5IVP Assignment Example
- August 1, 2021
- Posted by: Harry King
- Category: CIPD Level 5
Improving Organisational Performance
Your HR Director is to present a report to the executive team that puts forward a positive business case for introducing high performance working practices into the organisation. She has asked you to provide her with an evidence-based written brief.
You will need to make reference to academic research and literature in your brief. In the first section you should briefly address the concepts of HPW and HPWO and provide:
In the next section of your brief you should address performance management.
In the final section of your report you should give a summary of how to create and sustain a culture of HPW and:
Recommend some of the ways of building trust, enthusiasm and commitment
in support of a high-performance culture.
● Recommend some of the ways of building trust, enthusiasm and commitment
in support of a high-performance culture.
5IVP Assignment Example – Answered-
1.1 Introduction, Concepts and Proponents of HPW and HPWOs
High Performance Working (HPW) is a term that has gained traction in the recent past across different market and industrial settings in different parts of the world; from Japan’s strong economic growth to Europe’s business landscape, to the industrialized American economy and to the surging growth in China as an emerging economic power house in the Asia Pacific. The term “High Performance Working” is not new in the word of business management and generally connotes the aspect of managing organisations in a manner that encourages or stimulates more employee involvement and commitment to achieving improved performance (Prof. Steven Wood et al.,, 2013). Institutions practicing the HPW systems are considered High Performance Working Organisations (HPWOs).
In their work on “research and theory on high-performance work systems: progressing the high involvement stream”, (Boxall & Macky, 2009) logically defines High Performance Working (HPW) as a system of work practices in an organization that leads to superior organizational performance. However, in a quick rejoinder, they contest this generally perceived definition of HPW by successfully putting forward a valid argument. According to Boxall and Macky (2009), the above-given definition is deficient of sufficient evidence to signify the paths that are envisaged to lead to a superior individual, team or organisational performance and various organisations follow difference paths to achieving improved performance.
On the other hand, Garman and colleagues defined High Performance Work Practices/systems as practices that have been shown to improve an organisation’s capacity to effectively attract, select, hire, develop, and retain high-performing personnel (Garman A.N et al., 2015). Their work mainly focused on the subsystems that are mostly relevant for improving performance output in the healthcare sector. HPW best practices in the healthcare service providers should include but not limited to: engaging the staff, acquiring and developing talent, empowering the frontline workers, and aligning leaders who manage the healthcare service institution.
On a broader perspective other than expressed above in the context of healthcare service providers, effective and efficient HPWs should entail the following components. First, Trust: HPW thrives best in environments where the management trusts their employees. In a professional setting, firms tend to hire highly qualified employees who have received adequate training. These employees often expect to function within the organization with some level of autonomy. Therefore, the management must trust the employees’ professional discretion when it comes to handling tasks. According to (Antoinnette Weiber et al., 2016) including the employees in the decision-making processes enables them to provide inputs on how they can fully use their skill sets. This also make employees feel valued, and, thus, empowered to give their best efforts in whatever projects they are involved in.
Secondly, Communication is a critical component of HPW for managers. The management must be clear with what is expected of employees. When the goals of the organization are communicated effectively to the employees, then they can focus on how they can give their best efforts to the tasks assigned to them. The management can achieve this through regular meetings with the members of staff. They can also use a common messaging system such as an email system to pass messages to the employees about the various projects and their progress. The communication can be both symmetrical and asymmetrical so long as information flow is not distorted in the process. According to Tom Haak in an interview in the Smarp Blog post, having an effective international communication is important in keeping employee more engaged and it entails taking time to genuinely listen and respond to their concerns (Smarp, 2019).
Employee Involvement and Commitment are the other key components of High Performance Working Systems of management. Employees should be involved in all processes so that they can take an active role rather than be passive carrying out instructions which they did not contribute to. This empowers them to work better and it also helps the organization maximize on the skills of the employees. As Thomas Lee puts it, an actively involved employee tends to be more committed to the work and the organization than a passively involved employee. Thus, it is important to have the employees feel wholesomely engaged and feeling part and parcel of the organisation.
