Towards a multilevel model of the high performance work systems–workplace safety relationship

Human Resource (HR) systems and practices generally referred to as High Performance Work Practices (HPWPs), (Huselid, 1995) (sometimes termed High Commitment Work Practices or High Involvement Work Practices) have attracted much research attention in past decades. Although many conceptualizations of the construct have been proposed, there is general agreement that HPWPs encompass a bundle or set of HR practices including sophisticated staffing, intensive training and development, incentive-based compensation, performance management, initiatives aimed at increasing employee participation and involvement, job safety and security, and work design (e.g. Pfeffer, 1998). It is argued that these practices either directly and indirectly influence the extent to which employees’ knowledge, skills, abilities, and other characteristics are utilized in the organization. Research spanning nearly 20 years has provided considerable empirical evidence for relationships between HPWPs and various measures of performance including increased productivity, improved customer service, and reduced turnover (e.g. Guthrie, 2001; Belt & Giles, 2009). With the exception of a few papers (e.g., Laursen &Foss, 2003), this literature appears to lack focus on how HPWPs influence or foster more innovative-related attitudes and behaviours, extra role behaviors, and performance. This situation exists despite the vast evidence demonstrating the importance of innovation, proactivity, and creativity in its various forms to individual, group, and organizational performance outcomes. Several pertinent issues arise when considering HPWPs and their relationship to innovation and performance outcomes. At a broad level is the issue of which HPWPs are related to which innovation-related variables. Another issue not well identified in research relates to employees’ perceptions of HPWPs: does an employee actually perceive the HPWP –outcomes relationship? No matter how well HPWPs are designed, if they are not perceived and experienced by employees to be effective or worthwhile then their likely success in achieving positive outcomes is limited. At another level, research needs to consider the mechanisms through which HPWPs influence –innovation and performance. The research question here relates to what possible mediating variables are important to the success or failure of HPWPs in impacting innovative behaviours and attitudes and what are the potential process considerations? These questions call for theory refinement and the development of more comprehensive models of the HPWP-innovation/performance relationship that include intermediate linkages and boundary conditions (Ferris, Hochwarter, Buckley, Harrell-Cook, & Frink, 1999). While there are many calls for this type of research to be made a high priority, to date, researchers have made few inroads into answering these questions. This symposium brings together researchers from Australia, Europe, Asia and Africa to examine these various questions relating to the HPWP-innovation-performance relationship. Each paper discusses a HPWP and potential variables that can facilitate or hinder the effects of these practices on innovation- and performance- related outcomes. The first paper by Johnston and Becker explores the HPWPs in relation to work design in a disaster response organization that shifts quickly from business as usual to rapid response. The researchers examine how the enactment of the organizational response is devolved to groups and individuals. Moreover, they assess motivational characteristics that exist in dual work designs (normal operations and periods of disaster activation) and the implications for innovation. The second paper by Jørgensen reports the results of an investigation into training and development practices and innovative work behaviors (IWBs) in Danish organizations. Research on how to design and implement training and development initiatives to support IWBs and innovation in general is surprisingly scant and often vague. This research investigates the mechanisms by which training and development initiatives influence employee behaviors associated with innovation, and provides insights into how training and development can be used effectively by firms to attract and retain valuable human capital in knowledge-intensive firms. The next two papers in this symposium consider the role of employee perceptions of HPWPs and their relationships to innovation-related variables and performance. First, Bish and Newton examine perceptions of the characteristics and awareness of occupational health and safety (OHS) practices and their relationship to individual level adaptability and proactivity in an Australian public service organization. The authors explore the role of perceived supportive and visionary leadership and its impact on the OHS policy-adaptability/proactivity relationship. The study highlights the positive main effects of awareness and characteristics of OHS polices, and supportive and visionary leadership on individual adaptability and proactivity. It also highlights the important moderating effects of leadership in the OHS policy-adaptability/proactivity relationship. Okhawere and Davis present a conceptual model developed for a Nigerian study in the safety-critical oil and gas industry that takes a multi-level approach to the HPWP-safety relationship. Adopting a social exchange perspective, they propose that at the organizational level, organizational climate for safety mediates the relationship between enacted HPWS’s and organizational safety performance (prescribed and extra role performance). At the individual level, the experience of HPWP impacts on individual behaviors and attitudes in organizations, here operationalized as safety knowledge, skills and motivation, and these influence individual safety performance. However these latter relationships are moderated by organizational climate for safety. A positive organizational climate for safety strengthens the relationship between individual safety behaviors and attitudes and individual-level safety performance, therefore suggesting a cross-level boundary condition. The model includes both safety performance (behaviors) and organizational level safety outcomes, operationalized as accidents, injuries, and fatalities. The final paper of this symposium by Zhang and Liu explores leader development and relationship between transformational leadership and employee creativity and innovation in China. The authors further develop a model that incorporates the effects of extrinsic motivation (pay for performance: PFP) and employee collectivism in the leader-employee creativity relationship. The papers’ contributions include the incorporation of a PFP effect on creativity as moderator, rather than predictor in most studies; the exploration of the PFP effect from both fairness and strength perspectives; the advancement of knowledge on the impact of collectivism on the leader- employee creativity link. Last, this is the first study to examine three-way interactional effects among leader-member exchange (LMX), PFP and collectivism, thus, enriches our understanding of promoting employee creativity. In conclusion, this symposium draws upon the findings of four empirical studies and one conceptual study to provide an insight into understanding how different variables facilitate or potentially hinder the influence various HPWPs on innovation and performance. We will propose a number of questions for further consideration and discussion. The symposium will address the Conference Theme of ‘Capitalism in Question' by highlighting how HPWPs can promote financial health and performance of organizations while maintaining a high level of regard and respect for employees and organizational stakeholders. Furthermore, the focus on different countries and cultures explores the overall research question in relation to different modes or stages of development of capitalism.

