What Makes High-Performance Organizations Tick?

Skley (cc)

What are high performance work systems, and why do they matter to human resource researchers and practitioners today? A new article in the Journal of Management takes a closer look:

High Performance Work Systems are designed to enhance organizational performance by improving employee capability, commitment, and productivity. Yet there is very little consensus about the structure of these systems and the practices therein. The lack of structure may be inhibiting the growth of knowledge in this field and the degree to which organizations adopt these systems.

Read “A High Performance Work Practices Taxonomy: Integrating the Literature and Directing Future Research” by Richard A. Posthuma of the University of Texas at El Paso, Michael C. Campion of the University of South Carolina, and Malika Masimova and Michael A. Campion, both of Purdue University, published in the Journal of Management.

To help further the dialogue on this important topic, SAGE is pleased to open access to key articles on high performance work systems through April 11:

“Enriched job design, high involvement management and organizational performance: The mediating roles of job satisfaction and well-being,” published in Human Relations by Stephen Wood of the University of Leicester, UK; Marc Van Veldhoven and Marcel Croon, both of Tilburg University, The Netherlands; and Lilian M de Menezes of Cass Business School, City University London, UK

“Employee responses to ‘high performance work system’ practices: an empirical test of the disciplined worker thesis,” published in Work, Employment & Society by Bill Harley and Leisa Sargent, both of the University of Melbourne, and Belinda Allen of Monash University

“High-Performance Work Systems and Job Control: Consequences for Anxiety, Role Overload, and Turnover Intentions,” published in the Journal of Management by Jaclyn M. Jensen of George Washington University, Pankaj C. Patel of Ball State University, and Jake G. Messersmith of the University of Nebraska-Kearney

“Entrepreneurial orientation and performance in young firms: The role of human resource management,” published in the International Small Business Journal by Jake G. Messersmith of the University of Nebraska at Kearney and William J. Wales of James Madison University

“Founding-Family Ownership and Firm Performance The Role of High-Performance Work Systems,” published in Family Business Review by Chiung-Wen Tsao of Tajen University and Shyh-Jer Chen, Chiou-Shiu Lin, and William Hyde of  National Sun Yat-Sen University

“Employment Modes, High-Performance Work Practices, and Organizational Performance in the Hospitality Industry,” published in Cornell Hospitality Quarterly by Tsai Cheng-Hua of National Cheng Kung University, Chen Shyh-Jer of National Sun Yat-Sen University, and Fang Shih-Chien of National Cheng Kung University

High-Performance Work Systems and Job Control

Jaclyn M. Jensen, George Washington University, Pankaj C. Patel, Ball State University, and Jake G. Messersmith, University of Nebraska-Kearney, published “High-Performance Work Systems and Job Control: Consequences for Anxiety, Role Overload, and Turnover Intentions,” which is now available in the Journal of Management‘s  OnlineFirst section. This article and three others were published on September 12, 2011 and can be found here, along with the rest of the OnlineFirst collection. 

The Abstract:

This study examines relationships among high-performance work systems (HPWS), job control, employee anxiety, role overload, and turnover intentions. Building on theory that challenges the rhetoric versus reality of HPWS, the authors explore a potential “dark side” of HPWS that suggests that HPWS, which are aimed at creating a competitive advantage for organizations, do so at the expense of workers, thus resulting in negative consequences for individual employees. However, the authors argue that these consequences may be tempered when HPWS are also implemented with a sufficient amount of job control, or discretion given to employees in determining how to implement job responsibilities. The authors draw on job demands–control theory and the stress literatures to hypothesize moderated-mediation relationships relating the interaction of HPWS utilization and job control to anxiety and role overload, with subsequent effects on turnover intentions. The authors examine these relationships in a multilevel sample of 1,592 government workers nested in 87 departments from the country of Wales. Results support their hypotheses, which highlight several negative consequences when HPWS are implemented with low levels of job control. They discuss their findings in light of the critique in the literature toward the utilization of HPWS in organizations and offer suggestions for future research directions.

More information about the Journal of Management can be found here.

A New Hope for Rank and Yank

 ”A New Hope for Rank and Yank“ was published by Jamie R. Mulligan, Illinois State University, and Rebecca A. Bull Schaefer, Gonzaga University, in the Journal of Leadership & Organizational Studies. Dr. Mulligan and Dr. Bull Schaefer kindly provided the following thoughts on their article.

Our Research Problem

Through the application of research and theory related to due process and justice, we sought to answer practitioner and research questions regarding the strategic usefulness of using forced distribution rating systems (FDRS). Our work was an extension of a recent simulation study in Personnel Psychology by Scullen, Bergby, and Aiman-Smith (2005), which raised questions about the long-term effectiveness of FDRS.

Specifically, we explored how an FDRS, affectionately called Rank and Yank, could be implemented not only to increase performance appraisal influence on long-term organizational performance, but also to reduce voluntary turnover intentions. The following four variations of FDRS were considered in our study:

1. Traditional/Strict Rank and Yank: The bottom 10% of employees in each department were terminated and replaced each year.

2. Temporary use of Strict Rank and Yank: A traditional/strict system was used for 3 years, with no systematic termination thereafter.

3. Probationary Rank and Yank: The first time that employees were ranked in the bottom 10% of their respective departments, they received warnings. However, if these employees were once again ranked in the bottom 10% of their departments at any future point, they were terminated and replaced.