The other component of HPW is having an innovative systems driven by the modern
Technological advancements. Technology has simplified life and made processes faster. If an organization intends to benefit from HPW, then it must invest in systems that are innovative and can be used to increase the productivity of the employees. The time saved by these innovative systems will enable the organization to focus on other areas for improvement (Chang, 2015). Also, the employees will be less tired from work that could have exhausted them prior to the use of the innovative systems.
Finally, to achieve a High Power Working system, it is important to consider diversity of the employees and the management team. Having employees from a diverse and wider background brings numerous points of view on approaches to solving problems of the organization. Diversity is the cornerstone of development because it maximizes on the differences in an organization and provides an inclusive solution to problems. This component is increasingly important due to the effects of globalization and which has seen companies shift production units or open new production lines and franchises in different parts of the world. Thus is it vital to embrace intercultural and cross cultural understandings of the set of employees you might work with in different parts of the world.
1.2 The Link between HPW and Sustainable Organisation Performance, Competitive Advantage and Employee Wellbeing
HPW systems are associated with certain positive impact that they bring to both the employer and the employees in different organizations. Such advantages include: sustainable and improved organizational performance, enhanced employee wellbeing and increased competitive advantage of the organisation compared to competitors and other players in the given industry.
There is an increasing body of research pointing out that HPW systems have positive correlation with increased organizational performance. Proponents of HPW Systems theory argue that it streamlines organisational operations hence making organisations benefit from increased quality and productivity. It will streamline communication of the organizations mission and objectives to the employees and emphasizing the need to meet these objectives in the most cost-effective manner. That is, using minimal company resources to achieve the set objectives within the shortest time possible. For instance, HPW system will empower business development teams to drive business growth by meeting targets and on boarding new customer relations while using minimal company resources.
Since High Performance Working systems are aimed at achieving high performance culture, they tend to help organisations achieve improved productivity cost-effectiveness in their general outputs by focusing on “people” or the human resources as the competitive advantage. Previous studies have indicated that enhanced human resources systems such as incorporation of HPW practices in the Human Resources Management Systems (HRMS) have direct correlation with increase in firm’s market value and the probability of survival for new firms. This is because HPW imbues a culture of high productivity which is cascaded down to all employees, thus resulting into a HPWO in the long run.
Another study of HPW practices in Ireland found out that firms utilizing higher levels of HPW systems have lower rates of employee absenteeism and voluntary turnover along with higher labour productivity and lower labour costs (Guthrie et al. 2009). This is because HPW systems endow employees with greater skills, autonomy and sense of responsibility by being actively engaged in the organizations decision making, hence increased productivity. Thus, from the above-mentioned evidence, it can be deduced that HPW practices help organisations to leverage on human capital as the competitive advantage for realizing a sustainable organisation performance and a sustained culture of high performance cascaded down to all new employees.
Human resource skills and trained manpower are increasingly highly regarded to
Organisations a competitive advantage unlike in the past when natural resources, technology and economies of scale were the standards of measure (Guthrie, et al. 2009). Thus, HPW systems heavily relies on empowering employees and having them fully involved in the organisation such that they depict full commitment, positive attitude and job satisfaction. This enables organisations to minimize on employee turnover, maximize on outputs and increase efficiency and effectiveness in production which enables them save on time and operational costs or production. Hence, a competitive age against their competitors in the market.
High Power Working systems encourage complete involvement of the employees in the
Operations and importantly, decision-making aspects of the organisation. This increases employees’ commitment to the firm as they gain high self-esteem and confidence in their work, proactively act on behalf of the organisation while conscious of trust and faith that the management has in them to be productive. Flexible working systems, more friendly HR policies and fair reward systems based on performance appraisal, opportunity to collaborate and work in teams, clear communication by the management and between workers, increased autonomy and creativity are some of the HPW practices that bring greater job satisfaction to most employees in Europe.
