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Scott Thor
Doctor of Management
November 1, 2009
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Scott Thor – BUSG 708 – HR in High Performance Organizations
organizational leaders has led to a number of theories and techniques for improving
An organization that achieves financial results that are better than those of
its peer group over a longer period of time, by being able to adapt well to
changes and react to these quickly, by managing for the long term, by
can be attributed to what is known as a high performance work system (HPWS). This
paper seeks to provide an understanding of a HPWS, its link to the elements of human
bureaucracy, two management theories, that despite being developed nearly a century
ago, still have a significant influence on modern organizations. With these theories as
the foundation most modern businesses are built upon, the paper transitions into
defining and describing a HPWS that addresses some of the key weaknesses of
scientific management and bureaucracy. Also discussed are a set of principles for
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Scott Thor – BUSG 708 – HR in High Performance Organizations
designing a HPWS and critical success factors for implementing a HPWS. Next, the
paper describes the link between a HPWS and HRD in addition to how HRD plays a
critical role in the implementation and success of a HPWS. The paper concludes with a
developed nearly a century ago. In the first part of the twentieth century Fredrick
Winslow Taylor developed what he called “scientific management”. During this time
period Taylor began an effort to divide labor, leading to the creation of scientific
management. Taylor is best known for his research on studying workers and doing time
and motion studies, which were used to increase efficiency in the workplace. Taylor’s
4. Division of work
breaking down the work they were doing into its simplest form. Time and motion
studies were also conducted to understand how long it took for a particular task to be
completed. The first element gave Taylor the basis for improvement by providing a
baseline of performance.
With an understanding of the work, Taylor believed the selection of the workman
management’s job to select the workers best suited for the work. If workers were not
matched with the jobs they were doing he believed productivity would suffer.
The third element of scientific management consisted of bringing the worker and
science together. Without bringing the two together companies using the scientific
management principles could not realize the benefits they offered. In order to bring the
two together Taylor suggested management should offer the workman something he felt
was worthwhile for working under the conditions, essentially an incentive to make the
(1916) described, under the old system of management the workman did most of the
work, but with the new system work was divided into two parts. One component of the
work was now given to management, leaving the other for the workman. Taylor argued
the workman because each group was dependant on the other. Taylor’s work benefited
the workman greatly, increasing his earnings and also lowering the cost of goods
produced.
During the same time period Winslow developed scientific management Max
Weber believed that rules were the basis for decision-making and could replace the
1. Division of labor
2. Hierarchy
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Scott Thor – BUSG 708 – HR in High Performance Organizations
3. Rationality of rules
4. General rules
5. Written documentation
6. Technical expertise
Weber, like Taylor, believed that labor needed to be divided and specializations
created so that specific training could be given for each task. This would then lead to
greater organizational efficiency. Weber also believed that, like division of labor,
hierarchy needed to be created and divided amongst the organization to establish the
that having rational rules would displace the tendency of emotions playing into making
decisions. General rules were also a belief of Weber in which he believed that published
guidelines would replace the need for administrative systems and unpredictable
bureaucracy, aiding in the ability to trace actions taken by others that could be reviewed
Weber’s model also addressed the issue of recruitment. The technical expertise
of the individual, according to Weber, should be the basis for selection and promotion
as opposed to personal relationships. With the right fit between the individual and the
job, Weber believed that full and continuous employment could be realized, leading to
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Scott Thor – BUSG 708 – HR in High Performance Organizations
assurance that customer’s expectations would be achieved and the success of the
organization.
One could easily argue that much of the foundation in the modern organization is
based on the principles defined by Winslow and Weber nearly a century ago. Their work
created a model of efficiency, and is the basis of how many organizations still believe is
the most logical way to create a productive environment. Despite the success of the
model based on the work done by Winslow and Weber, it left little room for capturing the
motivation and creativity of workers. Jobs were based on narrow objectives and
repetitive tasks, leaving minimal opportunities for workers to contribute with their ideas
1. The model was based on managing stable and predictable situations, and
less effective.
