J & W Plc high performance and employee involvement.

by zahidddc (student)

University Degree Business and Administrative studies

Executive Summary:

The idea of this report is to look at the High performance working and employee engagement. Research of this report is based on academic and web based literature review. The major findings of this report indicate that High Performance work system can bring success for an organization. Employee engagement is one of the best HR practices. High employee engagement can improve the company’s overall performance. Barriers for High performance work practice implementation can be avoided staff training, involvement (e.g. Information sharing) and motivation (e.g. Rewards).Practicing the high commitment seven HR practices suggested by Pfeffer can improve the organization performance. Based on the finding, this report recommends that Information sharing, training, selective hiring Rewards and incentives can improve the J&W plc’s staff performance.

Introduction:

There have been a significant number of studies conducted over the last few years investigating links between human resource management and organisational performance. It was mainly focused on the concept of high performance working practice and employee engagement. These concepts have been implemented in USA and Britain as well and proven positive. The main idea was to implement some particular HR policies and practices, which has the potentiality to contribute to the improvement of the employee attitudes and behaviour, labour turnover and higher levels of productivity, quality and customer service. In his last two books Jeffrey Pfeiffer have discussed about the best HR practice models and proposed 7 HR practices. These were secured employment, selective hiring and sophisticated selection, team working, High compensation, extensive training, learning and development, reduction of status and sharing information (Rayner C and Smith D, 2009).

This is a report on J&W PLC staff performance to investigate the high performance working and employee engagement. The report will focus on the HR practices, its implementation, benefits, potential barriers and limitation.

The aims and the objectives of this report are:

Addressing the high performance working and employee engagement.
Discussing different HR policies for High performance working practice and discus its benefits for the company.
Evaluating the results of other companies around who had already implemented these concepts.
Suggesting a cost-effective recommendation and action plan to improve the performances and effectiveness of the company.

Literature Review:

2.1 High performance working:

According to Organisation for economic Co-operation and Development (OECD) High performance working system is a flatter, non- hierarchical structure, moving away from dependence on management control towards team working, autonomous working based on high levels of trust, communication and involvement (Rayner C & Smith D, 2009).

Sung and Ashton (2005) defined High Performance work system as a 35 complementary work practices which covers three main areas:

High employee engagement in work practices- as for example: self motivated team, sharing and get access to company information.
Best Human resource practices- e.g. job security, extensive training and development etc.
Reward and commitment practices- e.g. different financial rewards, job rotation and flexi hours (Armstrong M 2009).

According to Harley B et al (2010), High performance working system allows the employees a degree of judgment and flexibility in terms of the way they work. Autonomous and semiautonomous team work is the heart of High performance working system including individual works which is characterized by judgement, range of different skills, multitasking and continuous feedback. These forms of work function, works best when it is added with variety level of information sharing. As it ensures the staff are aware that what is happening in the work place and they can take part in decision making. It is also mentioned that in High performance work system there should have range of incentives for the staff and different measures to motivate them.

High performance work system became popular in 1990s. After being faced high global competition United States companies needed a different ways to improve the quality, productivity, and responsiveness of their service and product. The US department of labour had introduced the High performance work system and mentioned about its different characteristics. There were Multi skilled team work, empowering the frontline worker, broad training, management of labour cooperation, ensure quality and customer satisfaction (Dessler G 2012).

There are different high performance work designs available. Buchanan (1987) had introduced different steps of High performance working system. Figure 2.1 shows the different steps of that design:

Figure: 2.1 Buchanan (1987) High performance work design. Source: Armstong M (2006) ‘Human resource Management practice’ P-334

Bailey (1993) and Appelbaum et al (2000) had introduced AMO model of High performance working (Figure 2.2).

Figure: 2.2 The AMO model, Source: Bosellie P (2010) ‘Strategic Human Resource Management’ P-133

According to the model a HR system will serve best to an organization when it attend the employee’s interest, skill, motivation and quality of their task. On the other hand Boxall and Purcell (2003) added that the AMO model will work best when-

Staffs are able to perform well.
Staffs have the motivation to give the best
The work environment provides enough support to give their best Boselie P (2010).

A good number of studies had been conducted on this topic and the result had shown that the High performance work system is a successful approach –King J (1995) had conducted a survey among 1000 companies in US. He had reviled that 60% of those company had implemented at least one of the HPW system practice and most of them had reported that increase in productivity and 70% had reported improvement of productivity.

In a recent meta-analysis Combs et al (2006) had researched 92 studies, the study results shown the links between high performance work practice and company performance. Three sets of HR practices were identified from those studies. They are:

Increase skill.
Empowering the employees.
Staff motivation.

