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496 PART 5 Meeting Other HR Goals
It's important for companies to capture and share
the knowledge of workers who have had years to
leam their specialty.
Learning 0rganization
An organization that
supports lifelong
learning by enabling all
employees to acquire
and share knowledge.
Conlinuous Learning
Each employee's and
each group's ongoing
efforts to gather
information and apply
the information to their
decisions in a learning
organization.
manager keeps the tearn updated on important i.ssues and
ensllres that the teain shares information and resources with
others who need them. At the Global Engineering Manu-
facturing Alliance (GEMA) plant in Dundee, Michigan,
tearnwork is designed to achieve the primary goai-to be the
world's rnost productive engine plant. A1l employees, includ-
ing the engineers, are either members or leaders of six-person
teams. Groups of three einployees rvork rotating shifts so that
they know and work rvith one another around the clock. Team
members are carefully seiected to ensLrre they can handie the
problern-soiving responsibilities that GEMA has delegated to
its teams. Technology such as large electronic dispiay screens
lets team members monitor productivity and delal's, so they
can idenrify when they are succeeding and when problems need
to be resolved. Aii
ernployees, not just maltagers or engineers, are elnpowered to
solve problerns. Employ'
ees who deveiop innovative solutions receive bonuses.o
Knowledge Sharing
For more than a decade, lnanagers have been interested in
creating a learning orga-
nization, thar is, an organizarion in which the culture values and
supports lifelong
learning by enabiing all ernployees to continually acquire and
share knowledge. The
people in a learning organization have resources for training,
and they are encouraged
ro share their knowledge with coileagues. Managers take an
active role in identifying
training needs and encouraging the sharing of ideas.g An
organization's information
systems, discussed later in this chapter, have an important role
in making this learn-
ing activity possibie. Information systems capture knowledge
and rnake it available
even after individual employees who provided the knowledge
have left the organiza-
tion. Ultirnately, people are the essentiai ingredients in a
learning organization. They
musr be committed to learning and wiiling to share what they
have learned.
A learning organization has several key features,l0 r
o It engages in continuous learning, each employee's and each
group's ongoing
efforts to gather information and apply the ir-rforrnation to
their decisions. In many
organizations, the process of continuous leatning is aimed at
irnproving quaiity. To
engage in continuous learning, employees must understand the
entire work systeln
they particitr-rate in, the relationships among jobs, their rvork
units, and the organi-
zation as a whole. Ernployees who coirtinuously ieam about
their work systern are
adding to their abihty to improve perforrnance.
r Knorvledge is shsred. Therefore, to create a leaming
organization, one challenge is to
shift the focus of training ar,vay from mereiy teaching skills
and toward a broader focus
on generating and sharing knowledge.ll ln this view, training is
an investment in
the organization's hr-rman resources; it increases employees'
value to the organization.
Also, training conrent should be related to the orgauization's
goals. Human resollrce
deparrments can support the creation of a leaming organization
by planning training
programs that meet these criteria, and they can help to create
botl-r face-to'face and
"ie.1rorri.
systems for employee collaboration to create, capture, and share
knowledge'
. Critical, slstematic thinking is widespread. This occurs q'hen
organizations encour'
age employees to see relationships among ideas and to test
assumptions and obsen'e
the ,es,rlts of their actions. Reward systems can be set Llp to
encourage ernployees
and teams to think in new ways.
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CHAPTER 16 Creating and Maintaining Highl-Performance
Organization s 497
. The organization has a learning cultwe-aculture in rvhich
iearning is rewarded,
promoted, and supported by managers and organizational
objectives. This culture
may be reflected in performance rnanagement systems and pay
structures that
, reu'ard employees for gathering and sharing more knowledge,
A learning culture
creates the conditions in u,hich managers encourage fle xibility
and expeimentatian.
The organization should encourage employees to take risks and
innovape, l.vhich
means it cannot be qr-rick to punish ldeas that do not work out
as intendqd.
c EmploJees are ualued. The organization recognizes that
employees are the source of
its knorvledge. It therefore focuses on ensuring the development
and well-being of
each ernplol'ee.
The experience of Lopez Foods shorvs that the qr-ralities of a
learning organiza-
tion aren'r limited just to high-tech industries. Lopez Foods,
which makes beef and
sausage patties, involved employees in rnakiirg production more
efficient. Working
rvith consultants, Lopez managers and engineers diagrammed
production processes
on huge sheets of brown paper hung on the u'ails. They made
sticky notes available
so that any rvorker passing by could post notes correcting the
information or mak-
ing suggestions based on their day-to-da1, experience on the
front lines. Not only
did the practice impro'r'e the qualiw of information, but ir also
engaged rvorkers in
the improvelnent Lrrocess so that they rernain cornmitted to
making suggestions and
helping their company become more efficiqrt. The conpany also
improved the com-
mr,urication of performance feedback, norr postirlg hourly
perfornance indicators,
and it pays prclduction n,orkers modest but reguiar bonuses for
exceeding productivity
tu.getr. I l
Job Satisfaction
A condition r-rnderpinning ar-ry high-perforrnance organization
is that epnployees
experience job satisfaction-they experience their jobs as
fulfilling or allou'ing thenl
to ftrlfill iurportanr values. Research sLrpports the idea thar
employees' job satisfac-
tion and job pertormance are related.il Higher performance at
the individual level
should contribr,rte to higher performance for the organization as
a u,hole. A study
by CLC Genesee, an HR cor-rsulting firm, for-rnd that
companies r,vith a high level of
employee engagerrent (which includes satisfaction n'ith their
jobs and the cornpany)
saw their rerenues grou/ tnore than tr.rrice as fast as their
competitors as u'ell as profit
grou'th three tirnes irigher.la The relationship between
satisfaction and per{orrnance
also relates to nonprofit and governrnent organizations. In a
survey by the Partner-
ship for Pr-rblic Service and Arnerican l.Jniversit% the Nuclear
Regrriatory Commis-
sion and Governurent Accountability Office shorved the highest
degrees of ernployee
satisfaction, as the "Did You Knorvl" box shows. They far
outranked the bottom agen'
cies, the National Archives and Records Administration (56.0)
and Department of
tansportation (52.2).15 How would you expect these differences
to play out in terms
of the ager-rcies' effectiveness?
