5OO PART 5 Le4 Explain how human resource management can contribute to high performance. Table 16"1 HRM Practices That Can Help 0rganizations Achieve High Performance Meeting Other HR Goals HRM's Contribution to High Perfarmanee Management of human resources plays a ctitical role in d"ter*inidg companies' success in meeting the challenges of a rapidly changing, highiy comferitive envi- ronment.zZ Compensation, staffing, training and development, perfoirnance lnan- agement, and other HRM practices are investments that directly affelr ernployees' motivation and abihty to provide products and services that are valued lby c,rsto*ers. Table 16.1 lists examples of HRM practices that contribute to high perfprmance. Research suggests that it is more effective to improve HRM practides as a whole than to focus on one or two isolated practices, such as the organization! Rav structure or selection ryrt.*.?l Also, to have the intended influence on perfonnarjrce, the HRM practices must fit well with one another and the organization as a whol$.za Job Design For the organization to benefit from teamwork and employee.*po*..*prrt, jobs n-rust be designed appropriately. Often, a high-performance work system pla{es employees in work teams where employees collaborate ro make decisions and so[r'e problems. Individual empioyees also may be empowered to serve on teams that d$sign jobs and work processes. Job design emphasizing teamwork and empowerment is a fundam{ntal piece of improving i.rfor*urr.. aJnlrsing homes suctr-as Mercy Nursing Facili{v and Beech- wood Continuing Care, located near Buffalo, New York. Applying a philosophy known as "culture change," these nursing homes are moving toward gilaing residents more choices and personal attention in a homier atmosphere. Deiivefing this type of care requires less rigid job descriptions than have developed in th{ highly regu- lated nursing home industry. Mercy, Beechwood, and other facilities adopting culture change have srructured rvork into teams of employees who are given gre{rer flexibility and authority for how they carry out their jobs. Aides are assigned to $roups of resi' dents, rarher than to a few specialized duties, so they can develop carin! relationships with ihe residents.z5 Recruitment and Selection At a high-performance organization, recruitment and selection aim at obtaining rhe kinds of employees who can thrive in this type of setting. These $mployees are enthusiastic about and able to contribute to teamwork, empowermeni, and knowl- edge sharing. Qualities such as creativity and abiiity to cooperate as fl".t of a team . HBM practices match organization's ' Performance management syitem mea- goals. sures customer satisfaction afld quality. . lndividuals and groups share ' Organization monitors emplolees' knowledge. satisfaction. .i. li tj ;t i;, n 'rli'llt '\, ', T rlf ,HI "tt ii 't; :il ir :ii: ,{ il ;?' ]i, t; { ]$ :q-s- s, !; li ,.il {i :ifi .A: .+. 'e $ $ _ti s i},.

1. 5OO PART 5
Le4 Explain how
human resource
management can
contribute to high
performance.
Table 16"1
HRM Practices That Can
Help 0rganizations
Achieve High
Performance
Meeting Other HR Goals
HRM's Contribution to High Perfarmanee
Management of human resources plays a ctitical role in
d"ter*inidg companies'
success in meeting the challenges of a rapidly changing, highiy
comferitive envi-
ronment.zZ Compensation, staffing, training and development,
perfoirnance lnan-
agement, and other HRM practices are investments that directly
affelr ernployees'
motivation and abihty to provide products and services that are
valued lby c,rsto*ers.
Table 16.1 lists examples of HRM practices that contribute to
high perfprmance.

2. Research suggests that it is more effective to improve HRM
practides as a whole
than to focus on one or two isolated practices, such as the
organization! Rav structure
or selection ryrt.*.?l Also, to have the intended influence on
perfonnarjrce, the HRM
practices must fit well with one another and the organization as
a whol$.za
Job Design
For the organization to benefit from teamwork and
employee.*po*..*prrt, jobs n-rust
be designed appropriately. Often, a high-performance work
system pla{es employees
in work teams where employees collaborate ro make decisions
and so[r'e problems.
Individual empioyees also may be empowered to serve on teams
that d$sign jobs and
work processes.
Job design emphasizing teamwork and empowerment is a
fundam{ntal piece of
improving i.rfor*urr.. aJnlrsing homes suctr-as Mercy Nursing
Facili{v and Beech-
wood Continuing Care, located near Buffalo, New York.
Applying a philosophy
known as "culture change," these nursing homes are moving
toward gilaing residents
more choices and personal attention in a homier atmosphere.
Deiivefing this type
of care requires less rigid job descriptions than have developed
in th{ highly regu-
lated nursing home industry. Mercy, Beechwood, and other
facilities adopting culture
change have srructured rvork into teams of employees who are

3. given gre{rer flexibility
and authority for how they carry out their jobs. Aides are
assigned to $roups of resi'
dents, rarher than to a few specialized duties, so they can
develop carin! relationships
with ihe residents.z5
Recruitment and Selection
At a high-performance organization, recruitment and selection
aim at obtaining
rhe kinds of employees who can thrive in this type of setting.
These $mployees are
enthusiastic about and able to contribute to teamwork,
empowermeni, and knowl-
edge sharing. Qualities such as creativity and abiiity to
cooperate as fl".t of a team
. HBM practices match organization's ' Performance
management syitem mea-
goals. sures customer satisfaction afld quality.
. lndividuals and groups share ' Organization monitors
emplolees'
knowledge. satisfaction.
.i.
li
tj
;t
i;,
n
'rli'llt
',
',
T

4. rlf
,HI
"tt
ii
't;
:il
ir
:ii:
,{
il
;?'
]i,
t;
{
]$
:q-s-
s,
!;
li
,.il
{i
:ifi
.A:
.+.