How can HRM promote organizational innovation

Our work investigating managerial practices in UK manufacturing organisations has shown that people management practices play an important role in promoting innovation. Having developed an instrument to analyse innovation (defined by West and Farr in 1990 as “the intentional introduction and application in a job, work team or organisation of ideas, processes, products or procedures which are new, and designed to benefit the job, the work team or the organisation”), we were able to give each of the 30 organisations in our sample a score of between one and seven to capture innovation in a range of domains. This instrument took into account the magnitude of the innovation in terms of the number of people involved in its implementation, and how new and different it was. We found that much innovation involves relatively minor, ongoing improvements, rather than major change. To achieve sustained innovation, organisations must be able to draw upon the skills and knowledge of employees at all levels of the business. So which HRM practices are most likely to promote a positive learning environment? We developed a scale to take into account three facets of HRM that shape the learning environment and predict the extent to which individuals can gain the skills to promote innovation. First, organisations should have a vision statement capturing their approach to learning and development and communicating to staff the importance that they attach to these processes. Second, they must implement and endorse mentoring schemes. Last, they should consider offering staff the opportunity to have regular career development meetings. Where a positive learning climate exists, organisations tend to be more innovative. The results also show that organisations that make explicit the link between appraisal and remuneration perform relatively less well in innovation terms than those whose appraisal systems have no relationship with pay. Many have argued (for example, Lawler,1995) that pay-for-performance schemes provide a “line of sight” between performance and reward, thereby enabling individuals to make appropriate decisions about where best to direct the effort. Our findings do not imply that performance-related pay is ill advised in all circumstances, but we suggest that organisations should exercise caution before introducing such schemes. People are central to innovation, and this study suggests that high innovation can be achieved when people are empowered to make changes at local levels. HRM has an important, perhaps crucial, role to play in creating an environment that enables people to develop the skills and confidence necessary to affect change. Key points: Organisational innovation is an important determinant of competitive performance and advancement, enabling organisations to anticipate and respond to the challenges of globalisation. HRM has an important, perhaps crucial, role to play in promoting organisational innovation – to the extent that it creates a positive environment for learning and removes barriers that may inhibit creative performance (for example, linking appraisal to remuneration).

Linking performance-related pay to a Business School's mission and objectives

This paper first analyses the Performance Related Pay (PRP) schemes developed from 1992/3 to 2002/3 in a large Business School in England and then the School’s mission and strategic objectives in that period. The PRP schemes changed to include more specific performance indicators and these were increasingly linked to the objectives. The School’s resources allocated to PRP increased from £44,000 in 1992/93 to £355,000 in 2002/3 and from 1.08% in 1995/96 to 2.37% of the School’s income in 2002/3. As well as examining the changing strategic objectives and PRP schemes, the paper charts the development of the School’s reputation and resources and the role which staff motivation via PRP played at different stages. The paper concludes that the PRP scheme was at its most effective when it was clearly linked with the School’s strategic objectives, but that the relationship between objectives and motivation may be more complex than apparent from this study. Although the PRP scheme under consideration also applies to academic related staff, this paper concentrates on the effect on academic staff.

Executive pay, tournaments and corporate performance in UK firms

Recent initiatives for modernising local government have ignored the potential contribution of parish and town councils. This article critically examines English parish and town councils in the context of the current debate about the need for government to be more responsive to community needs. It considers measures to enhance the capacity of these grassroots councils by recalibrating the responsibilities and resources between tiers of local government. It concludes by setting out possible reforms to facilitate the contribution of these local councils to the modernising agenda as both representatives of the community and potential providers of local services.