Chapter 10 described a nurnber of ways organizations can
promote job satisfaction.
They include rnaking jobs rnore interesting, setting clear and
challenging goals, and
providing valued reu,ards that are iinked to performance in a
performance lnanage-
ment system that employees consider fair. For example, the
Nuclear Regulatory Com-
mission's top agency score for employee satisiaction is based
partly on relatively high
ratings for fair ieadership, empowernerrt of employees by
leaders, and rewards linked
to performance. NRC ernployees also scored the agency r,ery
high on teamwork and
rnatching ernployee skills tt.l the agency's mission.l6
Federal government emploYees who
rated their satisfaction with their
job and work environment were
most satisfied at the Nuclear Regu-
latory Commission. EmPloYees in
the highest-ranking agencies are
at least as satisfied as the employ-
ees in large companies, On aver-
age, government employees are
more satisfied with cooPeration
among co-workers and oPPortuni-
ties to improve skills, while private-
sector employees are more satis-
fied with training, oPPoftunities
for advancement, and information
sharing by management. The gov-
ernment has been imProving in
the past few years, but businesses
have been improving faster.
Sources: Partnership for Public Service,
"Welcome to thd 2009 Best Places to
Work Rankings," Best Places to Work,
http://data.bestplacestowork.org,
accessed May 12,2010; and Partnership
for Public Service, "Private Sector
Comparison," Best Flaces to Work,
http://bestplacestowork.org, accessed
May 12,2010.
Nuclear Regulatory
Commission
Government
Accountability Office
National Aeronautics and
Space Administration
lntelligence
CommunitY
Department of State
Average for all
federal government
Average for all
lange businesses
t;.,{J
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,
7.r. Satis{a*ion with Job
Satisfaction with
Organization
1,
Some organizations are moving beyond concern with mere job
satisfaction and are
trying to fo!t",
"-ployees'
passion for their u,ork. Passionate people are fully engaged
*ith"ro*"thing so that it t".o*", part of their sense of who they
are' Feeling this
*"u
"1"",
or1i, *ork has been called occupational intimacy.lT People
experience
occupational intimacy when they love their lvork, rvhen they
and their co-rvorkers
care abo't one another, and when they find their work
meaningful. Human resotlrce
managers have a significant role in creating these conditions.
For exarnple, they can
selecr"people *ho Jr.. about their work and customers' provide
methods for sharing
kno*ledge, design work to make jobs interesting, and estabiish
policies and prograrns
that shoi .o.r..*rn for employees' needs. Such efforts may
become increasingiy impor-
tant as the business *orli ir-r.r.asingly uses employee
empowerment, teatnrvork, and
knowleclge siraring to build flexible organizations'18
90807A605040302010
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49? PART 5 Meeting Other HR Goals
L:.11 Define high-
performance work
systems, and identifY
the elements of such a
system.
hligh-Per{otmcnce
Wurk Systern
The right combination
of people, technologY,
and orqanizational
structure that
makes full use of
the organization's
resources and
opportunities in
achieving its goals.
TT
'lThis chapter summarizes the role of human lesolrrce
lnanagement in creatingan organization that achieves a higl-r
level of pelforrrance, measuted in such terms
u, loJg-t..r11 profits, q'ality, and clistomer satisfaction. We
begin with a defi'itio'
of higi-perforionr, *ork sire.*, ar-rd a description of these
systetns' elements and
or-rtcJmes."Next, ure identify the conditions that contlibr-rte to
high lSrformarrce' (/e
explain how the various HRM fturctions can contribute to high
perf6imance' FinaL[1',
.". ir-rt.od.,." rays to 1-neasule the effectiveness of httman
resoulce lnanagelnent'
F*tgh-Fenf*nmanee W*rk SYstems
The challenge facing managers today is horv to rnake their
organizations into high-
performani. *o"t systems, rvith the right cornbilatio,n of people,
technology,
and organirational structure to nake full use of resottrces and
oppoltunities in achiev-
ing thelir orgalizations' goals. To function as a high-
performance r,vork systetn, each of
th"ese elerne"n$ must fit well rvith the others iu a smoothly
functioning u'hole' Many
rnannfacturers Llse the iatest in processes including flexible
manufacturing technol-
ogy, total quaiity manage[ient, and just-in-titne inventory
control (meaning parts
ur:-rJ r.rppli", "r.
nt,ro^"iica11y restocked as needed), but of cottfse these
processes do
,'ro, *ort on their orvn; they must be run by qualified people.