Similarly, some scholars posit that high performance working systems are associated with increased employee’s satisfaction because it empowers them to have a voice in the organisation (Chamberlin , et al. 2018). According to social cognitive theory, giving employees voice in the organization positively affects their attitude towards work and hence improve their productivity, job satisfaction and general wellbeing (Chamberlin , et al. 2018).
Middle Management Stifle free communication flow
HPW systems thrive in set ups with clear cut communication channels between the management and the employees. However, middle managers who interlink the top management and the junior employees could be a stumbling block to a seamless communication flow. They do not want to get outshined by their junior colleagues thus they filter the information or communication channelled to the top management in a way that suit their selfish interests. Thus, there is a need to train the middle management in the organisation on effective ways of promoting clear cut communication from the top management to the lower cadre employees and vice versa. HPWOs should institute clear communication mechanisms and an open door policy where exchange of ideas is allowed but restricted to professionalism.
Neglect of the HR department
Human resources department should be at the centre stage effectively drive and implement HPW management approach. However, most organizations usually side-line the HR in restructuring and designing performance improvement mechanisms. The department tends to be isolated and left in the periphery of management, rather than integrated and being the centre stage for implementation of the HPW systems. For instance, an issue like a system upgrade in an organization would typically be focused around the department of IT and the affected department. Such a move isolates HR further and disengages them from tracking the various deliverables in such departments which make it difficult to implement HPW effectively.
HPW systems has high demands on employees to perform at optimum while driving sustained business growth and customer satisfaction. However, sometimes lack of proper systems of measuring the employees output derails the HR from having a clear way of appraising the employees. Thus, a need to have proper metrics for measuring employee performance so as to have objective performance appraisal and rewards commensurate to employees output (Chang 2015).
Critics of HPW have conducted studies which divergent opinions against the practice. They argue that intensive focus on productivity and performance brought about by HPW practices can have negative impact on employees’ wellbeing (Boxall & Macky 2009). For instance, since organisations seek to maximize profits in the most cost-effective way, HPW system can bring about pressure to meet the deliverables and set KPIs without being responsive to the socio-economic and psychological needs of the employees. Furthermore, critics of HPW systems of HR management argue that there is little correlation between HPW and labour efficiency measured as the output per dollar spent on labour. However, there overwhelming body of scientific research and data that point to the contrary, affirming the fact that HPW systems helps reduce labour costs and hence improve organisational efficiency and employees’ wellbeing.
Performance management cycle is derived from the performance management system which typically comprises of performance appraisal and employee development done by the Human resources department in an organisation. Performance management is quite challenging for the HR practitioners, citing various research and survey across the United States implicating employee dissatisfaction with the manner of their HR performance management systems and processes. Thus performance management is one of the most important tools for highly performing organisations. An effective performance management system for HRMS contains the following: clarifying job responsibilities and expectations, enhancing individual and group productivity, developing employee capabilities to their fullest extent through effective feedback and coaching, driving behaviour to align with the organization’s core values, goals and strategy, providing a basis for making operational human capital decisions (e.g., pay) and improving communication between employees and managers.
The pioneer model of performance management cycle was first defined by Peter Drucker in which he emphasized the aspect of management by objectives (MBO) (Vulpen 2020). This entailed four critical stages in performance management cycle. These are: Planning, Monitoring, Developing, Rating and Rewarding as shown in the below diagram from the Academy to Innovative Human Resources (AIHR).
Source: Academy to Innovative HR (2021)
The performance management cycle is an iterative process. It begins with Planning – setting out job description and expectations for the employees as is detailed in the KPIs; Monitoring – which entails tracking the set out objectives enshrined in the KPIs to see their implementation; Developing – entails constant review of the KPIs to see which ones are working out and which ones do not, so as to make necessary adjustments; Employee Rating and Rewarding – which are the last stages whereby employees are periodically appraised to gauge their performances against the set parameters or KPIs (Vulpen 2020).
