Copyright © 2014 by the McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

FUNDAMEN

TALS

OF

HUMAN RESOURCE

MANAGEMENT

5TH E

DITIO

N

BY R

.A. N

OE, J.

R. HOLL

ENBECK, B

.

GERHART, A

ND P.M. W

RIGHT

CHAPTER 16 CREATING AND

MAINTAINING HIGH-PERFORMANCE

ORGANIZATIONS

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Need to Know

1. High-performance work systems and their elements and outcomes.

2. Conditions that create a high-performance work system.

3. How HRM can contribute to high performance.

4. Role of HRM technology in high-performance work systems.

5. Ways to measure the effectiveness of HRM.

1. High-performance work systems and their elements and outcomes.

2. Conditions that create a high-performance work system.

3. How HRM can contribute to high performance.

4. Role of HRM technology in high-performance work systems.

5. Ways to measure the effectiveness of HRM.

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High-Performance Work Systems

High-performance work system – right combination of people, technology, and organizational structure that makes full use of the organization’s resources and opportunities in achieving its goals.

• Each of these elements must fit well with the others in a smoothly functioning whole.

High-performance work system – right combination of people, technology, and organizational structure that makes full use of the organization’s resources and opportunities in achieving its goals.

• Each of these elements must fit well with the others in a smoothly functioning whole.

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Figure 16.1: Elements of a High-Performance Work System

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5 Elements of a High-PerformanceWork System

1. Organizational structure: way organization groups its people into useful divisions, departments, and reporting relationships.

2. Task design: determines how details of the organization’s necessary activities will be grouped, whether into jobs or team responsibilities.

3. People: well suited and well prepared for their jobs.

4. Reward systems: encourages people to strive for objectives that support organization’s overall goals.

5. Information systems: enables sharing information widely.

1. Organizational structure: way organization groups its people into useful divisions, departments, and reporting relationships.

2. Task design: determines how details of the organization’s necessary activities will be grouped, whether into jobs or team responsibilities.

3. People: well suited and well prepared for their jobs.

4. Reward systems: encourages people to strive for objectives that support organization’s overall goals.

5. Information systems: enables sharing information widely.

In a high-performance work system, all the elements – people, technology, and organizational structure – work together for success.

In a high-performance work system, all the elements – people, technology, and organizational structure – work together for success.

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Outcomes of a High-PerformanceWork System

Outcomes of a high-performance work system include: higher productivity and efficiency that contribute

to higher profits high product quality great customer satisfaction low employee turnover

Outcomes of a high-performance work system include: higher productivity and efficiency that contribute

to higher profits high product quality great customer satisfaction low employee turnover

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Figure 16.2: Outcomes of a High-Performance Work System

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Outcomes of a High-PerformanceWork System Outcomes of each employee and work

group contribute to the system’s overall high performance.

Organization’s individuals and groups work efficiently, provide high-quality goods and services, etc., and contribute to meeting the organization’s goals.

When the organization adds or changes goals, people are flexible and make changes to as needed to meet the new goals.

Outcomes of each employee and work group contribute to the system’s overall high performance.

Organization’s individuals and groups work efficiently, provide high-quality goods and services, etc., and contribute to meeting the organization’s goals.

When the organization adds or changes goals, people are flexible and make changes to as needed to meet the new goals.

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10 Conditions that Contribute toHigh Performance

1. Teams perform work.2. Employees participate in selection.3. Employees receive formal performance feedback

and are involved in performance improvement process.

4. Ongoing training is emphasized and rewarded.5. Employees’ rewards and compensation relate to

company’s financial performance.6. Equipment, work processes and technology

encourage maximum flexibility and interaction among employees

1. Teams perform work.2. Employees participate in selection.3. Employees receive formal performance feedback

and are involved in performance improvement process.

4. Ongoing training is emphasized and rewarded.5. Employees’ rewards and compensation relate to

company’s financial performance.6. Equipment, work processes and technology

encourage maximum flexibility and interaction among employees

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10 Conditions that Contribute toHigh Performance

7. Employees participate in planning changes in equipment, layout, and work methods.

8. Work design allows employees to use variety of skills.

9. Employees understand how their jobs contribute to finished product or service.

10. Ethical behavior is encouraged.

7. Employees participate in planning changes in equipment, layout, and work methods.

8. Work design allows employees to use variety of skills.

9. Employees understand how their jobs contribute to finished product or service.

10. Ethical behavior is encouraged.

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Learning Organizations

Learning organization – an organization that supports lifelong learning by enabling all employees to acquire and share knowledge.