Organizations need to
determine u,hat kinds of people fit their needs, and then locate,
train, and motirzate
*1.r" rp..i"f people.2 A..oriirlg to researcir, orgauizations that
introdqce integrated
high-performur-r.l *ork practicls usually experience increases in
productivity ancl
lorlg-i"t* financial pet{ormance.s
d.eating a high-perforfiIance work system co1'ttlasts q'ith
traditional tnanagement
pracrices. ir-r ,h" p^ri, decisions about technology,
organizational structure' and human
resollrces r.l,ere tr.eated as if they rvere unrelated. An
organization might acquire a
1ew infortnation System, restructllre iobs, or add an office in
anothel cotllllry withor'rt
considering tl-re impact on its peop1e.4 Mor" recentiy,
lnanagers have lealizecl that
sLtccess d"i"r-r,1, on hon,u'ell ali thl eleinents work togethet'
For-instance, as l-realth
.ur" pro.,i'd.rs feel increasing pressnre to rein in costs, some are
finding solutions it'l
.o*bir-r^ti,t.rs of information technoiogy' irnproved staffing,
and the redesign of u'ork
processes. A Louisiana hospital chain began running a softrvare
system to analyze
and fill staffing neecls. E*p1oye., use the system to bid for the
hours they want to
work, and the iysrem automaticaiiy assigns thern to sfiifts,
filling all)r elnpiJ' positions
u,ith contract r.vorkers. Autornating the staffing process sates
mol-Iey and frees rnarrag-
ers froin irours of paperwork each-week. A health care chain
basecl in Denver took
technology .,r" u 51"p fr,rrther with an enterprise resource
planning systelr'I that links
together iecisions about patierrt needs, staffing, finances, ai-rd
purchases of s'-rpplies.
Elements of a High-Performance Work System
As shor.vn in Figure 16.1, in a high-performance nork s),stetn,
the eletnents that mttst
,r'g.k tog.rher irrcl,-rde orgar-riraiior-ral srructure, task design,
peopie (the selection,
training]ancl elevelopment of ernployees), reu'ard systems, ancl
inforn-ration systems'
and hurnan fesollrce managemenf playt an itnportant role in
establishing all these'
OrganiTational s*'uctLLre-is the ,"ay tl're organization groups
its people ir-rto useful
di'isiJr-rs, clepartments, and reporting relationships. The
orgairization's top ma[r-
agement rouk., inost rlecisior-r, "bo.,i
StrllctLlre, fOr instance, hou' many ernploy-
"1,
1"r.,o* to each superyisor ar-rc1 whether en-rpioyees are
grouped ac6ording to the
ft,nctic,r-rs they carry out or the cllstolrers they serve. Such
decisions affect hora' rvel1
.l
;t
.lr
ii
,
j
'l)
::
emprl
lvork
im1',1
Tc
be gi
5)rste I
rve cii
T1
a sigr
jobs.
the r-r
these
Re
for ol
the p.
perfor
SLlCCei
in cle,
Chap,
TIln
organ
abour
inforn
shoult
the int
ing th
tion q'
i( ) gl'(
ing o1-r
later ir
CHAPTER 16 Creating and Maintaining High-Performance
Organizations
493
elnployees coordinare their :rctii'ities and reslrond to change. In
a high-pelfolnance
rvork systen, organizational sttr.rclr-rre plolnotes coopelatiol-I'
learning'
anJ co1-rtinllous
Figure '16. i
Elements of a High-
Performance Work
System
t
1
a
rt
rt
h
n
k
ze
to
.1S
g'
rk
ks
lmilrore lnel-It.
Task deslgn derenlit'res hou, the,cletails of the orgat-rizatiot-t's
necessatl'
actilities u'ill
be groupecl, rvhether rnto jobs or tean .esponsibilities. In a
high-perforlnance
u'otk
;r:** ;;;k .lesigr-, ,-,-,"t ., lolx effici"r-rt. ,hil" encouraging high
t1ua1irv. h'r Cl-rapter
4'
l,e cliscr,rssed hou, to.ur.y o.,, tl-ris HRM ftu-rction throirgh
job an:rlvsis anJ iob tlesrgn'
Tl-re rig6t peopLe are J.k;; ;i;ur;;t; of hig6-perfor'''o,,..
*'ork,s1'stet's
F{Rir'[ has
a significanr role in pro.,idir-rg people niro aie $'ell suite'-l antl
Nell prepare(.1 {or their
jobs. Hr,rn-ran resollrce p.rrur-t"n"l h"ip tl-r. organiualiol-l
rect'rtit and
selecr people with
the needed qualifications. Tiaining, i"rr.lop*.r-rt, an.l caLee'
nanagernent
ensLlfe that
ii-r"* p".pf" are able to perfo'n tleir cr,rrent and future jobs
rvith
rhe organizatio''
Rewarcl s)sreirls .o*.ibur" to high performa'rce by encouragi.g
people to
strive
for objecrive, ,l,ro, ,.,pf.,li',1't" .rt-"totio.. overall
goals.,Rervard tf'"rtT ::ll:1:
the perfor'-iar.,." ,T"u..,r", by rul1iJh employees are
judgetl, the n-rethods of measr-rring
fr".fo.,rrur"t.., and the incentive
pay and other lervards linked to TEE
g
,.r.aa.r. Human resollrce managelnent plays an important role
ust
ll1,
lts,
'frrl
illl-
r)--
tl're
leli
ir-r developir-rg and atlministerir-rg lelvard systens' as 'e saw
ln
Chapters B through 12.
The flual element of high'perforn-Iance work s)/sterns is the
organization's information s)stem-s Vlanagers llrake decisions
"fr.-i
*-t" t1,pes of inforrnation to gather al-rd the sortrces o{
ir-Lformation. Thel' also tnltst clecii'1e ri'l-ro in ll-re
orgauization
shoulcl have access ro the informatiou and ho$' they u'ill rnake
th. lr-rfo.,r-r"tior-r ayailable. Moclen ilfoll'ratiot-L systents,
inclgd-
ir-rg the internet, l-rave* qnal-.,ldd .or
gani:at ions to sl-Iare infortna-
tio"n widely. HR ,:lepar.tmen[s rake a.lr.a.tage of this tecl-
rnolog1'
to giYe employees n.."r, to infornation about benefits, train-
ing'opp.,rt.,t-,ities, jtlb opellings, ancl lnore, as ri'e ri'ill
tlescribe
later in this cl-rapter.