Performance management process/ cycle is useful in determining the reward for
the employees, commensurate to their output or performance to the organisation. This is where periodical performance appraisals are done by the HR team, employees who meet and probably exceed expectations can have their targets revised upwards or get promotions with increased benefits, whereas those who fail to meet their KPIs can be recommended for trainings for improvement or termination of their contracts in the extreme instances or continuous poor performance. Thus, the performance management cycle is very critical for the HR department to determine the value add and productivity of employees in the HPW systems.
Usually, it the human resources department that deals with tracking employees training, development and appraisals in an organisation. However, in HPWOs, the performance management is deeply embedded in the organisation’s culture and there are clear systems on how various management leaders are either directly or indirectly involved (Guthrie et al. 2009). The line managers for instance, are the mostly useful in gauging the continuous performance of various employees working under them.
The line mangers are able to keep record of the output from their team members and should be the first point of contact with the employees during the performance review processes. Thus, the HR will usually rely on the line manager’s appraisals of individual employees to measure how effective they are coping up with the HPW system of operations in place. For the line manager to be effective in appraising their team members and help them improve productivity, there has to be a clear channel of communication in place whereby employees are informed about their KPIs and supported with the relevant technology and systems and some level of autonomy to perform (Smarp 2019).
2.3 How performance management promote challenges, build future people capacities and help recognize and reward talent
Performance management systems in HPWOs help managers recognize and reward talent and also promote challenges. During creation of the company’s strategic plan, the employees are usually involved so as to be part of the process and to deeply understand the strategic direction the organisation will take in future. For instance, in a bank setting, the management will involve all employees in the budget making process every end of a financial year. It is from the forecasted budgets that the employees KPIs for the coming financial year will be derived. Hence, it is more inclusive for the employees and they take ownership of the KPIs.
Due to the simplified performance appraisal process, it is easier for the HR and line managers to recognize the performing employees and reward them accordingly. Besides, it is easier for the HR and line managers to gauge which employees are performing below the expectations and recommend necessary trainings for discuss room for improvement (Roy 2021).
A challenge that might be recognized is the fact that the employee’s skill set is not as up to date as desired. Therefore, the firm can be involved in providing access to programs that offer training and development of skills to the employees. This step will go a long way in addressing inadequacies that the employees have (Withey & Gellatly 2017). The management will continuously identify areas if improvement and due to the open channels of communication and feedback mechanisms, the employees will also be empowered to highlight areas where they feel if addressed by the management, would enable them function at optimum. Thus, the organisation benefits by retaining a pool of skilled workforce overtime who are committed to the company’s mission and strategic objectives.
The process of performance management also creates opportunities for the management to create positive working relationships with the employees. The process of regularly sitting down with the employees to discuss their progress and how they are handling tasks is a good chance for easing tension.
A high-performance culture can best thrive in an environment where there exists trust, enthusiasm and commitment from the employees. These are the building blocks of organizational culture that creates an environment where employees feel free to explore their work environment and perform at their optimum using the most efficient and cost effective ways. In order to institute a deeply embedded culture of high performance in the spirit of HPW in a HPWO, the following methods can be used to build these above-mentioned values for a prosperous HPW system:
Reward: It is important that occasionally the management recognizes the hard work that the employees have put in during their performance period. With a proper performance management system in place, it is easier for the management and the HR to quantitatively and qualitatively determine which employees performed the best, and, therefore, merit reward (Chang 2015). To be more transparent and make employees involved in the deciding who among them demonstrated exemplary performance, the employees should be given an opportunity to nominate the most improved and those who have demonstrated consistency in higher performance output for the monthly, quarterly or annually awards.