• Employees have resources for training, and they are encouraged to share their knowledge with colleagues.

• Managers take an active role in identifying training needs and encouraging the sharing of ideas.

Learning organization – an organization that supports lifelong learning by enabling all employees to acquire and share knowledge.

• Employees have resources for training, and they are encouraged to share their knowledge with colleagues.

• Managers take an active role in identifying training needs and encouraging the sharing of ideas.

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5 Key Features of Learning Organizations

1. Continuous learning – each employee’s and each group’s ongoing efforts to gather information and apply the information to their decisions.

2. Knowledge is shared – one challenge is to shift the focus of training away from teaching skills and toward a broader focus on generating and sharing knowledge.

3. Critical, systematic thinking – is widespread and occurs when employees are encouraged to see relationships among ideas and think in new ways.

1. Continuous learning – each employee’s and each group’s ongoing efforts to gather information and apply the information to their decisions.

2. Knowledge is shared – one challenge is to shift the focus of training away from teaching skills and toward a broader focus on generating and sharing knowledge.

3. Critical, systematic thinking – is widespread and occurs when employees are encouraged to see relationships among ideas and think in new ways.

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5 Key Features of Learning Organizations

4. Learning culture – a culture in which learning is rewarded, promoted, and supported by managers and organizational objectives.

5. Employees are valued – the organization recognizes that employees are the source of its knowledge. It therefore focuses on ensuring the development and well-being of each employee.

4. Learning culture – a culture in which learning is rewarded, promoted, and supported by managers and organizational objectives.

5. Employees are valued – the organization recognizes that employees are the source of its knowledge. It therefore focuses on ensuring the development and well-being of each employee.

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Passion and occupational intimacy

Passionate people are fully engaged with something so that it becomes part of their sense of who they are.

Feeling this way about one’s work has been called occupational intimacy.

HR has a significant role in creating these conditions

Passionate people are fully engaged with something so that it becomes part of their sense of who they are.

Feeling this way about one’s work has been called occupational intimacy.

HR has a significant role in creating these conditions

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Test Your Knowledge

Charlotte is a manager overseeing the work of a team. Which of the following behaviors would empower the team the least?

a) Opening lines of communication between the team and other groups within the organization.

b) Directing the team and monitoring their day-to-day activities.

c) Ensure the team has the resources they need.

d) Keep the team informed as new, relevant information becomes available.

Charlotte is a manager overseeing the work of a team. Which of the following behaviors would empower the team the least?

a) Opening lines of communication between the team and other groups within the organization.

b) Directing the team and monitoring their day-to-day activities.

c) Ensure the team has the resources they need.

d) Keep the team informed as new, relevant information becomes available.

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Test Your Knowledge

Kamran has worked for the same company for 3 years, is enthusiastic and passionate about his work, hasn’t missed a day in two years, and has several close friends he enjoys working with. Which of the following best describes Kamran?

a) He is satisfied with his job.b) He is empowered.c) He is experiencing occupational intimacy.d) He is probably going to quit soon.

Kamran has worked for the same company for 3 years, is enthusiastic and passionate about his work, hasn’t missed a day in two years, and has several close friends he enjoys working with. Which of the following best describes Kamran?

a) He is satisfied with his job.b) He is empowered.c) He is experiencing occupational intimacy.d) He is probably going to quit soon.

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ETHICS

Organizational systems can promote ethical behavior, including

• a written code of ethics• performance measures that include

ethical standards • swift discipline for misdeeds• channels for employees to seek help• training in ethical decision making

Organizational systems can promote ethical behavior, including

• a written code of ethics• performance measures that include

ethical standards • swift discipline for misdeeds• channels for employees to seek help• training in ethical decision making

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Table 16.1: HRM Practices that Help Organizations Achieve High PerformanceTable 16.1: HRM Practices that Help Organizations Achieve High Performance

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Performance Management

Each aspect of performance management should be related to the organization’s goals.

Business goals should influence the: kinds of employees selected and their training requirements of each job measures used for evaluating results

The organization: identifies what each department must do to achieve the

desired results defines how individual employees should contribute to

their department’s goals

Each aspect of performance management should be related to the organization’s goals.