ln a high-performance lvotk system' all the
elenrents-peopie, techtrology, and organizational
structure-work toqether for success'
-
l_--
4g4 PART 5 Meeting Other HR Goais
i-*3 Summarize the
outcomes of a high-
performance work
system.
i tEL;f{-' i: .,'
O*o*a, of a High-Perfortlatlce !ork Systetrl
Outcomes of a High-Performance Work System
consider the practices of steel minimills in the United
States' Some of these rnills
have Stfategies based orr keeping their costs :lorv cornpetitors,
costs; low costs
let them operare at a profit u,hile rvinnir-rg ..,rrt*.rs 'virh
low prices' other steel
;;i;iii, i.cus o11 "differentiation," tneaning they set themseh'es
apart
in some
way other 4ran low p.i.;-i.. example, by offlrir-rg'higher quality
or unusual
prod-
uct lines. Research has for-rnd that ihe minirnillJlvith
cost'related
goals tend to
have highly centralized structules, so fi]anagefs can
foctts or-r controlling throlrgh
a tight line of commanr-1. These organizations have
low employee participalion in
decisions, rerati'el.v r"; *;.; ^r,,jb"r-r.fi,r,
and pay highly conringenr on.perfor-
.r-ror-r...5 At minirnill, it-ru, fJ.r* on differentiation, strltctllres
are more compiex and
dece'rralized, .o u.,ri'rorli; ir;; spread-out. These rninirnills
encourage employee
participation ur-ra f,url't-,ieh;; t;;dt.a.d rnore generous benefits'
Thev are higl-r'
performance *,o.k ,yrirr-,rl-i,', g";?r"t, th"se .iifi"re1ltiatol'
rniils enjoy higher pro'
ductivity, Iorver scrap;;;, ;;;1;*"r',.*ploy"e rLrrnover
than the mills tl-rat foctrs
on lolv costs.
Outcomes of a high-performance 'vork system
thus include highet productivity ancl
efficiency. Tt,"r" o.,r.J,',',". lor'rrrrl",. to
'higher
profits' A high-peLforrirance rvork
;;'r;^;"u ho,r" orh..o.,tcomes, including high product
quality, greal customer sat-
is{action, and 1o*, ernployee tumover. Son-re
of ih.r" o.rr.o*es lneet intermediate
goals that lead to 1rig#, p*ii, (r.. rig.,r" 16.2). For example,
high quality contrib-
utes to customer salisfaction, and customer
satisfaction contribr'rtes to growth of the
brrsiness.Liker'vise,irnprol,ingprocluctivityletstheorganizationd
omorervithless,
r.r,hich satisfies price-conscious customers and
rnay help the. organization rvin over
customers from its .o*f"titorr. Other u'ays to lower cost and
irnpro'e quality are to
Ie
oi
lLr
dL
gr,
tt ir
olt
ori
m(
ll
rf
n
.l
oI
rf
lr
LL
-e
a
a
a
Prac
rribr
auto
Ethi,
to gc
Tea
As u'
empl,
rnost
teami
prodt
ing dr
ning'
rvhen
ideas r
Foi
rolesi
ager sl
nlerlrs
:sTffiiffi,
[1s
;ts
:el
ne
d-
to
gh
in
Jr-
nd
ree
;h-
ro-
lus
reduce absenteeism ancl turnover, providing the organization
with a steqdy supply
,f *p"ii.".ed workers. In the pr"uiou, example of minimilis,
some-emplqyers keep
turnover and scrap rares low. Meeting those goals heips the
minimills improve
pro'
ductivity, rvhich helps them earn more profits'
ln a
'high-p..fo.**. tork ,yr,.*, the, outcomes of each employee and
work
d;;;;ttr. . ,h* system's or,".uli high performance. The
organization's
indi'
viduals and groups *ork
"ffl.i"r,tly,
provide high-quality goods and services, and so
"", ^"a
ir-, rf,i, *uy, th.y contribute'to meeting the organization's goals'
S/hen the
o.eJ;rio* adds o. ct anges goals, people are flexible and make
changes as needed to
meet the new goals.
Conditi0ns That Contribute
to High Performance
Certain conditions underiie the formation of a high-perfotmance
work system:6
. Teams perform rvork.
' Employees participate in selection'. Employees receive io.*"l
performance feedback and are actively involved in the
performance improvetnent process.
. bngoing training is emphasized and rewarded'
. il;i;Gr' ,e.,.uari, urrdto*p".rration relate to the company's
financial performance'
. fqrip-."t and work pro..rr", are structured, and technology is
used to encourage
*"*i*rl* flexibility and interaction among employees'
. Employee, puni.ip"i" in planning chang"s in equipment,
layout, and work
methods.
o Uork design allows employees to use a variety of skills'
. Employees"understand how their jobs contribute to the
finished product or service'
. Ethlcai behavior is encouraged.
Practices involving rewards, employee empowerment, and jobs
with v4riety
con'
tribute to hgh performance by giviqg employees skills,
incentives, (nowledge'
;;;;;;*y-uid suti*f".tion, anor{er .ondition associated with high
performance'
Ethical behavior is a necessary condition of high performance
because it contributes
i" g."a long.term relationships with employees' customers, and
the pubiicr
Teamwork and EmPowerment
As rve discussed in Chapter 2, today's otganizations empolver
employees. They expect
employees to make more decisior-t.
"bo".,t
how they perform their jobs. Qne of the
,ooit pop.rluf ways ro empower employees is to design work so
that ir.is pe6formed by
reams. on a work ream, employ.", brir-rg together Various skills
and expqtiences to
produce goods or provide serrrices. The oiganlzation may
charge the team rvith mak-
irrg d..iriom traditionally made by *"',ug!rr, such as hiriug team
T".Tb.T and
plan'
nir:-rg work schedules. Teamwork and empowertnent contribute
to high
performance
u,hJn they inprove job satisfaction and give the organization
fuller use of errployees'
ideas and expertise.