5. 'e
$
$
_ti
s
i},
a
ii
,1.
ae
iiil
,ii'
if
ma
selr
que
tak,
Tn
7h
wor
top
ofa
dele
fron
teal}

6. T
men
the
expe
pool'
pooi'
classr
and r
focus
ident
devel
cessfr
Perf
Ina
what
this ic
As rvt
organ;
manal
about
bank 1
can ac
growtl
achiev
ils are:
able to
motiva
Tos
lTr?oflgr
Figure

7. applyir
is more
ence ea
Work is performed by teams. ' Discipline system is progre
0rganization encourages continuous ' Pay systems reward skills
an
learning. accomPlishments'
Work design permits flexibility in where ' Skills and values of a
diverse
and when iasks are performed. are valued and used'
Selection system is job related and . TechnologY reduces time
and]costs of
legal. tasks while Preserving qu
tnies'
envi-
man-
)VCCS,
mers.
,vhole
lcture
HR,1
s nust
loyees
:1en'rs.
:s and
ece of
]eech-

8. rsophy
;idents
is type
,'regu-
:r-rlture
irbrlr.ty
rf tesi-
'nships
ralnlng
ees are
knowl-
a team
CHAPTER 16 Creating and Maintaining High-Performance
Organizaticns 501
may play a iarge role in selection decisions. High-per{ormance
organizations need
selectior-r inethods that identify more than te.hnical skilis like
"b'rlity
to p"r{o.,r1
accounting ar-id engineering tasks. Ernployers may use group
interviewp, ope,l-ended
questions, and psychological tests to find employees -ho
i..o,rute, shire ideas, and
take irritiative.
Training and Development
'$Uhen
organizations base hiring decisions on qualities like decision-
making and ream-

9. u,ork skills, training may be required ro reach employees the
specific skills they need
to perform the duties of their job. Extensive trair-ring and
developmenr also are parr
of a learnir-rg organization, described earlier in this chapter.
And when organizations
delegate rnany decisions to work teams, the members of rhose
rearns likely r.l'ill benefit
from participating in team development activities rhat prepare
thern for their roles as
tearn rnernbers.
Training programs at Whirlpool have been aiigned with the
cornpany's commiL-
ment to innovation. After rhe company defined the role
innovarion would play in
the company's strategy, ir trained 75 employees to be "Masters
of Inrrovation"-
experts in the qualities and Lrrocesses that enable new ideas to
contribute to Whirl-
pool's success. The Masters of Innovation are charged with
rraining the rest of Whirl-
pool's employees to be innovative. Their lessons are
supplemented btr or-rline and
classrooin training ptograms in innovation skills such as tappir-
rg into nerv resources
and thinking about projects from various points of view.
Ernployee developmenr also
focuses on knowledge sharing. Project teams conplete five-
question surveys that
ider-rtify team members' networks of professionai contacts. The
results help the tearns
develop action plans for using their networks to come up with
more creafive and suc-
cessfirl ideas.26

10. Performance Management
In a high-performance_ organization, empioyees knorv the
organization's goals and
what they must do to heip achieve thor" goulr. HR dep".t,',enrs
can contritute to
this ideal through the..design of the organization's pe.fo.*ar-r.e
managemenr sysrei,'
As we discussed in Chapter B, performance managernent should
l"'..r"i.a i" iir.
organizarion's goals. Flagstar Bank, based in Tioy, Mlhig"rr,
develops goals for brur-r.h
managers by using analytical software frorn pitney B;;. pitnei
B."o*., ,r., Juiu
about households in each branch's geographic area ancl
comparative data about other
bank branches, combined wrth Flagstai's ;ustomer data, to
predict *n", e".1, u*".1,
can achieve in rerms of types of pioducts sold, arrerage bulur-
r.., i" b;L ;;;;;;;
growth in the number of custorners, and so on. The"bank then
sers goals ,hut u."
achievable for rhe branch, given economic conditions and the
needs oflhe clients i.
its.area' This gets ernployees in the branches focused on the
best opportunities avail-
able to them. Branch managers can see the criteria used to set
theii goalrl;;-;h"y;;
motivared by the fairness of th" system.z?
To set up a performance nanagemerlt system that supports the
organization's goals,
managers need to understand the process of employee
pe.fonnarr-ce. As shown in
Figure 16.3, individual employees biing a set of
rkillr'"njubilities to ,h" j"b;;;J ;;
appiying a set of behaviors, they use those skills to achieve

