Case study 9 high performance work systems HIGH PERFORMANCE WORK SYSTEMS AT ORLEY COUNCIL

Case Study High-performance Work Systems HIGHPERFORMANCE WORK SYSTEMS AT ORLEY COUNCIL The case Orley Council is a medium-sized borough council with about 4,000 staff covering all the normal local government functions A traditional approach to personnel management has been adopted with the following main features: ● recruitment through advertisements and agencies (no selection tests used); ● conventional job descriptions available for most jobs, listing duties in some detail; ● a competency framework has been developed that is used in the analysis of training needs but it has not yet been fully applied as an aid to selection interviewing or performance management; ● a performance appraisal system is in operation using a rating scale – there is evidence that managers are not particularly enthusiastic about it and that staff think it just exists as a stick to beat them with; ● extensive supervisory training takes place, administered by external providers; ● a policy to encourage personal development planning exists but is not applied comprehensively; ● a multi-graded pay structure (16 grades) is in place; progression is entirely through service-related increments; ● the standard local government job evaluation scheme is used The newly appointed Director of HR has been given a brief to review all aspects of the personnel/HR practices adopted by the council and produce a people strategy The Comprehensive Performance Assessment has given the council two stars and reports that in general it is improving But the report criticized the council for a failure to pay sufficient attention to improving performance and commented that a strong performance culture did not appear to exist The Director of HR was therefore asked by the Chief Executive to pay particular attention to this criticism The Director of HR consulted the DTI (now the Department of Business, Enterprise and Regulatory Reform) report on high-performance working practices, which described the concept in some detail and included a number of interesting case studies, none of which, unfortunately, was for a local authority He referred to the Tavistock Institute 2006 report for the Local Government Board on future workforce issues He noted that the report contained the views of 10 leading chief executives on their key workforce challenges, which were: To improve general management skills (including relationship management, sophisticated project management, strategic management and management of structural change) To develop a flexible, customer-orientation among frontline staff To become an employer of preference in an increasingly tight labour market He also noted the report’s conclusion that the reluctance to change in local government is often well grounded or deeply embedded; for instance: ● High-performance/high-commitment HRM tends to get introduced under particular circumstances ● A strategic approach to HRM does not necessarily imply a transformational HR approach ● There are rational alternative choices and other levers for driving change ● There are less rational forces at work too (for instance between members and officers); ● The organization of local government around professions continues to have profound effects and cannot be wished away Finally, he looked up the e-reward case study on Lloyds TSB in which was reproduced their definition of a high-performance organization, which read as follows: ● People know what's expected of them – they are clear about their goals and accountabilities ● They have the skills and competencies to achieve their goals ● High performance is recognized and rewarded accordingly ● People feel that their job is worth doing and that there's a strong fit between the job and their capabilities ● Managers act as supportive leaders and coaches, providing regular feedback, performance reviews and development ● A pool of talent ensures a continuous supply of high performers in key roles ● There's a climate of trust and teamwork, aimed at delivering a distinctive service to the customer The task Prepare proposals on the high-performance strategy that the council should adopt You will need to set out the main areas that might be covered by a high-performance work system (HPWS), indicate priorities and a development programme, consider how the considerable changes that might be involved should be resourced and managed, and produce a business case for any new policies and practices you propose You should refer to relevant research on HPWSs, including research that provides evidence on the impact such a system could make on firm performance Comments This case is designed to illustrate how an HPWS might operate in practice In dealing with it, the emphasis should be on producing realistic proposals Taking into account the comments made by the Tavistock Institute quoted above, there may well be problems in trying to go too far too fast It should be remembered that funds will be limited and the business case should emphasize the pay off from any performance improvements (productivity, customer service, etc) that might result from introducing an HPWS approach There has been a considerable amount of research on HPWSs, for example: Appelbaum, E, Bailey, T, Berg, P and Kallberg, A I (2000) Manufacturing Advantage: Why high performance work systems pay off, ILR Press, Ithaca, NY Arthur, J (1994) Effects of human resource systems on manufacturing performance and turnover, Academy of Management Review, 37 (4), pp 670–87 Boxall, P (2003) HR strategy and competitive advantage in the service sector, Human Resource Management Journal, 13 (3), pp 5–20 King, J (1995) High performance work systems and firm performance, Monthly Labour Review, May, pp 29–36 Tsai, C-J (2006) High performance work systems and organizational performance: an empirical study of Taiwan’s semiconductor design firms, International Journal of Human Resource Management, 17 (9), pp 1512–30