Business goals should influence the: kinds of employees selected and their training requirements of each job measures used for evaluating results

The organization: identifies what each department must do to achieve the

desired results defines how individual employees should contribute to

their department’s goals

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Figure 16.3: Employee Performance as a Process

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Performance Management

Guidelines to make the performance management system support organizational goals:

1. Define and measure performance in precise terms.

2. Link performance measures to meeting customer needs.

3. Measure and correct for the effect of situational constraints.

Guidelines to make the performance management system support organizational goals:

1. Define and measure performance in precise terms.

2. Link performance measures to meeting customer needs.

3. Measure and correct for the effect of situational constraints.

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HRM NEW Technologies

• Transaction Processing: Computations and calculations used to review and document HRM decisions and practices, including documenting employee relocation, payroll expenses, and training course enrollments.

• Decision Support Systems: Systems designed to help managers solve problems that usually include a "what if" feature.

• Expert Systems: Computer systems incorporating decision rules of people deemed to have expertise in a certain area.

• Relational Databases: Stores data in separate files that can be linked by common elements.

• Transaction Processing: Computations and calculations used to review and document HRM decisions and practices, including documenting employee relocation, payroll expenses, and training course enrollments.

• Decision Support Systems: Systems designed to help managers solve problems that usually include a "what if" feature.

• Expert Systems: Computer systems incorporating decision rules of people deemed to have expertise in a certain area.

• Relational Databases: Stores data in separate files that can be linked by common elements.

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HRM Online: E-HRM

• Improving HRM effectiveness through online technology.

• Speed requirements of business force HRM managers to explore how to leverage technology for delivery of HRM activities.

• With Internet technology, organizations use E-HRM to let all employees help themselves to HR information whenever needed.

• E-HRM uses social media applications.• Cloud computing enables access to information

that’s delivered on demand from any device 24/7.

• Improving HRM effectiveness through online technology.

• Speed requirements of business force HRM managers to explore how to leverage technology for delivery of HRM activities.

• With Internet technology, organizations use E-HRM to let all employees help themselves to HR information whenever needed.

• E-HRM uses social media applications.• Cloud computing enables access to information

that’s delivered on demand from any device 24/7.

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Measuring HRM Effectiveness

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Customer-Oriented Perspective of HRM

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Table 16.3: Key Measures of Success for an HRM Audit

Table 16.3: Key Measures of Success for an HRM Audit

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Analyzing the Effect of HRM Programs

HR should be able to improve their performance through some combination of greater efficiency and greater effectiveness.

• Greater efficiency – HR uses fewer and less-costly resources to perform its functions.

• Greater effectiveness – what HR does has a more beneficial effect on employees and the organization’s performance.

• HR analytics measure HRM efficiency and effectiveness.

HR should be able to improve their performance through some combination of greater efficiency and greater effectiveness.

• Greater efficiency – HR uses fewer and less-costly resources to perform its functions.

• Greater effectiveness – what HR does has a more beneficial effect on employees and the organization’s performance.

• HR analytics measure HRM efficiency and effectiveness.

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Test Your Knowledge

• The HR director of a medium-sized corporation spends 90% of his time meeting and working with fellow HR staff. He is primarily concerned with ensuring the company meets all legal requirements with regard to HR activities. This HR director:

a) Is a major contributor to a high-performance organization

b) Has a strategic focusc) Is concerned with customer satisfactiond) Has limited the utility and value he could bring

to the organization

• The HR director of a medium-sized corporation spends 90% of his time meeting and working with fellow HR staff. He is primarily concerned with ensuring the company meets all legal requirements with regard to HR activities. This HR director:

a) Is a major contributor to a high-performance organization

b) Has a strategic focusc) Is concerned with customer satisfactiond) Has limited the utility and value he could bring

to the organization

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Summary

A high-performance work system is the right combination of people, technology, and organizational structure that makes full use of the organization’s resources and opportunities in achieving its goals.

A high-performance work system achieves the organization’s goals, typically including growth, productivity, and high profits.

A high-performance work system is the right combination of people, technology, and organizational structure that makes full use of the organization’s resources and opportunities in achieving its goals.

A high-performance work system achieves the organization’s goals, typically including growth, productivity, and high profits.

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Summary

• By taking a customer-oriented approach, HRM can improve quality by defining internal customers who use its services and determining whether it is meeting those customers’ needs.

• Auditing HRM and measuring HRM effectiveness to analyze specific programs or activities can determine if a program met its objectives and whether it delivered value in an economic sense.

• By taking a customer-oriented approach, HRM can improve quality by defining internal customers who use its services and determining whether it is meeting those customers’ needs.

• Auditing HRM and measuring HRM effectiveness to analyze specific programs or activities can determine if a program met its objectives and whether it delivered value in an economic sense.