High-Performance Organization

The contemporary flexible, high-performance organization model is a primary alternative to the classical bureaucratic model, popularly known as Taylorism. Several historical trends have contributed to the development of the high-performance model.

Beginning in the 1930s, increased attention was focused on the human impact of work, especially in assembly-line type settings. The Hawthorne Studies, and especially their popular interpretation by Elton Mayo, a vigorous crusader against the boredom of factory jobs, made the case for the importance of considering the human element in the workplace. The focus of industrial/organizational (I/O) psychology was broadened from industrial efficiency and productivity to include human relations and employee satisfaction as key variables. Through the 1960s and 1970s there was a major push for job enrichment. Somewhat earlier, researchers at the Tavistock Institute had laid the foundation for the sociotechnical systems approach to the design of work. With its use of open-system thinking and its emphasis on the multiskilled self-directed work team as the fundamental unit of work, the sociotechnical approach stood against Taylorism, and it captured in an embryonic way many of the essential elements that we now recognize as central to the high-performance organization model.

The Japanese revolution in manufacturing of the 1960s and 1970s dramatically highlighted another core weakness of the mechanistic model. Assembly-line workers who performed a narrow range of repetitive tasks typically did not know whether they were producing a quality product. When Japanese manufactured products suddenly came onto the world market, they were noted for their outstanding quality. Several quality techniques that are integral to the modern high-performance organization were popularized by the Japanese revolution: quality circles, statistical process control, total quality management, six sigma, just-in-time inventory management (Kanban), continuous improvement (Kaizen), and lean production, to name but a few.

The environment of business is marked by change. Huge environmental shifts—such as the growth of technology, the globalization of the economy, the changing demographics of the workforce, changing customer demands, increased competition, and the tightening regulatory environment—have pressed organizations to rethink their underlying assumptions, and their organizational structures and systems, to position themselves for success in the midst of such turbulence. The traditional bureaucratic organization model was not built for flexibility and does not fit a turbulent marketplace.

To achieve and sustain high levels of business performance and qualityofworklife (QWL) for employees in the highly competitive and rapidly changing marketplace, organizations have increasingly moved away from the bureaucratic structure of the past and embraced a series of practices, which collectively define the high-performance organization. The high-performance approach is intended to be comprehensive and superordinate; application of subcomponents (e.g., process reengineering, customer-supplier partnerships, work cells) in a piecemeal way is seen as a partial and incomplete solution to the complex problem of sustaining organizational excellence in a turbulent environment.

Although there does not appear to be a consensus on a single, comprehensive definition of the high-performance organization, the research and practice literature point to a set of common elements, many of which are visible in benchmark organizations:

  • Teams: Perhaps the most visible and pervasive marker of the high-performance model is the widespread application of the team concept. Production is commonly done by small semiautonomous teams, which set production schedules, manage quality for themselves, do equipment maintenance, and solve problems as they arise. Through open information sharing, teams understand the business sufficiently well that they do not need to call on a supervisor or other resources to address their daily issues. Such self-directed work teams are usually multiskilled, so individual jobs are enriched and teams can deploy their resources flexibly. Teams are also visible in nonproduction functions in the high-performance model as well—quality improvement teams, safety teams, new product development teams, procurement teams, and recognition teams, for example.
  • Titles and roles change: Multiskilled employees operating in a team concept are commonly called associates, technicians, team members, or some other term with a professional connotation befitting their expanded role. Also, although in the past the supervisory role may have been reasonably well captured in the old definition of planning, organizing, directing, and controlling work, in the high-performance organization managers operate more as business leaders than as work bosses. They set direction for their teams (which is in alignment with the overall vision and strategic direction of their plant or unit), and they coach and facilitate more than direct or closely manage the work of others. Their roles are defined as performance manager, team builder, business leader, and change manager. Common supervisory or management titles in the high-performance model are team manager, coach, or facilitator. The high-performance organization is also flatter than a traditionally structured organization, because of broadening individual job responsibilities at all levels and reduction in layers of management.
  • Employee involvement, participation, and empowerment: Employee input and involvement on a whole range of organizational issues, leading to more empowered workers who can run their business, is central to the model. In union settings, the use of joint team structures is common; so the union participates in a leadership partnership with management, for the benefit of the business and the employees.
  • Focus on the market and customers: In general the high-performance organization has an external focus, not just an internal focus. Workers at all levels are exposed to more real-market information than before. Employees are expected to think and act like they own the business. In some organizations teams literally run their own minibusiness.
  • Vision driven: The high-performance organization focuses on creating vision, mission, and values statements, and using those broad commitments to provide overall alignment and direction to the organization. Leadership works to ensure that internal activities are aligned with each other, and with the overall vision, mission, and strategy of the business, to minimize so-called non-value-added work.
  • Innovative human resources (HR) practices: Employees may be involved in the hiring process. Pay and incentive systems that reward teamwork and productivity—such as pay for knowledge and gainsharing—are often present. There is a height-ened focus on training, not only in technical skills, but also in team skills (communication, feedback, conflict management) and business administrative skills (safety management, productivity record keeping). Indeed, the contemporary term learning organization is commonly applied to the high-performance organization.
  • Innovative production practices. The high-performance organization is not a social experiment in job enrichment or the social aspects of sociotech-nical systems work design. Process improvement and linkage of work to customers’ needs are central to the high-performance organization. Contemporary production-improvement practices such as process reengineering, lean manufacturing, and six sigma are common.
  • Flexibility and adaptability. The model rests squarely on the assumption that the environment of business will continue to be turbulent and that success comes to organizations that are nimble, and can quickly and flexibly reconfigure themselves and redeploy their resources to take advantage of opportunities and avoid threats in the marketplace. Sooner or later, environmental conditions change to the point that no rigid structure will be adaptive.

The high-performance literature, spanning pop-management books to rigorous research studies, is enormous. A strong correlation between the adoption of the high-performance organization model and excellent business performance is widely reported. Anecdotally, organizations commonly claim dramatic improvements in both business performance measures (productivity, quality, cycle time) and measures of QWL (direct or indirect). Meaningful research points in the same direction, with many measures of business performance and QWL correlating significantly with the adoption of high-performance practices. Further, there is strong evidence that integrated comprehensive high-performance systems do in fact yield better results than elements implemented singly or in nonintegrated ways. Growth in the application of high-performance practices is forecast to continue.

References:

  1. Gephardt, M. A., & Van Buren, M. E. (1996). Building synergy: The power of high performance work systems. Training & Development, 50(10), 21-36.
  2. Holbeche, L. (2005). The high performance organization: Creating dynamic stability and sustainable success. New York: Elsevier.
  3. Kirkman, B. L., Lowe, K. B., & Young, D. P. (1999). High-performance work practices: Definitions, practices, and an annotated bibliography. Greensboro, NC: Center for Creative Leadership.
  4. Lawler, E. E., III, Mohrman, S. A., & Ledford, G. E., Jr. (1995). Creating high performance organizations: Practices and results of employee involvement and total quality management in Fortune 1000 companies. San Francisco: Jossey-Bass.
  5. Neusch, D. R., & Siebenaler, A. E. (1998). The high performance enterprise: Reinventing the people side of your business (2nd ed.). New York: Wiley.

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