High Performance Work Systems
High Performance Work Systems (HPWS) are one of the emerging concepts in the field of Strategic HRM, concerned with utilizing ‘bundles’ of HR practices which are designed to maximise the value of employees to improve organisational performance. Their have been numerous studies on the performance gains of these HPWS, which will be discussed, as a means to determine the key reasons behind the limited penetration of these models within business organisations.
HPWS are collections of High Performance Work Practices (HPWP), which together act as a set of complementary ‘bundles’ of activities which are seen to improve productivity, employee satisfaction and the general working environment.
There is a wealth of strong evidence for the organisational performance gains of HPWS. MacDuffe (1995) in a study of an US Automobile manufacturers found that by using a system of practices such as training, job rotation and team working, the production time per vehicle was significantly reduced. Additionally, Huselid (1994) found that by using a HPWS of practices focused around employee involvement and skills motivation, sales per worker increased by 16%.
The Department of Trade and Industry (DTI) in 2005 conducted an extensive study of HPWS, they described 35 HPWP linked to organisational performance. The study found that organisations which adopted more of the 35 HPWP had higher levels of employee involvement and greater effectiveness in many areas, not just HRM activities.
Pringle and Kroll (1997), argue that employees are more likely to lead to a sustainable competitive advantage when the environment is changing rapidly. Youndt et al (1996) also comments that due to the forces of globalisation and international economic change, which are seen to weaken traditional market assets such as financial resources and economies of scale. It follows that people may be the “ultimate source of sustained advantage” since their value can never diminish or be imitated.
The literature shows that numerous studies have found ‘relationships’ between HPWS and organisational performance, however none have been able to determine a causal relationship and it is arguable that HPWS cannot be tested in isolation of all other business components.
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