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Solution
Question 4 (AC 1.4)
Critically evaluate evidence to demonstrate that the introduction of ‘high performance work practices’ in the field of people management will lead to sustained organisational success across all industrial sectors. Justify your answer with reference to leading published studies.
Question 4
High performance work practices (HPWPs) are people management techniques through which employee motivation, productivity and long-term organisational success will be achieved (Mohd Nasurdin et al., 2020). Selective hiring, ongoing skills training and decentralised decision making are key practices under these techniques. Across a number of sectors, it is evident that HPWPs enhance organisational resilience and innovation, as well as employee retention. Nevertheless, the effectiveness of HPWPs is influenced by cultural and resource-based constraints which are not industry specific. This is since there are varying demands and expectations in all sectors and business environment. The best practice is hence to consider the evaluation of all existing approaches for appropriate recommendations.
Role in Boosting Productivity and Innovation
HPWPs have substantially improved employee productivity and spurs innovation, especially in knowledge-intensive sectors. Bhatti et al. (2020), for example, discovered that an increase of 20 percent in productivity was obtained by HPWPs like performance-based incentives and collaborative decisions in technology firms. With HPWPs, these companies get many benefits because they inspire such creativity and autonomy in employees, which is particularly important for problem solving and innovation. Similarly, Kutieshat & Farmanesh (2022) noted that in knowledge-based industries, HPWPs increased creativity by creating a more engaged and experienced workforce capable of handling demanding tasks. However, the effectiveness of HPWP’s in increasing productivity is dependent on the industry in question. In a manufacturing context, for instance, Imran & Atiya (2020) find that the effects of HPWPs on innovation and productivity are limited. Likewise, in industries with rigid operational processes, techniques like employee empowerment or extensive training may not make much of a difference. Such sector-specific variation indicates that HPWPs can bring substantial productivity and innovation benefits, but only if their implementation is tailored towards firms’ areas of core functions and operations dynamics. Adopting these practices may be beneficial in this way as organisations adapt these practices to the particular drivers of productivity in a sector so that the benefits gained through HPWPs can be maximised.
Strengthening Employee Engagement and Retention
Sustaining organisational stability through HWPs plays an important role through engagement and retention of employees. Isimoya et al (2020) reported that organisational implementation of HPWPs had increases in engagement and retention by up to 15%, when such organised career development programme was coupled with individual performance recognition. This is because in such environments, employees were satisfied with their job, committed and they felt a sense of belonging and recognised effort. On the other hand, HPWPs have helped reduce burnout and increase retention rates in healthcare sector though team empowerment and skill development (Memon et al., 2020). Yet the retention benefits of HPWPs may differ among industries with higher turnover, such as retail where job tenures are generally short. While HPWPs offer flexible scheduling and performance-based incentives to improve engagement in retail settings, transient nature of the sector limits its overall long-term effects (Datta et al., 2021). For this reason, HPWPs can play a major part in retention for many industries, even though different industries might require alternative approaches to secure employees for the long-term in sectors characterised with temporary work structures. Overall, HPWPs have strong potential for engagement and retention, but adaptation to context and sector specific sources of support is essential for impact in a range of contexts and sectors.
Increasing Operational Efficiency in Resource-Intensive Industries
In industries where processes generally are resource intensive, HPWPs can contribute to operational efficiency and resulting waste reduction. For example, manufacturing sector, lean management and team-based problem solving, helps to enhance output quality as well as with efficiency of cost. The research of Rubel et al. (2020) sourced that HPWPs in these sectors, such as standardised training and collaborative troubleshooting, resulted in lower error rates and greater productivity. The organisations benefit from these practices by enhancing the employees work in terms of effective and efficient practices. Yet, the demand for resources in some organisations makes HPWPs unfeasible (Hauff et al., 2020). For example, small and medium enterprises in resource intensive industries, such as energy or traditional manufacturing find it challenging to maintain the financial commitment that comprehensive HPWP require, resulting in some firms reducing or abandoning the HPWs as observed by Obeng et al. (2021). Secondly, employee empowerment initiatives are less effective in structured work environment as in manufacturing. This calls for fitting HPWPs to resource intensive sector needs. Organisations can ensure a balance between positive impact of HPWPs and financial and structure considerations by customising the HPWPs to optimise the operational efficiency within budgetary limits.
Enhancing Organisational Adaptability in Diverse Cultural Contexts
HPWPs promote practices which improve flexibility and promote cross functional collaboration and thus useful for enhancing an organisation’s adaptability especially in multicultural settings. In multinational corporations, Madi Odeh et al. (2021) demonstrate that HPWPs, such as inclusive decision making, cultural sensitivity training and empowerment initiatives, helped increase adaptability and responsiveness of the company in dynamic global markets. These practices are meant to create space for employees from various different cultural backgrounds to make meaningful contributions towards success of an organisational goal to maintain an adaptable workforce that can deal with the different market challenges. However, the success of HPWPs
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