Can the HPWS-practices help Small and Medium-Sized Enterprises and Start-Up Companies with Their Organizational Design?

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Can the HPWS-practices help Small and Medium-Sized Enterprises and Start-Up Companies with Their Organizational Design?

HPWS Appraisal Blog

The High Performance Work System is one of the approaches to job design within organizations. The others that might be as popular as this method are job rotation, job enlargement, job enrichment and self-managing teams. Some of these systems aimed at the skills’ development and don’t account such essential aspects of HR management as motivation and performance evaluation, remuneration and rewards, etc. (Armstrong, 2006, p.332).

The HPWS is a contemporary employee-management model that includes all of those aspects which made it the most popular within organizations concerned about raising their productivity. There are many definitions of what the high performance work system is but the most common one is given by Appelbaum et al. (2000, cited in Armstrong, 2011, p.155) and describes HPWS as a combination of HR practices that help organization keep employees’ involvement in the production as high as possible, assist their skill development and maintain motivation in order to maximize overall company’s performance.

The components of the system vary not only in the opinion of the researchers, but from organization to organization, and would depend on and can be adjusted to the company’s needs (Armstrong, 2011, p.157). The most common elements can be classified as high involvement practices (include self-directed teams, access to company’s information, etc.), human resource practices (advanced recruitment systems, performance evaluation, etc.), and reward and commitment practices (financial reward system, job rotation, flexible working hours, etc.) (Sung, Ashton, 2005:8, cited in Armstrong, 2011, p.157).

Appelbaum et al. (2000) proposed an employee-centred approach to the description of HPWS and argued that the elements required to build the HPWS can be grouped into three bundles (AMO model), where A (ability) relates to employees’ ability to learn new skills and acquire new knowledge, M (motivation) describes employees’ motivation strenghtening practices including high pay, career development and information exchange within a company, and O (opportunity) – the level, where the company’s workers can demonstrate their desire and ability to be involved in the team work and company’s development (Kroon et al., 2012).

Each of this bundles has different goals, which instigates Toh et al. (2008, cited in Kroon et al., 2012) to assume that there might be organizations where one of the groups – Ability, Motivation or Opportunity – will be dominating. The most challenging part of introducing the high performance work system, according to Buchanan (1987, cited in Armstrong, 2006, p.334) is to change the management style of the leaders of the organization from autocratic to supportive.

Some other steps include setting up the goals and building up the systems that would define how success will be measured, changing the production system and supply management processes to make sure that there will be fewer problems for self-managing teams during the production cycles, implementing good communication programs within the company, etc. (Armstrong, 2006; Boxall, Macky, 2007).

The HPW approach is usually considered in relation to the large businesses, however, I think there might be interest in these practices from the side of the small and medium size of business. The first several steps of high performance work design (Armstrong, 2011, p.334) makes me think of the start-up companies/projects.

Due to the limited resources and difficulties to hire a large number of specialists responsible for only a part of the production line, it is crucial for the people working for the SMEs as well as start-ups to be able to perform several roles. It is not unique for the owner-entrepreneur to carry the responsibilities of HR executive, or for an office manager to administrate the bookkeeping. The same might be said about the equipment.

What for a big company may be a part of their race to obtain the market dominance, for a small business or a new company might become a question of survival. There is not enough data on the influence of implementing of HPWS in SMEs or start-ups, but the initial research shows that high performance work system may improve the production results regardless company’s size or industry (Purcell, 1999, cited in Bendickson et al., 2017). It is hard to argue that the advanced selection process, improved in-company communications and fair but motivational compensation system wouldn’t lead to rising profits of the company of any size.   

References: 

Armstrong, M. (2006) A handbook of human resource management practice. London: Kogan Page. ‘Organization design’ (pp. 319-326).

Armstrong, M. (2006) A handbook of human resource management practice. London: Kogan Page. ‘Job design and role development’ (pp. 327-336).

Armstrong, M. (2011) Armstrong’s handbook of strategic human resource management. London: Kogan Page. ‘High performance strategy’ (pp. 155-163).

Bendickson, J., Muldoon, J., Ligouri, E., Midgett, Ch. (2017) ‘High performance work systems: a necessity for startups’ Journal of Small Business Strategy, 2017, 27(2):1-12.

Boxall, P., Macky, K. (2007) ‘High performance work systems andorganizational preformance: bridging theoryand practice’ Asia Pacific Journal of Human Resources, 45 (3), pp. 261-270

Kroon, B., Van De Voorde, K., Timmers, J. (2012) ‘High performance work practices in small firms: a resource-poverty and strategic decision-making perspective’ Small Business Economics 41(1):71-91; Springer, 2013.

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