Best Practice and High Commitment HRM

Introduction

What is high commitment HRM?

It is a set of HR practices that has the potential to contribute towards organisational performance. They are mainly to increase labour turnover, reduce absenteeism, improvise employees behavior and attitude, improve quality and customer service. This has been argued by a set of US academics that there are a set of hr practices which can increase the productivity and organisational performance, these practices are good for the workers and the companies perspective, because it improves on employment security, training and development and the from the companies end it improves on the quality and the overall organisational performance.

The best practices according to Pfeffer J (1998):

• Employment security and internal labour markets
• Selective hiring
• Extensive training, learning and development
• Team working
• High compensation contingent on performance
• Performance review appraisal and career development
• Reduction of status differentials/ harmonisation
• Work life balance
• Employment security and internal labour markets.

This practice says that the company cannot ask everything from its employees without some expectation of employment security, which as a major concern over the employees future, but the author argues that how much of employment security the company can provide, the company cannot allow its employees to stay for their rest of their life nor they can sack the employees when required. The author considers this has one of most vital principles of high commitment

Selective hiring and sophisticated selection

“Recruiting and retaining outstanding people and capturing a stock of exceptional human talent ” (Boxall 1996 , p 66-67)

The author says that the most of the companies want to recruit those who can show commitment, team working skills and trainability in them. The company should be careful while defining the job profile in the advert so as to reduce the number of applications. The company should use precise techniques to recruit. The company should make use psychometric tests, structured interviews and work simulator in order to select the best. This process should be conducted by professional individuals. The author also points out the best key point about best practice selection is that the process of selection should be integrated and systematic, the company should make use of the techniques which are appropriate for the position and the organization.

Extensive training, learning and development

(kersley et al, 2005, p.84) says extensive training is to those companies who emphasis more on quality and customer service, where it is perceived to be crucial for organisational success.

This practice says that the company having selected the best, the company should ensure they train their employees to be forefront in their field of work, the author also states, their has been a growing importance of individual and organisational learning to gain competitive advantage.

(wright and gardner 2003, p312)says the word learning is very crucial as it demonstrates employer willingness to encourage and facilitate employee development rather than providing training to cover short term crisis.

Employee involvement and participation and workers voice

(Marchington and Wilkinson, 2005) say that there are numbers why EIP is an essential component of the high commitment. Firstly there should be communication about the company financial performance, strategy and operational matters. The message should be conveyed that they are to be trusted and treated in a positive manner. Secondly team working will provide a platform for workers to offer their suggestions and contribute towards organisational performance. Thirdly the management will consider the participation of workers to put across their ideas before decisions are ultimately made. EIP appears in prescription foe best practice or high commitment HRM, this may include downward communications, upward problem solving groups, all of which are designed to increase the involvement of individual employees in their workplace. The author also argues that it is difficult to compare results across studies and arrive at any firm conclusions about the importance of EIP to high commitment HRM. EIP is often little more than a cascade of information from management. The objective of such schemes such as team briefing is to reinforce the supervisor as an information disseminator.

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Self-managed teams/Team working

(Marchington, 1999) says, team working as been identified by many employers as a fundamental component of organization success. Pfeffer, 1998, p76) says, team working is seen as a platform to make a better decision-making and the achievement of more creative solutions. The author also states that there is evidence that the employees who work in teams, generally report higher levels of satisfaction than their counter parts who work under the traditional regime.

High compensation contingent on performance

(Pfeffer 1998) says, that there are two elements to this practice, higher than average compensation and performance related reward, both these elements say that the employees are to be awarded for their superior contributions. The author says the pays should be competitive, to retain and to attract high quality labour. It should reflect different levels of workers contribution like being paid as regular bonus or through profit sharing schemes. (Huselid 1995) says two measures for this factor. One being the proportion of the workforce who have access to company incentive schemes, and the proportion, whose compensation is determined by performance appraisals.

Performance review, appraisal and career development

Performance review, appraisal and career development as key element in high commitment HRM, they help in defining performance expectations and in providing employees with their targets to aim for. There should be regular team meetings between the staff and the managers to review and feedback to the staff through performance appraisals. Performance review is concerned, that the current levels of performance are acceptable, and instigating action if they fall below expectations, it is also important in helping the workers to plan their future in the organization and in determining any further learning and training needs. Employers should be able to communicate clearly through the appraisal process, so as to link between the organisational performance and hr practices.

Reduction of status differences /harmonisation

This practice states that the companies which employ manual workers, should convey message to these workers and the lower level staff that they are also valuable assets and deserve to be treated in a similar way to their senior colleagues. This practice allows the employees to offer ideas within an open management culture. This practice can be achieved by having staff uniforms, shared canteens and car parking facilities. This helps to break down artificial barriers between different groups of staff, which will in turn encourage and support team working and flexibility. The company should extend share ownership to the workforce and by doing this status difference can be reduced.