For emporverment to succeed, lnanagers must serve in linking
and coordinating
trl;J";J;;ovide th. team with the resourceg it needs to carry out
its work" The man-
ag.r rhoul,l help the ream and its members interact with
employees from other depart-
,ri"rlrc o, t."ro,
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496 PART 5 Meeting Other HR GoalsIts important for compan.docx

  • 1. 496 PART 5 Meeting Other HR Goals It's important for companies to capture and share the knowledge of workers who have had years to leam their specialty. Learning 0rganization An organization that supports lifelong learning by enabling all employees to acquire and share knowledge. Conlinuous Learning Each employee's and each group's ongoing efforts to gather information and apply the information to their decisions in a learning organization. manager keeps the tearn updated on important i.ssues and ensllres that the teain shares information and resources with others who need them. At the Global Engineering Manu- facturing Alliance (GEMA) plant in Dundee, Michigan,
  • 2. tearnwork is designed to achieve the primary goai-to be the world's rnost productive engine plant. A1l employees, includ- ing the engineers, are either members or leaders of six-person teams. Groups of three einployees rvork rotating shifts so that they know and work rvith one another around the clock. Team members are carefully seiected to ensLrre they can handie the problern-soiving responsibilities that GEMA has delegated to its teams. Technology such as large electronic dispiay screens lets team members monitor productivity and delal's, so they can idenrify when they are succeeding and when problems need to be resolved. Aii ernployees, not just maltagers or engineers, are elnpowered to solve problerns. Employ' ees who deveiop innovative solutions receive bonuses.o Knowledge Sharing For more than a decade, lnanagers have been interested in creating a learning orga- nization, thar is, an organizarion in which the culture values and supports lifelong learning by enabiing all ernployees to continually acquire and share knowledge. The people in a learning organization have resources for training, and they are encouraged ro share their knowledge with coileagues. Managers take an active role in identifying training needs and encouraging the sharing of ideas.g An organization's information systems, discussed later in this chapter, have an important role in making this learn- ing activity possibie. Information systems capture knowledge and rnake it available even after individual employees who provided the knowledge have left the organiza- tion. Ultirnately, people are the essentiai ingredients in a
  • 3. learning organization. They musr be committed to learning and wiiling to share what they have learned. A learning organization has several key features,l0 r o It engages in continuous learning, each employee's and each group's ongoing efforts to gather information and apply the ir-rforrnation to their decisions. In many organizations, the process of continuous leatning is aimed at irnproving quaiity. To engage in continuous learning, employees must understand the entire work systeln they particitr-rate in, the relationships among jobs, their rvork units, and the organi- zation as a whole. Ernployees who coirtinuously ieam about their work systern are adding to their abihty to improve perforrnance. r Knorvledge is shsred. Therefore, to create a leaming organization, one challenge is to shift the focus of training ar,vay from mereiy teaching skills and toward a broader focus on generating and sharing knowledge.ll ln this view, training is an investment in the organization's hr-rman resources; it increases employees' value to the organization. Also, training conrent should be related to the orgauization's goals. Human resollrce deparrments can support the creation of a leaming organization by planning training
  • 4. programs that meet these criteria, and they can help to create botl-r face-to'face and "ie.1rorri. systems for employee collaboration to create, capture, and share knowledge' . Critical, slstematic thinking is widespread. This occurs q'hen organizations encour' age employees to see relationships among ideas and to test assumptions and obsen'e the ,es,rlts of their actions. Reward systems can be set Llp to encourage ernployees and teams to think in new ways. ( I 1 f I ( s a I ?
  • 7. ]LIS in )n. :ce ng nd ge. ur- CHAPTER 16 Creating and Maintaining Highl-Performance Organization s 497 . The organization has a learning cultwe-aculture in rvhich iearning is rewarded, promoted, and supported by managers and organizational objectives. This culture may be reflected in performance rnanagement systems and pay structures that , reu'ard employees for gathering and sharing more knowledge, A learning culture creates the conditions in u,hich managers encourage fle xibility and expeimentatian. The organization should encourage employees to take risks and innovape, l.vhich means it cannot be qr-rick to punish ldeas that do not work out as intendqd. c EmploJees are ualued. The organization recognizes that employees are the source of its knorvledge. It therefore focuses on ensuring the development and well-being of
  • 8. each ernplol'ee. The experience of Lopez Foods shorvs that the qr-ralities of a learning organiza- tion aren'r limited just to high-tech industries. Lopez Foods, which makes beef and sausage patties, involved employees in rnakiirg production more efficient. Working rvith consultants, Lopez managers and engineers diagrammed production processes on huge sheets of brown paper hung on the u'ails. They made sticky notes available so that any rvorker passing by could post notes correcting the information or mak- ing suggestions based on their day-to-da1, experience on the front lines. Not only did the practice impro'r'e the qualiw of information, but ir also engaged rvorkers in the improvelnent Lrrocess so that they rernain cornmitted to making suggestions and helping their company become more efficiqrt. The conpany also improved the com- mr,urication of performance feedback, norr postirlg hourly perfornance indicators, and it pays prclduction n,orkers modest but reguiar bonuses for exceeding productivity tu.getr. I l Job Satisfaction A condition r-rnderpinning ar-ry high-perforrnance organization is that epnployees experience job satisfaction-they experience their jobs as fulfilling or allou'ing thenl to ftrlfill iurportanr values. Research sLrpports the idea thar employees' job satisfac- tion and job pertormance are related.il Higher performance at