In another study Ericksen (2007) had tested a hypothesis that high performance work system creates a human resource advantage like workforce alignment among 196 small businesses. The study result had shown that there is a strong relation between workforce alignment and sales growth.

This High performance work system should be based on particular strategy that sets out goal and policies on how a high performance culture can be implemented and maintained. Developing a High performance work system depends on the goals of that particular business, enough resources to attain those goals and how the staff can participate to reach those goals (Armstrong M, 2009).

2.2 Employee engagement:

Any Organisation which really wants to create a positive working environment has to be based on faith, outstanding customer service, combined teamwork, operational brilliance and inventive problem solving. The management team must commence to understand, and be reactive to the needs of the people that represent the organization’s most valuable asset - the employees. In return of that investment the result will come in the form of higher level of employee inspiration, creativity, higher level of productivity and high commitment. All those factors can lead an organisation to high level of profitability

According to CIPD (2008) Employee engagement/ involvement is a combination of commitment of the staff to the organization and it values plus enthusiasm to help out the colleagues. This is something more than job satisfaction and employee motivation. This is something offered by the employees by himself and it cannot be required as a part of employment contract. Employee engagement had three dimensions:

Emotional Engagement- Emotionally involved at work
Cognitive engagement- Focusing hard at work
Physical Engagement - Willing to go extra mile for the employer (Martin J 2010).

There are different forms and principles of ...

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Emotional Engagement- Emotionally involved at work
Cognitive engagement- Focusing hard at work
Physical Engagement - Willing to go extra mile for the employer (Martin J 2010).

There are different forms and principles of employee involvement. Below Figure 1.2 shows the different categories and areas of employee involvement. According to latest survey by Chartered Management Institute (2002) it has mentioned about the formal and informal channels of employee involvement. These are: Team briefing, Trade union representative, staff suggestions scheme, consultative committees, self managing work team, and job redesign.

Based on three dimensions of employee engagement Martin J (2010) had suggested the HR policies and procedure which can help to implement a successful employee engagement work system:

Involve the staff in company decision making.
Give freedom to their voice and managers should listen to them.
Give them a feel that they can perform well.
Give them an opportunity to develop the job.
Offer them an effective leadership and management.
Give them a faith that the company is concerned about the employee’s health and wellbeing.

Figure 1.2 Sources: ‘Introducing Human Resource Management’ Page: 414

In another article Apostolou A (2000) had mentioned about different phases of employee engagement. He had argued that successful employee engagement requires managers to initiate and maintain the process and give access to resources that will help the staff to perform well. These phases are:

Listening: - Best tool to implement the employee engagement.
Introducing Suggestion programme: - can be achieved through the suggestion boxes and reward for the approved suggestions.
Giving feedback on listening and suggestions.

Successful implementation of High employee engagement can offer many benefits for the company. It plays a key role to increase the energy of the employees, their dedication and commitment to the organization (Surdulli s et al 2012). Chartered Management Institute (2002) conducted a survey among 110 managers of different companies; results shows that high employee engagement improves job satisfaction, employees accept the changes easily, improve employee’s knowledge management, improve trust and commitment, more responsive to training, increase productivity, increase job security, more chance to get innovative idea, and lowest staff turnover. In a recent survey Guthrie’s (2001) discussed about the benefits about the high employee involvement among 164 firms in New Zealand. The study result had shown that when a company implemented the High employee involvement work practice, it produce lower employee turnover and consistent higher level of productivity. On the other hand when a company implements the controlled oriented work form higher labour turnover is consistent and higher productivity. So, company who were implementing the high involvement work practice they did performed well in terms of low labour turnover.

Although employee engagement is a very successful HR strategy but it is not really easy to implement this practice. Collinson (1995) had identified two resistance of management control to implement this strategy. The first one is ‘Resistance through distance’- here the staffs refuse to any engagement or responsibility for the running of the company. This can create conflict between the staff as some of them will agree to take it and some of them not. This point it will be hard for the manager to control it. The strategy always pushes to get more information and explanation as way of challenging the managers. So, employee engagement can create conflict between staffs if all of them are not agreed to get involved and mangers as well as they will be challenged constantly (Martin J ,2010).

In another survey Chartered Management Institute (2002) had mentioned about the top ranked potential barriers to implement employee engagement. They were:

Inadequate training for the staff.
Confrontation to change at all levels.
Lack of top level assurance and support.