Work life balance

Most of the companies are emphasizing on work life balance. Mainly women employees because they have to work and take care of the family too. many of the companies are changing their policies to attract and retain those women employees who have responsibility.(Houston 2005, CIPD 2006)

After briefly explaining the best practices of high commitment HRM, I can understand that each of these practices is important in improvising on the organization growth. Most of the authors say that these practices cannot be implemented in isolation, but they should implemented in a package (Mac duffie 1995) most of the literature says that these practices support and mutually reinforce each other, for example workers are more positive if there is employment security and status free, workers show more interest in team working if their efforts are rewarded with performance related pay, work life balance, access to training opportunities and share ownership. We can understand if there was a formal way of a selection and induction employees are more likely to adopt flexible practices and to training opportunities. All these practices will pay of only if there is strong organisational culture. This is argued that these practices form a synergetic bundle which helps the organization to enjoy success.

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A research was conducted by john Purcell, this study was basically to check the link between hr practices and people management and how hr practices impact on performance. This research was carried on 12 organizations in different sectors of the industry. The research was done by interviewing front line employees and line managers, at the initial stage most of the companies had a “big idea” which the company is trying to achieve. Most of the companies which had an big idea, it was not just a mission statement but it was the values which was spread throughout the organization so that they are embedded in their policies and practices, so these organization had strong practices to improve on the organizational performance. The research also said it’s important to have good front line managers who can implement the practices, it’s not enough to have good hr policies but there should be someone that makes sure that these policies are followed. It is important that these practices are followed, so that the employees feel good and take that extra mile at work. We can say that if a company as good line managers who can implement these practices in a right way so to bring the best in the workers, so that they can help on improvising on the overall perspective of the organization.

On the contradictory these practices will show good results only if they are followed together,

Various authors have found out the drawbacks of these practices, (wood and de menezes 1998:487) note that most of the studies indicate the lack of consistency, reporting fragmentation, a “pick and mix” approach of human resource they even found out short termism packages of HRM, rather than deploying integrated, consistent and long term packages of HRM.

(Truss et al) say that they hardly found out evidence of any deliberate or realized coherence

Between hr practices, in their research one of the Hr officer said the company would recruit one employee and sack another from another department, then where is the practice called employment security. (pfeffer) says that most of the smart companies often “do dumb things”, failing to learn from examples. They say that there is support for the notion that HR practices do operate more effectively when combined together. They also say that the precise number and mix of these is more open to debate, for example extensive training is an essential requirement for self managed teams to run effectively, higher than average rewards are more to impact on the numbers of applications for the job and to the consistency of selective hiring practices. The provision of financial and performance information to all employee is likely to be part of a wider harmonisation package. Any employer is willing to show more employment security if there is effective selective process; self managed teams are more extensive though the organization and compensation is based on performance. (Huselid1995, Dyer and reeves1995) say that marginal changes on practices have little or no effect on productivity.

Employers may make employee security a guarantee, condition only on an agreement that pay can be substantially adjusted in order to maintain employment in lean times. Few employees are offered security but with a price that they have to flexible, to move jobs and locations to maintain employment, they should be flexible to undertake retraining and to adjust in working hours.

(Pfeffer) also said “eliminating layers of management by instituting teams saves money”.

He says that self managed staff can also take on tasks, which was done by specialized personal, by doing this company can reduce the numbers of levels in the hierarchy and thus making senior managers more visible and more accessible.

Some of the key methodological issues faced by the researchers was that there was inconsistencies between the studies, where one research ignored one factor and including the other, practice like employment security by pfeffer was not included in the list of Delaney and Huselid 1996, Youndt 1996, Patterson et al 1997, wood and de Menezes 1998. Some authors include some measure of employee voice rather than achieved by employee involvement.

Pfeffer says, he is uncertain why researchers have included or excluded certain HR practices. He says the list can be developed on the basis of the other researchers have used or by constructing groups of practices on the basis of factor analysis. (Huselid 1995 645-647) identified two groups of practices namely ’employee skills’ and organisational structures’ they include job design, enhanced selectivity, formal training, various forms of participation and profit sharing.

(Patterson et al, 1997) also emerged with two groups of practices ‘job design’ and ‘acquisition and development of employee skills’. Guest says that there must be strong empirical base and a clear theoretical specification of hr practices that have to be included. Pfeffer says that the closer the organization gets towards the best practices the better, the better the performance. Guest points out that there may be room for variations between organization and practices which they follow in specific to external and internal circumstances.

Conclusion

The main focus of this study was check that can organization performance can be improved by following a set of Hr practices. The study led to suggestions that there is one way in which HRM should be delivered , moreover that these practices have an positive impact on the organization. This remains an idea that a bundle if hr practices and policies is capable of making major contribution towards organization success in all work places. On the contradictory side, weather this set of practices will suitable or which make a difference to lower line performance organizations.