A considerable amount of studies (as summarized below) have been conducted that demonstrate that the impact of high performance work systems is positive. A more negative study is also summarized.
US Department of Labor (1993)
In a survey of 700 organizations, the US Department of Labor found that firms that used innovative human resource practices showed a significantly higher level of shareholder and gross return on capital.
Jeffrey King cites a survey of Fortune 1000 companies in the US, revealing that 60 per cent of those using at least one practice increasing the responsibility of employees in the business process reported that the result was an increase in productivity, while 70 per cent reported an improvement in quality.
He examined the impact of the use of certain practices in detail. A study of 155 manufacturing firms showed that those that had introduced a formal training programme experienced a 19 per cent larger rise in productivity over three years than firms that did not introduce a training programme. Research in the use of gainsharing in 112 manufacturing firms revealed that defect and downtime rates fell 23 per cent in the first year after the approach was introduced. His review of 29 studies on the effects of workplace participation on productivity indicated that 14 had a positive effect on productivity, only two had negative effects, and the rest were inconclusive.
However, he noted that such work practices may have only a limited effect unless they are elements of a coherent work system. Further research examined changes over time in 222 firms and found that these and other practices are associated with even greater productivity when implemented together in systems.
He concluded that the evidence suggests that it is the use of comprehensive systems of work practices in firms that is most closely associated with stronger firm performance. Yet he noted that ‘the nature of the relationship between high performance work practices and productivity is not clear’.
Varma et al (1999)
A survey of 39 organizations was conducted to examine the antecedents, design and effectiveness of high performance initiatives. Results indicated that HPWS are primarily initiated by strong firms that are seeking to become stronger. First and foremost, firms reported that in general their HPWS:
- had a significant impact on financial performance;
- created a positive culture change in the organization (eg cooperation and innovation);
- created higher degrees of job satisfaction among employees;
- positively influenced the way in which work was designed;
- led to marked improvement in communication processes within the organization.
In particular, the use of team-based and non-financial rewards was closely related to improved performance, as was rewarding people for improving their competencies.
Ramsay et al (2000)
The aim of this research was to explore linkages from HPWS practices to employee outcomes and via these to organizational performance. They refer to the existence of a ‘black box’, meaning that while the introduction of a HPWS may be associated with improved performance, no researchers have yet established how this happens.
Their research was based on data from the UK 1998 Workplace Employee Relations Survey. They commented that ‘the widely held view that positive performance outcomes from HPWS flow via positive employee outcomes has been shown to be highly questionable’, a finding that ran counter to most if not all other studies. They admit that their analysis was ‘perhaps too simplistic to capture the complex reality of the implementation and operation of HPWS’, but they note, realistically, that ‘there are major limitations to the strategic management of labour which severely constrain the potential for innovative approaches to be implemented successfully’.
Appelbaum et al (2000)
A multifaceted research design was used by the authors in their study of the impact of HPWS. This included management interviews, the collection of plant performance, and data surveys of workers on their experiences with workshop practices. Nearly 4,400 employees were surveyed and 44 manufacturing facilities were visited.
The findings of the research in industry were that:
- in the steel industry HPWS produced string positive effects on performance, for example, substantial increases in uptime;
- in the apparel industry the introduction of a ‘module system’ (ie group piecework rates linked to quality as well as quantity rather
than individual piecework, plus multiskilling) dramatically speeded up throughput times, meeting consumer demands for fast delivery;
- in the medical electronics and imaging industry those using a HPWS ranked highly on eight diverse indicators of financial performance and production efficiency and quality.
The impact of HPWS on individual workers was to enhance:
- trust by sharing control and encouraging participation;
- intrinsic rewards because workers are challenged to be creative and use their skills and knowledge – discretion and autonomy are the task level decisions most likely to enhance intrinsic rewards;
- organizational commitment through opportunity to participate, and incentives that make people feel that organizational relationships are beneficial for them;
- job satisfaction because of participation, perception of fairness in pay and adequate resources to do jobs (inadequate resources is a cause of dissatisfaction, as is working in an unsafe or unclean environment).
Taken as a whole, the results suggested that the core characteristics of HPWS – having autonomy over task-level decision making, membership of selfdirecting production and off-line teams, and communication with people outside the work group – generally enhance workers’ levels of organizational commitment and satisfaction.
Sung and Ashton (2005)
This survey of high performance work practices (HPWP) was conducted in 294 UK companies. It included 10 case studies. Its aim was to study the relationship between the adoption of such practices and a range of organizational outcomes. A list of 35 HPWP practices was drawn up under the three headings of high involvement practices, human resource practices, and reward and commitment practices.
The survey provided evidence that the level of HPWP adoption as measured by the number of practices in use is linked to organizational
performance. Those adopting more of the practices as ‘bundles’ had greater employee involvement and were more effective in delivering adequate training provision, managing staff and providing career opportunities.
Research was conducted in 196 small businesses to test the hypothesis that HPWS create a human resource advantage by aligning key employee attributes and the strategic goals of the firm and by adapting their workforce attributes in response to new strategic circumstances. Dynamic workforce alignment exists when firms have ‘the right types of people, in the right places, doing the right things right’, and when adjustments are readily made to their workforces as the situation changes.
The research showed that there was a strong positive relationship between workforce alignment and sales growth when adaptation was high.