2.3Implementation of different HR policies in High performance working system:

There are bundles of HR policies that can be implemented to boost up the company performance. Implementation of different HR polices depends on that particular company’s working environment, resources etc. Haynes and Fryer (2000) had revealed a strategy map for HR policies design in one of their article in relation to Hotel business (Figure: 3.1).

Figure 3.1

Sources: Haynes,P. and Fryer, G. (2000), cited by Boxall, P. and Purcell, J. (2003, p.242),

Again Jeffrey Pfeffer had introduced a Human Resource model and suggested seven practices. These were security of employment, selective hiring, self-managed teams or team working, high pay linked to company performance, extensive training, reducing status differences and sharing information. In this part of the literature review we will discuss about these concepts, its implementation in high performance working practice and benefits.

2.3.1 Employment Security:

Employment security is the fundamental issue among other six HR practices. It is unrealistic to ask the staff to offer their best without giving them the employment security and concern them about their future career. But there is a limit of how much employment security can be given. A degree of employment security is needed to get the best from the employees. The main point of employment security is to avoid the job reductions where it’s possible and staff are expected to maintain their employment with the company and can have an internal transfer in the company if required (Marchington and Wilkinson 2005). These days dealing with the job redundancies is the main priority of the HR. People Management Magazine (2011) mentioned that the public sector employment fell by 6.19m. 29% of organisation already has made redundancies and 50% of the organisations are planning redundancies.

2.3.2 Selective hiring and sophisticated selection:

Recruitment and selection plays a vital role of the central activities in human resource management. Recruitment and selection is a planned rational activity. It can play an important role of the effectiveness and performance of the organisation. So if recruiting and selecting staff is done in an efficient manner that can avoid unwanted cost (Rees and French -2009, p-171)6. There are different methods of recruitment and selection method. In a recent CIPD survey (2006) among 802 UK employers it shows that advertisements in local press, recruitment agency and corporate website are commonly used methods (Torrington et al 2008 p-150).

2.3.3 Self managed teams/Team Work:

Now a day’s Teamwork has been identified as a primary component of a company performance. Team work is typically help to take better decision and also gives the ability to achieve more creative solution. Research had shown that staff who work in a team, they got higher level of satisfaction than the traditional way of working staff (Griffin et al, 2001) . In a recent study by Abdullah Z et al (2009) among 153 managers of private company in Malaysia it has shown that team work has positive and significant influence on the organization performance. Research shows that effectiveness of self managed team is not always positive (Robbins and Judge, 2011). Self managed team members cannot manage conflicts well when a negative situation arise they do not cooperate with each other which can leads to lower group performance. Lower skilled workers can bring negative impact of team working where as with the high skilled, well trained and self managed team can improve the organisational performance.

2.3.4 High compensation on performance:

High compensation is one of the significant parts of best HR practices. There are two main elements of this human resource practice- paying higher than normal compensation and reward related to performance. Christopher A (2009) remarks that successful organisation always evaluate their pay and performance system because it is more visible and important to the employee. A clear and fair pay system can motivate the employee to give their best. Gielen Anne C. et al (2009) had established the relation between the performance and pay. In the study it shows that implementation of performance related pay had increased the organisational productivity by 9%.

3.3.5 Extensive training, learning and development:

Employers always try to recruit ‘Outstanding human talent’. It is their primary duty to make sure that these people remain active in their own field, not only in terms of professional expertise or product knowledge but also working as a team and interpersonal relations. Regular training and suitable learning environment can keep these talent fit to give their best. Noe A R et al (2010 p-272) mentioned the benefits of employees training which includes increasing knowledge, improve skills to work with new technologies, efficiency of working in a team and better understanding of companies culture and laws. Herman A and Kurt K (2009) one of their studies revealed the benefits of training for the employees in terms of multidisciplinary, multilevel, and global perspective. The time and resources which will be invested for training, learning and development purpose is also very important.

2.3.6 Employee involvement information sharing and worker voice:

Employee involvement by information sharing is an essential part of high performance. The type of information share in the organisation is a key aspect of human resource management. Prince J et al (2011) argues Information sharing in the organisation is a vital part of best HR practice. They also added that the information sharing system varies by countries and cultures. Different country’s firms got different type of strategy to share the information. In another study Magnus M et al (2009) imply that information sharing improve the team performance. The relation between the team performance and information sharing moderated by the illustration of information sharing, performance criteria, task category, and discussion arrangement by uniqueness.

