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High performance management

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High performance management

  1. 1. Change Management Final High Performance Management 1
  2. 2. High performance management involves implementing a ‘bundle’ of HR practices that are: internally consistent aligned with the organization’s business strategy. 2
  3. 3. Models of human resource management 1. The “hard” control approach • involves reducing labour costs to improve efficiency. • Rooted in Theory X assumptions ‘People dislike work and must be controlled and directed to get them to put forward adequate effort to achieve organisational goals’ 3
  4. 4. Models of human resource management 2. The “soft” commitment maximisation approach • Rooted in Theory Y assumptions ‘People will exercise self direction and self control in the service of objectives to which they are committed’ • It assumes that individuals can work hard and smart without being controlled through sanctions and other external pressures. approach 4
  5. 5. How commitment strategies work HR practices affect performance by: • improving employees’ knowledge and skills; • motivating them to engage in discretionary behaviours that draw on their knowledge and skill; • enabling motivated employees to engage in discretionary behaviours and improve the way they perform their jobs. 5
  6. 6. 1. Practices that improve employee knowledge and skill • • • • • Recruitment Selection Induction Training Other development activities (coaching, mentoring, on-the-job learning, secondments, job rotation) • Retention • Attendance • Information sharing 6
  7. 7. 2. Practices that motivate employees to engage in discretionary behaviours • • • • • • Employment security Redeployment and severance Performance appraisal Incentives Internal promotion systems Status distinctions 7
  8. 8. 3. Practices that enable motivated employees to engage in discretionary behaviours • • • • • Organization structures Parallel and temporary structures Job design Locus of decision making. Employee voice 8
  9. 9. Other benefits from management practices high performance • Delegated responsibility eliminates the need for many supervisory roles. • High commitment reduces the costs associated with an alienated workforce engaged in an adversarial relationship with management. 9
  10. 10. The alignment of HR management practices • Many attempts to improve performance fail because changes are introduced piecemeal and are focused on particular practices such as selection, compensation or training. • For example, the potential benefits of training may be wasted if jobs are not redesigned to give workers the freedom to apply their new knowledge and skills. 10
  11. 11. Implementation Successful implementation requires a mindset which regards people as fundamentally trustworthy, intelligent and motivated. 11
  12. 12. Results from high performance management systems are impressive (see Pfeffer, J., 1998, The Human Equation: Building Profits by Putting People First) 12
  13. 13. Diagnosing the alignment of HR practices This involves diagnosing the extent to which HR practices are: • Congruent with the organization’s business strategy (external alignment) • Aligned with each other (internal alignment) 13
  14. 14. Diagnosing external alignment involves four steps: 1. Reviewing the organization’s strategy. 2. Identifying the critical behaviours and related competencies that are required to achieve the strategy. 3. Identifying practices that the organization uses to manage people. 4. Assessing the alignment of each HR practice with the competencies and behaviours required to achieve the organization’s strategy. (Does each practice support the availability and application of critical competencies and behaviours?) 14
  15. 15. External alignment matrix Critical competencies/behaviours required to achieve the organization’s strategy Practices that affect the: Development of competencies 1 2 3 4 5 6 Recruitment Selection Induction Training Information sharing Motivation to use competencies Employment security Performance appraisal Incentives Internal promotions Status distinctions Freedom to use competencies Organization structures Job design Locus of decision making 15
  16. 16. Diagnosing internal alignment involves assessing the internal consistency of HR management practices. 16
  17. 17. Internal alignment matrix Management practices Practices that affect the: 1 Development of competencies Recruitment Selection Induction Training Information sharing Motivation to use competencies Employment security Performance appraisal Incentives Internal promotions Status distinctions 2 3 4 5 6 7 8 9 10 11 12 13 1 2 3 4 5 6 7 8 9 10 Freedom to use competencies Organisation structures Job design Locus of decision making 11 12 13 17
  18. 18. The introduction of a high performance strategy at MD Foods • Early 1990s were difficult times in dairy industry, many firms went out of business. • MD Foods responded by restructuring the business and investing in new processing and packaging technology. • The new technology was not operated efficiently because of workforce inflexibilities. • Demand for dairy products varied and peak periods involved extensive overtime work. At other times employees operated machinery inefficiently to guarantee overtime work. • Supplementary payments were used to introduce new practices leading to over 90 different rates of pay. • Absenteeism was high • State of industrial relations varied between plants. 18
  19. 19. New HR practices • Trade union business forum to improve IR climate • Greater job security • Annualised hours – fixed salary for agreed annual hours, part roistered and part reserved. • Team based self roistering • New job grading structure that encouraged skill development • Increased holidays • New pension plan • Status distinctions reduced – everybody given ‘staff status’; three sick pay schemes replaced by a single scheme with improved benefits. 19

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