  • 9. the individual level should contribr,rte to higher performance for the organization as a u,hole. A study by CLC Genesee, an HR cor-rsulting firm, for-rnd that companies r,vith a high level of employee engagerrent (which includes satisfaction n'ith their jobs and the cornpany) saw their rerenues grou/ tnore than tr.rrice as fast as their competitors as u'ell as profit grou'th three tirnes irigher.la The relationship between satisfaction and per{orrnance also relates to nonprofit and governrnent organizations. In a survey by the Partner- ship for Pr-rblic Service and Arnerican l.Jniversit% the Nuclear Regrriatory Commis- sion and Governurent Accountability Office shorved the highest degrees of ernployee satisfaction, as the "Did You Knorvl" box shows. They far outranked the bottom agen' cies, the National Archives and Records Administration (56.0) and Department of tansportation (52.2).15 How would you expect these differences to play out in terms of the ager-rcies' effectiveness? Chapter 10 described a nurnber of ways organizations can promote job satisfaction. They include rnaking jobs rnore interesting, setting clear and challenging goals, and providing valued reu,ards that are iinked to performance in a performance lnanage- ment system that employees consider fair. For example, the Nuclear Regulatory Com- mission's top agency score for employee satisiaction is based partly on relatively high ratings for fair ieadership, empowernerrt of employees by
  • 10. leaders, and rewards linked to performance. NRC ernployees also scored the agency r,ery high on teamwork and rnatching ernployee skills tt.l the agency's mission.l6 Federal government emploYees who rated their satisfaction with their job and work environment were most satisfied at the Nuclear Regu- latory Commission. EmPloYees in the highest-ranking agencies are at least as satisfied as the employ- ees in large companies, On aver- age, government employees are more satisfied with cooPeration among co-workers and oPPortuni- ties to improve skills, while private- sector employees are more satis- fied with training, oPPoftunities for advancement, and information sharing by management. The gov- ernment has been imProving in the past few years, but businesses have been improving faster. Sources: Partnership for Public Service, "Welcome to thd 2009 Best Places to Work Rankings," Best Places to Work, http://data.bestplacestowork.org, accessed May 12,2010; and Partnership for Public Service, "Private Sector Comparison," Best Flaces to Work, http://bestplacestowork.org, accessed
  • 11. May 12,2010. Nuclear Regulatory Commission Government Accountability Office National Aeronautics and Space Administration lntelligence CommunitY Department of State Average for all federal government Average for all lange businesses t;.,{J 5rit1iftri9,tiqs+trareq63sbry:ee..F? e n ,ffiryigiw{:[email protected] [: tr , 7.r. Satis{a*ion with Job
  • 12. Satisfaction with Organization 1, Some organizations are moving beyond concern with mere job satisfaction and are trying to fo!t", "-ployees' passion for their u,ork. Passionate people are fully engaged *ith"ro*"thing so that it t".o*", part of their sense of who they are' Feeling this *"u "1"", or1i, *ork has been called occupational intimacy.lT People experience occupational intimacy when they love their lvork, rvhen they and their co-rvorkers care abo't one another, and when they find their work meaningful. Human resotlrce managers have a significant role in creating these conditions. For exarnple, they can selecr"people *ho Jr.. about their work and customers' provide methods for sharing kno*ledge, design work to make jobs interesting, and estabiish policies and prograrns
  • 13. that shoi .o.r..*rn for employees' needs. Such efforts may become increasingiy impor- tant as the business *orli ir-r.r.asingly uses employee empowerment, teatnrvork, and knowleclge siraring to build flexible organizations'18 90807A605040302010 498 1CS ho thr col lea lVO her he I ir', lir', EI In req fur Me tin feg op€ dec
  • 15. 49? PART 5 Meeting Other HR Goals L:.11 Define high- performance work systems, and identifY the elements of such a system. hligh-Per{otmcnce Wurk Systern The right combination of people, technologY, and orqanizational structure that makes full use of the organization's resources and opportunities in achieving its goals. TT 'lThis chapter summarizes the role of human lesolrrce lnanagement in creatingan organization that achieves a higl-r level of pelforrrance, measuted in such terms u, loJg-t..r11 profits, q'ality, and clistomer satisfaction. We begin with a defi'itio' of higi-perforionr, *ork sire.*, ar-rd a description of these
  • 16. systetns' elements and or-rtcJmes."Next, ure identify the conditions that contlibr-rte to high lSrformarrce' (/e explain how the various HRM fturctions can contribute to high perf6imance' FinaL[1', .". ir-rt.od.,." rays to 1-neasule the effectiveness of httman resoulce lnanagelnent' F*tgh-Fenf*nmanee W*rk SYstems The challenge facing managers today is horv to rnake their organizations into high- performani. *o"t systems, rvith the right cornbilatio,n of people, technology, and organirational structure to nake full use of resottrces and oppoltunities in achiev- ing thelir orgalizations' goals. To function as a high- performance r,vork systetn, each of th"ese elerne"n$ must fit well rvith the others iu a smoothly functioning u'hole' Many rnannfacturers Llse the iatest in processes including flexible manufacturing technol- ogy, total quaiity manage[ient, and just-in-titne inventory control (meaning parts ur:-rJ r.rppli", "r. nt,ro^"iica11y restocked as needed), but of cottfse these processes do ,'ro, *ort on their orvn; they must be run by qualified people.