Measurement of hospital performance

The rationale for carrying out this research was to address the clear lack of knowledge surrounding the measurement of public hospital performance in Ireland. The objectives of this research were to develop a comprehensive model for measuring hospital performance and using this model to measure the performance of public acute hospitals in Ireland in 2007. Having assessed the advantages and disadvantages of various measurement models the Data Envelopment Analysis (DEA) model was chosen for this research. DEA was initiated by Charnes, Cooper and Rhodes in 1978 and further developed by Fare et al. (1983) and Banker et al. (1984). The method used to choose relevant inputs and outputs to be included in the model followed that adopted by Casu et al. (2005) which included the use of focus groups. The main conclusions of the research are threefold. Firstly, it is clear that each stakeholder group has differing opinions on what constitutes good performance. It is therefore imperative that any performance measurement model would be designed within parameters that are clearly understood by any intended audience. Secondly, there is a lack of publicly available qualitative information in Ireland that inhibits detailed analysis of hospital performance. Thirdly, based on available qualitative and quantitative data the results indicated a high level of efficiency among the public acute hospitals in Ireland in their staffing and non pay costs, averaging 98.5%. As DEA scores are sensitive to the number of input and output variables as well as the size of the sample it should be borne in mind that a high level of efficiency could be as a result of using DEA with too many variables compared to the number of hospitals. No hospital was deemed to be scale efficient in any of the models even though the average scale efficiency for all of the hospitals was relatively high at 90.3%. Arising from this research the main recommendations would be that information on medical outcomes, survival rates and patient satisfaction should be made publicly available in Ireland; that despite a high average efficiency level that many individual hospitals need to focus on improving their technical and scale efficiencies, and that performance measurement models should be developed that would include more qualitative data.

Executive remuneration, financial performance and corporate governance in UK and Spanish listed firms

This study examines the relationship between executive directors’ remuneration and the financial performance and corporate governance arrangements of the UK and Spanish listed firms. These countries’ corporate governance framework has been shaped by differences in legal origin, culture and backgrounds. For example, the UK legal arrangements can be defined as to be constituted in common-law, whereas for Spanish firms, the legal arrangement is based on civil law. We estimate both static and dynamic regression models to test our hypotheses and we estimate our regression using Ordinary Least Squares (OLS) and the Generalised Method of Moments (GMM). Estimated results for both countries show that directors’ remuneration levels are positively related with measures of firm value and financial performance. This means that remuneration levels do not lead to a point whereby firm value is reduced due to excessive remuneration. These results hold for our long-run estimates. That is, estimates based on panel cointegration and panel error correction. Measures of corporate governance also impacts on the level of executive pay. Our results have important implications for existing corporate governance arrangements and how the interests of stakeholders are protected. For example, long-run results suggest that directors’ remuneration adjusts in a way to capture variation in financial performance

Performance management systems:a global perspective

Performance management is the process by which organizations set goals, determine standards, assign and evaluate work, and distribute rewards. But when you operate across different countries and continents, performance management strategies cannot be one dimensional. HR managers need systems that can be applied to a range of cultural values. This important and timely text offers a truly global perspective on performance management practices. Split into two parts, it illustrates the key themes of rater motivation, rater-ratee relationships and merit pay, and outlines a model for a global appraisal process. This model is then screened through a range of countries, including Germany, Japan, USA, Turkey, China, India and Mexico. Using case studies and discussion questions, and written by local experts, this text outlines the tools needed to understand and ‘measure’ performance in a range of socio-economic and cultural contexts. It is essential reading for students and practitioners alike working in human resources, international business and international management.

Performance management in the United States and France:four case studies in the retail and airline industries

The profusion of performance measurement models suggested by Management Accounting literature in the 1990’s is one illustration of the substantial changes in Management Accounting teaching materials since the publication of “Relevance Lost” in 1987. At the same time, in the general context of increasing competition and globalisation it is widely thought that national cultural differences are tending to disappear, meaning that management techniques used in large companies, including performance measurement and management instruments (PMS), tend to be the same, irrespective of the company nationality or location. North American management practice is traditionally described as a contractually based model, mainly focused on financial performance information and measures (FPMs), more shareholder-focused than French companies. Within France, literature historically defined performance as being broadly multidimensional, driven by the idea that there are no universal rules of management and that efficient management takes into account local culture and traditions. As opposed to their North American brethren, French companies are pressured more by the financial institutions that fund them rather than by capital markets. Therefore, they pay greater attention to the long-term because they are not subject to quarterly capital market objectives. Hence, management in France should rely more on long-term qualitative information, less financial, and more multidimensional data to assess performance than their North American counterparts. The objective of this research is to investigate whether large French and US companies’ practices have changed in the way the textbooks have changed with regards to performance measurement and management, or whether cultural differences are still driving differences in performance measurement and management between them. The research findings support the idea that large US and French companies share the same PMS features, influenced by ‘universal’ PM models.