberg, A. (2000). Manufacturing advantage: Why high performance work systems pay off. New York:
Cornell University Press. Arnold, J., Silvester, J., Patterson, F., Robertson, I., Cooper, C. & Burnes, B. (2010). Work psychology. Understanding
human behaviour in the workplace. 4th Edition. Harlow: Prentice Hall.
• Armstrong, M. (2019) Armstrong's handbook of reward management practice: improving performance though reward. 6th ed. London: Kogan
Page.
• Armstrong, M. (2020) Armstrong's handbook of strategic human resource management. 7th ed. London: Kogan Page.
• Atkinson, S.R. and Moffat, J. (2005) The agile organization. Chicago: CCRP Publication Series.
• Farnham, D. (2015) Human resource management in context. 4th ed. London: Chartered Institute of Personnel and Development.
• Guest, D.E. (2011) Human resource management and performance: still searching for some answers. Human Resource Management Journal,
21(1), 3–13.
• Hamel, G. and Prahalad, C.K. (1990) The core competence of the corporation. Harvard Business Review, 68(3), 79–91.
• Hartog, D.N. and Verburg, R.M. (2004) High performance work systems, organisational culture
• and firm effectiveness. Human Resource Management Journal, 14(1), 55–78.
• Kew, J. and Stredwick, J. (2016) Human resource management in a business context. 3rd ed. London: Chartered Institute of Personnel and
Development.
• Messersmith, J.G. and Guthrie, J.P. (2010) High performance work systems in emergent organizations: Implications for firm performance. Human
Resource Management, 49(2), 241– 64
• Pfeffer, J. (1998) The human equation: building profits by putting people first. Boston: Harvard Business School Press.