2. The model was based on the assumption that workers were uneducated,
had little mobility in changing jobs, and were driven entirely by economic
individuals seeking more than just a paycheck the model began to break
down.
and bureaucracy (Roethlisberger, 1941; Maslow, 1943; McGregor, 1957). Based on the
belief that people wanted to contribute their ideas to help achieve the objectives of the
organization and find meaning in their work, several new concepts such as participative
management, team building, and job enrichment and enlargement began to take shape
The HPWS has been described and defined by several researchers, scholars,
and authors. There is no generally accepted definition of the HPWS, but many
similarities exist between the experts. Nadler, Gerstein, and Shaw (1992) define a
HPWS as:
practices, work structures, and processes that maximize employee knowledge, skill,
commitment and flexibility” (p. 690). They add to the definition by suggesting that a
organization.
dedication, and empowerment (Tomer, 2001). The primary difference between the
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Scott Thor – BUSG 708 – HR in High Performance Organizations
models previously defined grounded in the work of Winslow and Weber, commonly
referred to as the control-oriented approach, and a HPWS, is based on how the control
Companies that utilize the control-oriented approach assume that work must be
standardized, simplified, and specialized, and that management should use incentives
to motivate individuals (Lawler, 1992). As Lawler describes, “the thinking and controlling
part of work is separated from the doing of the work” (p. 28). Employees, especially
unthinking agents of the owners (Tomer, 2001). To the opposite, Lawler argues that in
coordinating their work with others in the organization. Lawler also describes the
environment of one in which employees should be expected to work without the need of
By defining a clear vision, mission, and objective, management sets the direction
for employees operating in a HPWS environment without the need to define step-by-
step instructions for achieving the goals of the organization. By doing so management
allows for the full utilization of each employee’s unique talents, which not only helps the
organization achieve its objectives, but also creates a system in which everyone can
were compiled to define a HPWS. From the thirteen practices Appelbaum et al. have
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Scott Thor – BUSG 708 – HR in High Performance Organizations
established what they describe as four unique “bundles”. Table 1 illustrates the
Practices Bundles
Group Problem Solving
Group Working Teamwork
Group Control
Group Incentives
Merit Pay
Profit Sharing Incentives
Individual Incentives
Workplace Incentives
Appraisal for Pay
Appraisal for Promotion Development
Appraisal for Training
Briefing Groups
Two-way Meeting
Communications
Table 1
empowerment where employees have the ability to make decisions and contribute to
problem solving activities that have an impact on their work. This ultimately leads to
creating greater commitment from all those involved in the decision making process,
Incentives also play a key part in creating and sustaining a successful HPWS.
where everyone is willing to provide ideas for improving the performance of the system
they work in, which results in overall improvement of the organization’s performance.
Incentives can take on a number of different forms, but in most cases are linked to
group performance.
bundle can also be viewed as the data that drives a HPWS. With increased
communication making better decisions becomes easier, and when the information
driving those decisions is readily available it increases the velocity at which they can be
determine the practices utilized in the creation of a HPWS. Gephart and Van Buren
(1996) argue that not all practices need to be implemented to achieve high
performance. What Gephart and Van Buren believe is required to achieve high
performance is synergy. Synergy is the result of alignment and fit of the practices along
with people who are committed and passionate about their work. Critical to creating
Designing a HPWS
HPWS design must be based on the organization’s needs. Despite this, HPWS
empowerment (Farias & Varma, 1998). Implementing a HPWS typically signifies a shift
improvement.