The recognition not only acts as a motivating factor for the rewarded to put in more effort, but also to those who did not get rewarded to up their game and unleash their potential in terms of improving their performance. It works as a challenge to those who have not been rewarded to work harder so that they too can be recognized in the future. This is a sure way of promoting healthy competition and hence building enthusiasm among the employees. However, the reward does not necessarily have to be monetary in nature, rather they can be special recognitions or material awards that leave a lasting impression and motivates the employees to work even harder.
Trust: Unlike in the past when organisations tended to be more restrictive and authoritarian in how they handled their employees, modern high power working organisations embrace trust by giving the employees opportunity to utilize their existing technological infrastructure to create new innovative ways of doing things or suggest new forms of practices that can help improve the brand visibility (Antoinnette Weiber et al. 2016; Guthrie et al., 2009). Besides, the employees have ideas on how they can handle tasks that are assigned to them. Rather than force them to stick to one uniform method of approaching a problem, they should be given the creative freedom to pursue whatever course of action they believe is the best for the situation.
The employees’ ability to use their creativity will make them more committed to tasks since they will feel a level of personal responsibility for the tasks and they will want to see their efforts succeed both for their good (in terms of getting recognitions for promotion or reward) and the good of the organization (in terms of more productivity and profitability) (Antoinnette Weiber et al. 2016). Such an approach gives the employees the impression that they are trusted; which will be the actual case. Therefore, they will be more committed to the tasks that they are given. This helps cement the trust and build confidence and a sense of responsibility in the employee to act responsibly and take ownership of the processes since they are directly involved in the organisation.
Appealing Work Environment: The environment in which the employees work has a direct correlation with the employees output as shown in the study of Ministry of Religion in Indonesia (Zafar, et al. 2020). As people search for jobs where they enjoy working, the work space is a factor that is being given serious consideration by many candidates. People no longer favour traditional work spaces that had dull colours. People are looking for more vibrant environments. Having an appealing work environment helps build the enthusiasm of the employees as they strive to achieve company goals (Botes 2008). An appealing work environment transcends physical structure and office space, it expands to the positive relationship between the employees and their bosses and among themselves. This also borders on the organisational culture, clear feedback and open channels of communication, mutual respect and tolerance among the staff members (Roy 2021).
High Performance Training: in order to achieve a HPW culture, it’s logical that an organization must constantly provide high performance training to its employees. This allows them to improve their skills and be better equipped to handle tasks in their work environment. When the employees are well trained, they become more committed and enthusiastic about their personal contributions to the achievement of the organizational goals. HPWOs train by commitment as opposed to training focused on control-oriented management systems. Thus, such firms can offer this training to the employees or they can secure subsidies for training programs where the employees can advance their skills in institutions of learning. This move will improve employee enthusiasm since they will be better equipped to handle tasks at work and they will, thus, perform better.
Work-Life Balance: The management should prioritize the relaxation of the employees. It is important that the employees can get all the rest that they need before they get to work (Withey & Gellatly 2017). In the modern day fast-paced work environment where business climate is very competitive and organisations operate in highly competitive environments, employee, especially, in the HPWOs tend to experience substantial amount of job-related pressure. Thus, it is necessary to declutter the employee minds by giving them interlude of time-offs to relax and avoid work related burnout. This could be achieved by providing the employees with flexible working hours and paying for employee retreats where they can engage in team building activities. Well rested employees are enthusiastic employees (Caitlin, et al. 2019). They have the energy and time to dedicate to the jobs because their employers prioritize their rest. The rest could also include the HR and line managers ensuring all employees take time off from work for their annual leaves.
Based on prevailing discussion, there is compelling reason to believe that HPW systems is the future of sustainable management since human capital is the single most competitive advantage of modern organisations. As such, I persuade the management to allow the HR department to implement HPW practices as a way of transforming our organisation into a HPWO with strong performance culture sustainable into the distance future.
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