Performance

1
Part 3

• Performance

2
Performance
Slide 10.1

• There has been a shift away from the contract of
  employment towards the contract for performance
• Getting the most out of the workforce is a
  predominant management preoccupation
• Managing and developing people has perhaps the
  most powerful effect on overall performance
  (Caulkin, 2001)

3
Influence of Trade Unions (1 of 2)
Slide 10.2

Traditional HRM approach centred on assessment
of past performance reward Trade unions sought
to improve terms and conditions of their members
in exchange for better productivity Performance
became stereotyped as no intrinsic interest to
the person doing the work
4
Influence of Trade Unions (2 of 2)
Slide 10.3

Change in influence of trade unions Collective
bargaining no longer dominates the management
agenda as it once did Now scope for integration
in a way that was once unrealistic Can now say
performance is a reward
5
The Japanese Influence
Slide 10.4

• Japanese personnel policies described as
• Performance
• Motivation
• Flexibility
• Mobility

6
J Organisations
Slide 10.5

• Characterised by
• Commitment
• Effort
• Company loyalty
• (Delbridge Turnbull, 1992)

7
Adopting Japanese Techniques in the UK
Slide 10.6

Many Japanese management techniques adopted,
example JIT Only appear to succeed when
initiatives techniques are developed and
modified for their location
8
Peters Waterman an American Perspective
Slide 10.7

• American excellence school characteristics
• A bias for action
• Being close to the customer
• Autonomy entrepreneurship
• Productivity through people
• Hands on and value driven
• Stick to the knitting
• Simple form, lean staff
• Simultaneous loose and tight properties

9
Shift in Perspective in the Peters Waterman
approach
Slide 10.8

From strategy and structural factors (hard)
to Style, systems, staff, and skills
(soft)
10
Peters Austins Factors for Excellence
Slide 10.9

• Concern for customers
• Innovation
• Attention to people
• Leadership

11
Problems With the American Research Methodology
Slide 10.10

• No comparison made with companies not considered
  excellent
• So were principles applied to greater extent in
  excellent companies?
• Excellent companies in research have since
  experienced severe problems
• Extent of application to UK organisations

12
Impact of American Research
Slide 10.11

• Influence on strategic thinking about performance
  profound
• Emphasis away from objective terms
  (profitability, effectiveness, value added, etc)
• Move towards generating feelings of enthusiasm
  and achievement
• UK seeking to determine high commitment work
  practices

13
HRM Strategy Literature
Slide 10.12

1. Universalist certain HR policies practices
   will result in high performance
2. Contingency different HR policies practices
   needed to produce high performance depending on
   business strategy and environment
3. Resource based organisational members are
   unique so practices and policies are unique to
   each company

14
Different Definitions of Performance
Slide 10.13

Bottom line financial performance
profitability Through productivity
measures Measurement of outcomes, e.g. wastage,
quality of labour turnover
15
The Bundles Approach
Slide 10.14

• The performance effects of HR policies and
  practices are multiplicative
• Highlights emphasis on internal fit

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Seven Critical People Management Policies
Slide 10.15

• Emphasising employment security
• Recruiting the right people
• Extensive use of self managed teams
  decentralisation
• High wages linked to organisational performance
• High spending on training
• Reducing status differentials
• Sharing information
• (Pfeffer, 1998)

17
Sheffield Enterprise Programme Identified
Factors
Slide 10.16

• Culture
• Supervisory support
• Concern for employee welfare
• Employee responsibility
• Training
• (Patterson et al, 1997)

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Which People Management Policies Create High
Performance in Different Circumstances?
Slide 10.17

Guest, 2001 High performance work practices
may be effective in manufacturing rather than
services
19
Focus on the Resource Based View
Slide 10.18

• Each organisation is unique and complex
• Need to look beyond HR policies and practices
• Need to consider long term performance capability
• Move to longitudinal studies can be useful
• Organisational context and institutional
  arrangements need more attention

20
Characteristics of Big Ideas in High Performing
Organisations
Slide 10.19

• Embedded
• Connected
• Enduring
• Collective
• Measured managed

21
Commitment
Slide 10.20

• Attitudinal commitment
• Behavioural commitment

22
Value of Commitment
Slide 10.21

• Thought to result in
• Better quality
• Lower turnover
• Greater capacity for innovation
• More flexible employees
• (Walton, 1985)

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Measuring Outcomes of Commitment
Slide 10.22

• Industrial relations climate
• Absence levels
• Turnover levels
• Individual performance
• (Mabey Robertson, 1990)

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Simple Model of HRM Performance
Slide 10.23

Figure 10.1  A simple model of HRM and
performance (Source D. Guest (2000) Human
resource management, employee well-being and
organizational performance. Paper presented to
the CIPD Professional Standards Conference, 11
July. Reproduced with the permission of the
author.)
25
Can High Commitment Reduce Performance?
Slide 10.24

• Might decrease flexibility and inhibit creative
  problem solving (Cooper Hartley, 1991)
• If commitment reduces staff turnover then fewer
  ideas may enter the organisation
• May depend on reason for commitment e.g.,
  people committed to the organisation via pay
  levels may not produce required level of
  performance

26
Managing Commitment
Slide 10.25

• Commitment is affected by
• Personal characteristics
• Experiences in job role
• Work experiences
• Structural factors
• Personnel policies
• (Guest, 1992)

27
Impact of HR Policies
Slide 10.26

• Employee ability/skills
• Motivation
• Incentive

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Factors Affecting Employee Motivation
Slide 10.27

• Job influence
• Career opportunities
• Job challenge
• Involvement in management decisions
• Training and line manager respect

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Factors Affecting Job Satisfaction
Slide 10.28

• Job influence
• Career opportunities
• Job challenge
• Teamworking

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Factors Affecting Commitment
Slide 10.29

• Training
• Career opportunities
• Management leadership
• Performance appraisal
• Work life balance
• Communication about organisational performance

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Major Performance Initiatives Organisational
Focus
Slide 10.30

Learning organisation Knowledge management Just in time Total quality management Performance culture Investors in people
Standards Customer care Lean production BPR

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Major Performance Initiatives Individual Focus
Slide 10.31

• Performance management
• Performance related pay
• Self development/continuous development
• Empowerment

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Major Performance Initiatives Team Focus
Slide 10.32

• High performance teams
• Cross functional teams
• Self regulating teams

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Things That Go Wrong
Slide 10.33

• The process/people balance
• Getting the measures right
• Management losing interest
• The team/individual balance
• Missing out the development part
• Implementing and managing change

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Mix of Measures
Slide 10.34

• Financial measures
• Customer measures
• Internal business measures
• Innovation and learning

36
Suggestions for Running a Successful Performance
Initiative
Slide 10.35

• Develop a clear vision for the business as a
  framework for individual and team goals
• Consult, develop and agree individual goals and
  targets what to do to achieve how to
  satisfy customers precise, difficult, and
  challenging
• Gain commitment from the top
• Train all participants

37
Summary (1 of 2)
Slide 10.36

• Performance is rewarded
• Performance is also a reward
• UK performance views have been influenced by
  Japanese and US strategy perspectives
• Has the research between people management
  practices and organisational performance been
  proven?

38
Summary (2 of 2)
Slide 10.37

• Commitment as the moderating variable between HR
  practices and organisational performance is
  insufficient
• There are many factors that can affect the
  people/process balance
• Factors likely to produce success include vision,
  target setting, full management commitment,
  training honouring commitments