  • 17. Organizations need to determine u,hat kinds of people fit their needs, and then locate, train, and motirzate *1.r" rp..i"f people.2 A..oriirlg to researcir, orgauizations that introdqce integrated high-performur-r.l *ork practicls usually experience increases in productivity ancl lorlg-i"t* financial pet{ormance.s d.eating a high-perforfiIance work system co1'ttlasts q'ith traditional tnanagement pracrices. ir-r ,h" p^ri, decisions about technology, organizational structure' and human resollrces r.l,ere tr.eated as if they rvere unrelated. An organization might acquire a 1ew infortnation System, restructllre iobs, or add an office in anothel cotllllry withor'rt considering tl-re impact on its peop1e.4 Mor" recentiy, lnanagers have lealizecl that sLtccess d"i"r-r,1, on hon,u'ell ali thl eleinents work togethet' For-instance, as l-realth .ur" pro.,i'd.rs feel increasing pressnre to rein in costs, some are finding solutions it'l .o*bir-r^ti,t.rs of information technoiogy' irnproved staffing, and the redesign of u'ork processes. A Louisiana hospital chain began running a softrvare system to analyze and fill staffing neecls. E*p1oye., use the system to bid for the hours they want to
  • 18. work, and the iysrem automaticaiiy assigns thern to sfiifts, filling all)r elnpiJ' positions u,ith contract r.vorkers. Autornating the staffing process sates mol-Iey and frees rnarrag- ers froin irours of paperwork each-week. A health care chain basecl in Denver took technology .,r" u 51"p fr,rrther with an enterprise resource planning systelr'I that links together iecisions about patierrt needs, staffing, finances, ai-rd purchases of s'-rpplies. Elements of a High-Performance Work System As shor.vn in Figure 16.1, in a high-performance nork s),stetn, the eletnents that mttst ,r'g.k tog.rher irrcl,-rde orgar-riraiior-ral srructure, task design, peopie (the selection, training]ancl elevelopment of ernployees), reu'ard systems, ancl inforn-ration systems' and hurnan fesollrce managemenf playt an itnportant role in establishing all these' OrganiTational s*'uctLLre-is the ,"ay tl're organization groups its people ir-rto useful di'isiJr-rs, clepartments, and reporting relationships. The orgairization's top ma[r- agement rouk., inost rlecisior-r, "bo.,i StrllctLlre, fOr instance, hou' many ernploy-
  • 19. "1, 1"r.,o* to each superyisor ar-rc1 whether en-rpioyees are grouped ac6ording to the ft,nctic,r-rs they carry out or the cllstolrers they serve. Such decisions affect hora' rvel1 .l ;t .lr ii , j 'l) :: emprl lvork im1',1 Tc be gi 5)rste I rve cii T1 a sigr
  • 20. jobs. the r-r these Re for ol the p. perfor SLlCCei in cle, Chap, TIln organ abour inforn shoult the int ing th tion q' i( ) gl'( ing o1-r later ir CHAPTER 16 Creating and Maintaining High-Performance Organizations 493 elnployees coordinare their :rctii'ities and reslrond to change. In a high-pelfolnance
  • 21. rvork systen, organizational sttr.rclr-rre plolnotes coopelatiol-I' learning' anJ co1-rtinllous Figure '16. i Elements of a High- Performance Work System t 1 a rt rt h n k ze to .1S g' rk ks lmilrore lnel-It. Task deslgn derenlit'res hou, the,cletails of the orgat-rizatiot-t's necessatl'
  • 22. actilities u'ill be groupecl, rvhether rnto jobs or tean .esponsibilities. In a high-perforlnance u'otk ;r:** ;;;k .lesigr-, ,-,-,"t ., lolx effici"r-rt. ,hil" encouraging high t1ua1irv. h'r Cl-rapter 4' l,e cliscr,rssed hou, to.ur.y o.,, tl-ris HRM ftu-rction throirgh job an:rlvsis anJ iob tlesrgn' Tl-re rig6t peopLe are J.k;; ;i;ur;;t; of hig6-perfor'''o,,.. *'ork,s1'stet's F{Rir'[ has a significanr role in pro.,idir-rg people niro aie $'ell suite'-l antl Nell prepare(.1 {or their jobs. Hr,rn-ran resollrce p.rrur-t"n"l h"ip tl-r. organiualiol-l rect'rtit and selecr people with the needed qualifications. Tiaining, i"rr.lop*.r-rt, an.l caLee' nanagernent ensLlfe that ii-r"* p".pf" are able to perfo'n tleir cr,rrent and future jobs rvith rhe organizatio'' Rewarcl s)sreirls .o*.ibur" to high performa'rce by encouragi.g people to strive
  • 23. for objecrive, ,l,ro, ,.,pf.,li',1't" .rt-"totio.. overall goals.,Rervard tf'"rtT ::ll:1: the perfor'-iar.,." ,T"u..,r", by rul1iJh employees are judgetl, the n-rethods of measr-rring fr".fo.,rrur"t.., and the incentive pay and other lervards linked to TEE g ,.r.aa.r. Human resollrce managelnent plays an important role ust ll1, lts, 'frrl illl- r)-- tl're leli ir-r developir-rg and atlministerir-rg lelvard systens' as 'e saw ln Chapters B through 12. The flual element of high'perforn-Iance work s)/sterns is the organization's information s)stem-s Vlanagers llrake decisions "fr.-i *-t" t1,pes of inforrnation to gather al-rd the sortrces o{ ir-Lformation. Thel' also tnltst clecii'1e ri'l-ro in ll-re
  • 24. orgauization shoulcl have access ro the informatiou and ho$' they u'ill rnake th. lr-rfo.,r-r"tior-r ayailable. Moclen ilfoll'ratiot-L systents, inclgd- ir-rg the internet, l-rave* qnal-.,ldd .or gani:at ions to sl-Iare infortna- tio"n widely. HR ,:lepar.tmen[s rake a.lr.a.tage of this tecl- rnolog1' to giYe employees n.."r, to infornation about benefits, train- ing'opp.,rt.,t-,ities, jtlb opellings, ancl lnore, as ri'e ri'ill tlescribe later in this cl-rapter. ln a high-performance lvotk system' all the elenrents-peopie, techtrology, and organizational structure-work toqether for success' - l_-- 4g4 PART 5 Meeting Other HR Goais i-*3 Summarize the outcomes of a high- performance work
