A rapidly changing economic environment, characterized by such phenomena as the globalization and deregulation of markets, changing customer and investor demands, and an increasing product-market competition, has become the norm for most organizations. To compete in this new environment, a continual performance improvement through reducing costs, innovating products and processes, and improving quality, productivity and speed to market is essential.1
Concerning these required quality improvements, in recent years, a new approach to management, particularly coming from the Anglophone countries like the United States, in which organizations compete on quality rather than cost, and rely on human resource development to do so, could be detected.
This new approach focuses on the involvement of employees in the decision making process and on using a certain combination or bundle of progressive management practices, which raise welfare to workers (for example training, appraisal, profit-sharing and high compensation systems).This approach has been conceptualised variously as “best practice” human resource management (HRM), “high performance work systems”, “high commitment” HRM or “high involvement” management. Whatever the terminology, the idea is that a particular set of HR practices has the potential to bring out improved organizational performance.
In the following, I will explain more in detail the list of high commitment HR practices outlined by Pfeffer (1998) and at the same time apply those practices on a real world situation. In order to provide a more realistic illustration of this new approach, I had the possibility to obtain information from and co-operate with the HR department of Oracle Austria, the Austrian subsidy of the American database software corporation, which pursues the strategy of adding value through appreciation (“Wertschöpfung durch Wertschätzung”) and thus, represents a typical example of what the theory calls a “high performance work system”.
Additionally, I will theoretically explain the connection between this new approach and the desired outcome, the improvement of the organization’s overall performance.
Table of Contents
- Introduction
- Components of "high performance” HR practices
- Employment Security and Internal Labour Markets
- Selective hiring and sophisticated selection
- Extensive training, learning and development
- Employee involvement, information sharing, worker invoice and open communication channels
- Self-managed teams / team-working
- High compensation contingent on performance
- Reduction of status differences / harmonisation
- Finding the best combination of HR Practices – a HR practice Bundle
- The Impact of High-commitment HR practices on performance
- Conclusion
Objectives and Key Themes
This case study examines high-commitment HRM practices within organizations, particularly focusing on their impact on organizational performance. The study aims to illustrate the theoretical concepts of high-commitment HRM through a real-world example, analyzing the specific HR practices employed by Oracle Austria and their connection to improved performance.
- High-commitment HRM practices and their components.
- The relationship between specific HR practices and organizational performance.
- The application of high-commitment HRM principles in a real-world setting (Oracle Austria).
- Analysis of the effectiveness of a "bundle" of HR practices.
- The role of employee involvement and empowerment in enhancing performance.
Chapter Summaries
Introduction: This chapter introduces the context of a rapidly changing economic environment demanding continual performance improvement. It highlights a shift towards a new management approach emphasizing employee involvement and a bundle of progressive HR practices to enhance organizational performance. The chapter sets the stage by defining high-commitment HRM and its core goals as described by Baron and Kreps (1999): aligning employee interests with organizational goals, fostering flexibility, and encouraging employees to use their judgment and contribute to improvement. The chapter also briefly introduces the case study of Oracle Austria and its alignment with high-performance work systems.
Components of "high performance” HR practices: This chapter details the various components of high-commitment HRM practices. It synthesizes findings from several studies (summarized in Table 1), highlighting common themes such as enhancing employee skills through selective staffing, comprehensive training, and job rotation. The chapter also emphasizes the importance of empowerment, participative problem-solving, teamwork, and group-based incentives. These practices are presented as building blocks of a system designed to improve overall organizational performance by fostering a highly skilled, engaged, and motivated workforce. The theoretical framework laid out in this section serves as the foundation for the subsequent analysis of Oracle Austria's practices.
Finding the best combination of HR Practices – a HR practice Bundle: This chapter delves into the concept of combining HR practices to create a synergistic effect. It builds upon the preceding chapter’s detailed examination of individual practices by exploring how their strategic integration leads to optimal organizational performance. The chapter likely argues that a holistic approach, rather than isolated initiatives, is essential for achieving the desired outcomes of high-commitment HRM. The chapter provides a theoretical basis for understanding the importance of creating a coherent system of mutually reinforcing HR practices. This section acts as a bridge, connecting the theoretical discussion to the practical case study of Oracle Austria in the subsequent chapters.