Work voice is an important aspect of high commitment Human resource management. The worker should get the opportunity to express their view independently and openly to have a say on management decision making and which could be achieved by trade union representation. Wood S & Wall T (2007) stated that better human resource management and high performance comes from high employee involvement models. Employee voice is one of the central parts of this model. In another study Holland P et al (2011) had shown the relation between employee voice and job satisfaction is positive.

2.4 Example of the Companies who had implemented the High performance working strategy:

Recently ‘The Sunday Times’ newspaper had published 100 best small, medium and big companies to work for. Some of these companies had already implemented the High performance working and high employee engagement polices.

‘Shine communication’ is one of the communication consultancy firms. It has been voted as a number 1 best small company to work for. It has reached the highest score on employee engagement survey. This company had implemented the employee engagement successfully. The CEO of the company treats the staff as his best asset of the company. This had given him top score as leader. There management listen to the employee rather than giving them order with 90% leading score. The company had huge fund for personal development and training for the staff. All the staff got the chance to explain what they would have done if they are the managing director for the company. That really engages the staff to participate in decision making. Company got the flexible working facilities and reward for extraordinary work.

Conclusion:

High performance working system is the best practice in Human resource management in this competitive global market. Successful implementation of High performance working can bring higher level of growth and profit for the companies. On the other hand, Employee engagement is one of the best practices in high performance working system. Different dimension of employee engagement can be achieved by successful implementation of particular Human resource policies, which has been discussed in the literature review. Different studies had proven the positive outcome of the strategy. But to get the best of it company must ensure that all the staffs and managers are involved with this strategy. High Commitment seven Human resource policies practice can create a high performance working environment in the company and that can bring a great success for the company as well. During writing this report the authors had learned about High performance working, its implementation, and benefits and got idea about different method of implementation in other companies as well. The research work for the report had given a clear view to the authors about employee engagement, its dimension, implementation and benefits. This research also gives the opportunity for the authors to learn about the best HR policies practice and its operational result.

High performance working system can be achieved by the multi skilled team (the team should work autonomous and semi autonomous), empowered frontline worker, extensive training programme. As an individual member of staff, they should get the information about the company’s current situation and get involved in decision making. To boost the company performance the best way is to implement the high commitment 7 HRM practices offered by P Feffer. But it should keep in mind that high performance working practice depends on the individual company’s goals, resources and employee’s level of involvement. Employee involvement can be achieved by involving the staff in company decision making, giving opportunity to develop them, giving freedom of their voice, offer them a great leadership and management. To implement the high employee engagement, management should work on following areas – Information sharing, consultation, financial participation, quality management, individual development etc. The cost involve in employee engagement is only to train the staff and a part from this staff only need to change their attitude and culture at work. The potential barriers of implementation include insufficient staff involvement, inadequate training, and lack of support from the management.

Recommendation:

In light of this research authors have come to an understanding that employee engagement is a very important factor in order to get high performance from the employees. To get the best out of employees in J&W plc the following suggestions have to be put in place:

The organisation needs to be open about communication with their employees. Employees need to know what direction the company is headed. They need to know the latest news about the company, the industry and most of all the profit or revenue statement of the company. This method helps employees in being aware of what is happening in the company. That will give them a chance to participate in future decision making for the business.
Training new employees not only in their job, but also in helping them adapt to the company culture. Extensive training and development must be given to employees to aid them to perform their functions. Regular employees must be given a refresher training course every 3-6 months to make them aware of changes or to help them perform their job better.

J&W plc needs the best people to work for the company. Hiring suitable employees reduces the need to fire employees. A company which fires a lot of employees can be viewed by existing employees as a threat to their job security.
Feedback forms and suggestion boxes should be placed in strategic places to help employees to voice out their concerns.
Employees have to been given feedback on their work from a supervisor or manager. This should be a one on one interactive session so that the employee does not feel embarrassed when feedback is given. During this one on one session the employee must be treated with upmost respect and negative feedback ought to be given in a manner which does not offend the employees.
Firstly, increase hourly wages of employees. Although this will put pressure on the company’s resources it will also have a positive impact on employee motivation and they will want to stay in the company for a longer period of time thereby reducing employee attrition.
Employees in sales and marketing departments can be given a performance bonus if they over achieve their targets.
Low level employees who have more customer interaction roles should be empowered to make decisions. They can be divided into small self managed teams with a group leader who will be responsible for them. This helps in making employees more accountable for their actions.

Action plan for J&W PLC:

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Appendix:

Figure 1.1Comaprison between High and Low performance work system. Source Harvard Business School

Figure : worker participation and response to High performance working practice.

J & W Plc high performance and employee involvement.

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