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Scott Thor – BUSG 708 – HR in High Performance Organizations
Perhaps most critical to the design of a HPWS is alignment. Gephart and Van
Buren (1996) suggest that a HPWS is more than high performance work, and an
organization will not achieve high performance unless their efforts are in alignment with
elements are in position with one another, thereby creating the potential for high
performance. Gephart and Van Buren suggest the following as a list of key elements
• Management practices
• Organizational structure
implementation, but is never fully complete. Gephart and Van Buren (1996) suggest that
full alignment is never achieved and the organization should always be “fine tuning” the
system to improve alignment. The design of the HPWS should allow for a continual
Nadler, Nadler, and Tushman (1997) have similar design principles to the
concept of alignment suggested by Gephart and Van Buren (1996), although they place
additional emphasis on the sharing of information and flexible work systems. Nadler et
al. identify the following ten principles for the design of a HPWS:
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Scott Thor – BUSG 708 – HR in High Performance Organizations
3. Clear vision, mission, and goals that help create a boundary within which the
Nadler et al. (1997) suggest the design of a HPWS starts with establishing a
clear link to the organization’s strategy. This begins by focusing outward on the
requirements of customers and then starting the process of developing the appropriate
organizational work processes. Teams are the second element of design and the core
of a HPWS. Nadler et al. argue that they should be designed around whole pieces of
the work.
boundaries ensures work teams understand where their decision-making ability starts
and ends. Controlling variance at the source allows teams to catch quality problems
early and implement solutions to prevent them from recurring. This design element also
the needs of the employees in the organization with the demands of the technical
system. Better decisions come from having the right data at the right time. Sharing of
information within a HPWS not only creates better results it gives ownership of
rotate through multiple assignments. It not only benefits the organization in the ability to
make rapid changes, but also in creating greater challenge and variety in the work of
employees. Human resource (HR) practices also need to be considered when designing
a HPWS to ensure the selection, incentive, and reward systems are congruent to the
HPWS.
The management structure, culture, and processes all need to support and
embrace the HPWS for it to be successful. A HPWS is typically a drastic departure from
doing the directing, and without the support of management a HPWS will likely fail. A
final aspect to the design of a HPWS is the ability to change. No HPWS is perfect and
changes are simply part of the process. Like any system, the HPWS must have a
mechanism in place to allow for flexibility based on changes in the environment the
An argument could be made that even more difficult than designing a HPWS is
the task of implementation. The concept of HRD and HPWS have many similarities. HR
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Scott Thor – BUSG 708 – HR in High Performance Organizations
professionals play a critical role in merging the two concepts that can ultimately lead to
understand the basic elements defining HRD. HRD combines the primary component of
HR, people, with the development of both people and the organization. Gilley, Eggland,
and Gilley (2002) refer to development of people as the increase in knowledge, abilities,
organization. This development encompasses the first two areas defining HRD,
performance. The final element of HRD is organizational development (OD). Gilley et al.
intervention activities related to the vision, mission, values, policies, procedures, and
improvement and change needs to exist. With this, the primary goal of HRD is
performance improvement and organizational change (Gilley et al., 2002). Bringing ID,
HRD, Gilley and Maycunich (2000) define HRD as, “the process of facilitating
and renewal” (p. 6). Figure 1 illustrates the four key elements of HRD.
• Training
• Con6nual
improvement
• Educa6on
• Incen6ves
• Crea6ng
a
learning
• Rewards
environment
• Recogni6on
• Micro
perspec6ve
Individual
Performance
Development
Management
Career
Organiza6onal
Development
Development
• Appraisal
process
• Improving
perfomance
capacity,
growth,
and
• Alignment
of
organiza6on
compe66veness
and
individual
goals
• Strategy
development
• Crea6ng
challenging
and
rewarding
work
• Macro
perspec6ve
one can begin to visualize the connection between HRD and a HPWS. The most
and organizational results, but also common to both systems is increasing the capacity
teams to solve problems that increase performance, and a strategic focus based on
ID and HPWS
both formal and informal activities (Gilley et al., 2002). Gilley et al. state that the
purpose of ID is, “to increase employee knowledge, skills, and competencies and/or to
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Scott Thor – BUSG 708 – HR in High Performance Organizations
improve behaviors in current jobs, at the same time addressing the immediate needs of
the organization as well as that of the employee” (p. 30). Appelbaum et al. (2000) state
that employees in a HPWS can only tap into their initiative, creativity, and knowledge if
they have the appropriate skills and knowledge, much of which comes through training
environment where individuals are challenged each day to increase their ability and
which the individual participates, playing a key role in developing a robust HPWS.