  • 25. system. i tEL;f{-' i: .,' O*o*a, of a High-Perfortlatlce !ork Systetrl Outcomes of a High-Performance Work System consider the practices of steel minimills in the United States' Some of these rnills have Stfategies based orr keeping their costs :lorv cornpetitors, costs; low costs let them operare at a profit u,hile rvinnir-rg ..,rrt*.rs 'virh low prices' other steel ;;i;iii, i.cus o11 "differentiation," tneaning they set themseh'es apart in some way other 4ran low p.i.;-i.. example, by offlrir-rg'higher quality or unusual prod- uct lines. Research has for-rnd that ihe minirnillJlvith cost'related goals tend to have highly centralized structules, so fi]anagefs can foctts or-r controlling throlrgh a tight line of commanr-1. These organizations have low employee participalion in decisions, rerati'el.v r"; *;.; ^r,,jb"r-r.fi,r,
  • 26. and pay highly conringenr on.perfor- .r-ror-r...5 At minirnill, it-ru, fJ.r* on differentiation, strltctllres are more compiex and dece'rralized, .o u.,ri'rorli; ir;; spread-out. These rninirnills encourage employee participation ur-ra f,url't-,ieh;; t;;dt.a.d rnore generous benefits' Thev are higl-r' performance *,o.k ,yrirr-,rl-i,', g";?r"t, th"se .iifi"re1ltiatol' rniils enjoy higher pro' ductivity, Iorver scrap;;;, ;;;1;*"r',.*ploy"e rLrrnover than the mills tl-rat foctrs on lolv costs. Outcomes of a high-performance 'vork system thus include highet productivity ancl efficiency. Tt,"r" o.,r.J,',',". lor'rrrrl",. to 'higher profits' A high-peLforrirance rvork ;;'r;^;"u ho,r" orh..o.,tcomes, including high product quality, greal customer sat- is{action, and 1o*, ernployee tumover. Son-re of ih.r" o.rr.o*es lneet intermediate goals that lead to 1rig#, p*ii, (r.. rig.,r" 16.2). For example, high quality contrib-
  • 27. utes to customer salisfaction, and customer satisfaction contribr'rtes to growth of the brrsiness.Liker'vise,irnprol,ingprocluctivityletstheorganizationd omorervithless, r.r,hich satisfies price-conscious customers and rnay help the. organization rvin over customers from its .o*f"titorr. Other u'ays to lower cost and irnpro'e quality are to Ie oi lLr dL gr, tt ir olt ori m( ll rf n .l oI rf lr
  • 28. LL -e a a a Prac rribr auto Ethi, to gc Tea As u' empl, rnost teami prodt ing dr ning' rvhen ideas r Foi rolesi ager sl nlerlrs :sTffiiffi,
  • 29. [1s ;ts :el ne d- to gh in Jr- nd ree ;h- ro- lus reduce absenteeism ancl turnover, providing the organization with a steqdy supply ,f *p"ii.".ed workers. In the pr"uiou, example of minimilis, some-emplqyers keep turnover and scrap rares low. Meeting those goals heips the minimills improve pro' ductivity, rvhich helps them earn more profits' ln a 'high-p..fo.**. tork ,yr,.*, the, outcomes of each employee and work
  • 30. d;;;;ttr. . ,h* system's or,".uli high performance. The organization's indi' viduals and groups *ork "ffl.i"r,tly, provide high-quality goods and services, and so "", ^"a ir-, rf,i, *uy, th.y contribute'to meeting the organization's goals' S/hen the o.eJ;rio* adds o. ct anges goals, people are flexible and make changes as needed to meet the new goals. Conditi0ns That Contribute to High Performance Certain conditions underiie the formation of a high-perfotmance work system:6 . Teams perform rvork. ' Employees participate in selection'. Employees receive io.*"l performance feedback and are actively involved in the performance improvetnent process. . bngoing training is emphasized and rewarded' . il;i;Gr' ,e.,.uari, urrdto*p".rration relate to the company's financial performance' . fqrip-."t and work pro..rr", are structured, and technology is used to encourage *"*i*rl* flexibility and interaction among employees' . Employee, puni.ip"i" in planning chang"s in equipment, layout, and work
  • 31. methods. o Uork design allows employees to use a variety of skills' . Employees"understand how their jobs contribute to the finished product or service' . Ethlcai behavior is encouraged. Practices involving rewards, employee empowerment, and jobs with v4riety con' tribute to hgh performance by giviqg employees skills, incentives, (nowledge' ;;;;;;*y-uid suti*f".tion, anor{er .ondition associated with high performance' Ethical behavior is a necessary condition of high performance because it contributes i" g."a long.term relationships with employees' customers, and the pubiicr Teamwork and EmPowerment As rve discussed in Chapter 2, today's otganizations empolver employees. They expect employees to make more decisior-t. "bo".,t how they perform their jobs. Qne of the ,ooit pop.rluf ways ro empower employees is to design work so that ir.is pe6formed by reams. on a work ream, employ.", brir-rg together Various skills and expqtiences to
  • 32. produce goods or provide serrrices. The oiganlzation may charge the team rvith mak- irrg d..iriom traditionally made by *"',ug!rr, such as hiriug team T".Tb.T and plan' nir:-rg work schedules. Teamwork and empowertnent contribute to high performance u,hJn they inprove job satisfaction and give the organization fuller use of errployees' ideas and expertise. For emporverment to succeed, lnanagers must serve in linking and coordinating trl;J";J;;ovide th. team with the resourceg it needs to carry out its work" The man- ag.r rhoul,l help the ream and its members interact with employees from other depart- ,ri"rlrc o, t."ro, "rrd should make sure communication flows in both directions-the CHAPTER 16 Creating and Maintaining High-Performance organizations 495 103 Ilescribe the conditions that create a high-performance work system.