The Impact of High-commitment HR practices on performance: This chapter explores the causal link between the implementation of high-commitment HRM practices and the improvement of organizational performance. It moves beyond simply listing the practices to investigate how they contribute to concrete outcomes, such as increased productivity, improved quality, and enhanced innovation. The chapter analyzes the mechanisms by which the described HR practices translate into tangible benefits for the organization. This might involve discussing how factors like employee engagement, skill development, and enhanced collaboration directly impact key performance indicators. The chapter lays the groundwork for understanding the successful application of high-commitment HRM within the Oracle Austria case study.
Keywords
High-commitment HRM, high-performance work systems, employee involvement, organizational performance, HR practices, employee empowerment, training and development, selective hiring, teamwork, Oracle Austria, case study, best practices, performance improvement.
Frequently Asked Questions: A Comprehensive Language Preview of High-Commitment HRM Practices
What is the main topic of this document?
This document is a comprehensive language preview providing an overview of a case study examining high-commitment Human Resource Management (HRM) practices within organizations, specifically focusing on their impact on organizational performance. The case study uses Oracle Austria as a real-world example.
What are the key components of "high-performance" HR practices discussed?
The document details several components, including employment security and internal labor markets; selective hiring and sophisticated selection processes; extensive training, learning, and development opportunities; employee involvement, information sharing, and open communication; self-managed teams and teamwork; high compensation contingent on performance; and the reduction of status differences and harmonization within the organization.
What is the significance of a "bundle" of HR practices?
The document emphasizes that the strategic integration of various HR practices creates a synergistic effect, leading to optimal organizational performance. A holistic approach, rather than isolated initiatives, is crucial for achieving the desired outcomes of high-commitment HRM.
How does the document analyze the impact of high-commitment HR practices on performance?
The document explores the causal link between the implementation of high-commitment HRM practices and improved organizational performance. It analyzes how these practices contribute to concrete outcomes, such as increased productivity, improved quality, and enhanced innovation, by examining mechanisms like employee engagement, skill development, and enhanced collaboration.
What is the role of employee involvement and empowerment?
Employee involvement and empowerment are highlighted as crucial elements in enhancing performance. The document explores how these factors contribute to a highly skilled, engaged, and motivated workforce, ultimately improving organizational outcomes.
What real-world example is used in this case study?
The case study uses Oracle Austria to illustrate the application of high-commitment HRM principles in a real-world setting and to analyze the effectiveness of a "bundle" of HR practices.
What are the key objectives and themes of the study?
The study aims to illustrate the theoretical concepts of high-commitment HRM through a real-world example. Key themes include understanding the components of high-commitment HRM, the relationship between specific HR practices and organizational performance, the application of these principles at Oracle Austria, the analysis of a "bundle" of HR practices, and the role of employee involvement and empowerment.
What keywords are associated with this document?
Key terms include High-commitment HRM, high-performance work systems, employee involvement, organizational performance, HR practices, employee empowerment, training and development, selective hiring, teamwork, Oracle Austria, case study, best practices, and performance improvement.
What does the introduction cover?
The introduction sets the context, highlighting the need for continual performance improvement in a rapidly changing economic environment and the shift towards a new management approach emphasizing employee involvement and a bundle of progressive HR practices. It defines high-commitment HRM and its core goals.
What is covered in the chapter on the components of high-performance HR practices?
This chapter details the various components of high-commitment HRM, synthesizing findings from several studies. It emphasizes themes like enhancing employee skills through selective staffing, comprehensive training, job rotation, empowerment, participative problem-solving, teamwork, and group-based incentives.
What is discussed in the chapter on finding the best combination of HR practices?
This chapter explores the concept of combining HR practices synergistically for optimal organizational performance. It argues for a holistic approach, creating a coherent system of mutually reinforcing HR practices.
What does the chapter on the impact of high-commitment HR practices on performance cover?
This chapter investigates the causal link between high-commitment HRM practices and improved organizational performance, analyzing how these practices translate into tangible benefits like increased productivity, improved quality, and enhanced innovation.
- Quote paper
- Theresa Sturm (Author), 2007, High Commitment HRM organizations - a case study, Munich, GRIN Verlag, https://www.grin.com/document/85951