Gilley et al. (2002) define career development as, “an organized, planned effort
effort between employees and the organization” (p. 59). A similar alignment needs to be
in place for an effective HPWS to deliver results (Gephart & Van Buren, 1996). Without
alignment between the individuals utilizing the HPWS the expected results are less
likely to materialize. Also common between HRD and a HPWS is the use of an
appraisal process. One could argue that this process is the most important aspect of
each system, providing the feedback mechanism that translates into continual
improvement of not only the individual, but the entire system as well.
HRD (Gilley et al., 2002). Gilley et al. contend that performance management is strongly
describe HPT as a way of identifying barriers to success faced by employees, and the
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Scott Thor – BUSG 708 – HR in High Performance Organizations
process of removing them to allow improvement, and the full realization of employee
potential. In a HPWS employees are constantly faced with the barriers Fuller and
Farrington describe. Gilley et al. also prescribe the strategy of developing self-directed
employees, which is at the heart of a HPWS. A final similarity lies in the use of incentive
systems for recognizing and rewarding performance. Gilley et al. suggest a strategy of
rewarding team performance rather than individual performance that will lead to
OD and HPWS
The final component in HRD is OD. There are several definitions of OD, but most
share common characteristics and only differ in scope and the intention of change
(Dunn, 2006). OD requires involvement from all employees to be effective and the
support of top management (Conner, 1992; Kotter, 1996), views organizations from a
system-wide perspective and includes planned initiatives directed by third party change
agents that are ongoing (Burke, 1992; French & Bell, 1995), and focuses on
measurable results that are strategically based (French & Bell, 1995; Kotter, 1996;
improvement (Gephart & Van Buren, 1996; Nadler et al., 1997; Hanna, 1988), requires
commitment from all levels of the organization (Nadler et al., 1997), and supports the
written communication, but also the data used in decision-making. There is no doubt
that communication and quality data are critical to all elements of HRD. Table 2
summarizes the commonalities between the elements of HRD and the HPWS bundles.
A HPWS has the potential to create significant positive results such as improved
productivity and increased quality levels. They can also lead to increased stress levels
King (1995) summarizes the results of several studies related to HPWS. The
work practices. The work practices examined include skill training, compensation
Skill training focuses on quality and the prevention of errors, which requires
employees to have a broader understanding of the processes they use and the
technology used to measure them. Researchers found that training helped reduce scrap
rates, and by doubling the initial training time of workers from 15 to 30 hours resulted in
a seven percent decrease in scrap. Eight of the studies also showed an increase in
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Scott Thor – BUSG 708 – HR in High Performance Organizations
organizations that offered profit sharing productivity was three to five percent higher
than in those without a program. The use of profit sharing was also linked to increased
the existence of quality teams, work teams, and work councils and the number of
employees participating in them. King (1995) concludes that work teams were more
likely to be successful when they have decisions making power, such as in work teams
and councils, rather than consultative power more common to quality teams.
The overwhelming majority of the literature on HPWS praise the positive aspects
of implementing such a system, and most research points to very few negative
made that by increasing the responsibilities of workers and putting less burden on
management could lead to a more stressful and intense environment. Workers need to
be ready to deal with this added stress as they transition from executing decisions made
Despite all the positive related to a HPWS most organizations have been slow to
implement (Tomer, 2001). Several potential reasons for the slow adaption include high
management resistance, relationships with labor unions, and institutional barriers such
Conclusion
HPO. One of the keys to creating strategic advantage is developing what cannot be
competitors when they are viewed individually, but the advantage and the power in a
HPWS lies in the fact that not one individual HPWS practice can return the results
combining several of them can. Combining the right compilation of HPWS practices not
only has the potential to generate substantial results, it also has the potential to create
elements making up HRD and the practices of a HPWS. By taking on this role the
traditional view of HR will continue to navigate away from the cost-driven transactional
activities commonly associated with HR, and provide an opportunity to build value in the
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