11. cerrain resuks. iBr; r;...r;
is more than the product of individual efforrs. The
organizarionb goals should influ-
ence each step of the process. The organization's culture and
othei factors influence
ta-
itv.
rce
502 PART 5 Meeting Other HR Goals
Figure 1 6" 3
Employee Performance
as a Ptocess
the employees' abilities, behaviors, and results. It mustn't be
forgotten that sometimes
uncontrollable forces such as the current economic conditions
enter the
picture-{or
example, a salesperson can probably sell more during an
economic expansion
than
during an economic slowdown'
Th"is model sllggesrs some guidelines for performance
management. First, each

12. aspecr of pe.forman.. ,ou.rugJ*ent should_Le related to the
organization's
goals'
B;rl;.r; g'oals .ho.lld influenle the kinds of employees selected
and their training'
,l*,"q"ft*ents of each iob, and the-measures used for evaluating
results. Gener-
,ily, ,hi, means the organizarion idenlifies what each department
must do to achieve
ln
the
vidr
SUC
nee
mo
rf
i
c
t
z
ir
5
+,
il
S,
p

13. o
sl
ir
r€
the c
depa
the p
.Dt
de
de
qu
re(
. Lit
orE
rec
reir
cMe
tior
eml
lhr
tribute
and ol-
provij,i
!i
ili:

14. .ii
;)
To develop future leaders, new IBM managels participate in
lBM',s Basic
Blue plogiram for an intensive nlne-
month training program. IBM is considered one of the best
companies in the development
of future leaders'
j
I ,o.", on
I I socisl
responsibiiity
et
#
*r
#
ln a business, profitability and
the company's stoc* price pro-
vide some obvious measures of
success. A nonprofit organization .
needs to apply and adapt some
more creative measures of success.
. Performance measures for
individuals and groups in the
organization should support

15. the achievement of the organi-
zation's mission. The mission
is more than the products and
services provided; it extends
to the desired outcomes of
those products and services- o
say, visiting a health clinic or
participating in a tutoring pro-
gram.These outcomes, in turn,
should be associated with an
impact on society, such as a
reduction in the prevalence of
a disease or the increase in the
proportion of high school stu-
dents who graduate.
Financial measures, such as a
cost reduction or improvement
in efficiency, are important.
Howevel they should be
related to the organization's
ability to fulfill its mission-for
example, because they are
needed for acquiring
resources or carrying out
activities associated with the
desired outcomes and impact
on society.
When possible, measures
should be expressed in mon-
etary units (dollars in the
United States). For example,
if the organization places
unemployed people in jobs, it
can measure the decrease in

16. public assistance Pale :i:- i:i*
govern ment. Dol la r 5r*5-r- : -.
ments of success are us='-
because they can be vacr.+:
over time and cleariY corni'r-.;-
nicated to donors and other
stakeholders,
. Other measurements can be
expressed as percentages,
such as the percent of the tar-
get population who ParticiPate
in a program or the percent of
parlicipants who report achiev-
ing an organizational goal,
such as earning a professionai
designation or disconti nuing
use of drugs or alcohol.
Source: Based on Marc J. Epstein and
Adriana Rejc Buhovac, "lmproving Per-
formance Measurement: Not-{or-Profit
Organizations, " CM A M a n agement,
November 2009, pp. 16-21 .
i
:;
'
Itlmes
:-for
r than
, each

17. goais.
rining,
iener-
chieve
ve nlne-
leaders.
t
it
*
*
r:-
i-.
iii
li:
l
Y
.
the desired results, then defines how indii'idual employees
should contribute to their
departrnent goals. More specifically, the following guidelines
describe how to make
the performance lnanagement system support organizatioaal
goa1s,28
o Define and measure pet'formance in precise ferms-Focus on
outcomes that can be
defined in terms of how frequently certain behaviors occur.

18. Include criteria that
describe lr'ays employees can add value to a product or service
(such as through
quantity, quality, or timeliness). Include behaviors that go
beyond the mirrimum
required to perform a job (such as helping co-workers).
t Link performance measures to meettng custotner nss6l5-
"Qu5tomers" may be the
organization's external customers, or they rnay be intemal
customers (employees
receiving services from a co-worker). Service goals for internal
customers should be
reiated to satisfying external customers.
o Measure and correctfor the effect of situational g6n57vqins5-
Monitor economic condi-
tions, the organization's culture, and other influences on
performance. Measures of
employees'performance should take these influences into
account.
This approach gives ernployees the information they need to
behave in ways that cot-r-
tribute to high per{ormance. ln addition, organizations si-rould
help empioyees identifii
and obtain the abilities they need to meet their performance
goals. The "HR How To" box
pror.ides additionai guidelines for per{ormance management in
nonprofit organizations.
l;I l