4. We also consider a system with no systematic termination.

Who is the target audience for this article? What Inspired You To Be Interested In This Topic? How Does This Study Fit Into Your Body Of Work/Line Of Research?

This article was a balance between research and practice. Our motivation for writing this article was two-fold. First, both of us were familiar with the simulation study conducted by Scullen, Bergby, and Aiman-Smith (2005), and their results, which indicated that (at least in theory) a traditional/strict rank and yank FDRS can yield significant gains in the potential performance of an organization’s workforce. However, many organizations don’t follow a traditional/or strict rank and yank system in practice. They tend to implement modified versions of the traditional rank and yank system. We therefore sought to extend the original simulation study in a manner that would yield more practical insight.

We also took the first step at exploring some of the potential negative impact on morale that rank and yank systems pose, by investigating how modified rank and yank systems are likely to impact voluntary turnover rates, as established by existing literature on due process and justice theories.

The second motivation for writing this article was very utilitarian. Collaboratively, we had the background and skill-set necessary to complete a management simulation study. One of us had research experience in HR-related policies and how those reactions can translate into the home domain and/or into future career decisions, the other had experience in the design and analysis of simulation experiments.

Conclusions

Consistent with the findings of Scullen et al. (2005), we found that using an FDRS system with termination as a consequence has a powerful influence on an organization’s performance potential. We also found that probationary systems with lower associated voluntary turnover rates may offer organizations an effective alternative to strict rank and yank with higher associated voluntary turnover rates. These results favoring probationary periods are promising because it could be a way for organizations to realize some of the gains in performance that a traditional FDRS poses, while considering employee reactions.

Were there findings that were surprising to you? How do you see this study influencing future practice?

One finding that was surprising was that temporary use of a rank yank system does not provide sustainable, long-term yields in the potential performance of an organization’s workforce. More explicitly, once an organization ceases use of the rank and yank system, potential performance immediately begins to decline. This was particularly surprising because there are several indications that temporary use of a rank and yank system has been advised by management consultants. Due to such advice, organizations may be tempted to only use rank and yank approaches every now and again, but leaders should take notice to the results of only using rank and yank temporarily (for a few years) and administer caution when considering such a strategy. Although organizational performance increases quickly during those years, it begins regressing back towards base-line performance after dismissing a rank and yank system, and, therefore, the benefits achieved are eventually lost.

How do you see this study influencing future research?

Future research should explore who is likely to leave due to the use of a rank and yank system. If organizations are losing poorer performing employees, they may appreciate the higher voluntary turnover rate to further minimize the ‘deadwood’. An investigation into other predictors of voluntary turnover was beyond the scope of our study, and future research needs to examine if perceptions of justice trump other motivational forces with regard to employee turnover intentions.

Relative to other social studies, simulation studies are lacking in organization and management research, (Harrison, Lin, Carroll, and Carley, 2007). This article demonstrates that despite simplifying assumptions, simulation models can yield insights that help both researchers and practitioners better understand complex system dynamics.

What, if anything, would you do differently if you could go back and do this study again?

One advantage of a simulation study is that the model often ‘evolves’ with the researcher’s understanding of the process. Hence, we were able to investigate several preliminary models during the course of research before deciding on the final version of the model as presented in our paper.

References

R. Harrison, R., Lin, Z., Carroll, G. & Carley, K. (2007). Simulation modeling in organizational and management research. Academy of Management Review, 32(4), 1229-1245.

Scullen, S. E., Bergey, P. K., & Aiman-Smith, L. (2005). Forced distribution rating systems and the improvement of workforce potential: A baseline simulation. Personnel Psychology, 59, 1-32.

Structure-Specific Teamwork

“Evidence of Structure-Specific Teamwork Requirements and Implications for Team Design“, by Daniel Lafond and Marie-Eve Jobidon, both of Defence R&D Canada-Valcartier, Québec, Caroline Aubé of HEC Montréal, Québec, and Sébastien Tremblay of Laval University, Québec, was recently published in Small Group Research OnlineFirst. Dr. Lafond has provided an additional perspective on the article:

Who is the target audience for this article?

Researchers in cognitive, organizational and social psychology; Human factors specialists; Decision makers and personnel in the military, healthcare, emergency response, and public safety domains.

What inspired you to be interested in this topic?

The considerable potential for knowledge transfer from basic research to applied issues in relation to human performance.

Were there findings that were surprising to you?

The main findings challenged a predominant assumption that key determinants of team performance are the same across all contexts.

How do you see this study influencing future research and/or practice?

Contribute to the development of team design methods and stimulate further research on how team structures influence teamwork requirements.

How does this study fit into your body of work/line of research?

Human cognition and performance: From individuals to teams.

How did your paper change during the review process?

Significant improvements to the conceptual background, theoretical discussion and analyses.

What, if anything, would you do differently if you could go back and do this study again?

We would not change anything in particular, but we will certainly pursue the investigation of determinants of team performance and how these factors are modulated by context of work and organizational structure of teams (e.g., by studying a wider set of team structures).

Conflict in Nonprofit Boards

“It’s Not Conflict, It’s Differences in Opinion: An In-Depth Examination of Conflict in Nonprofit Boards“, by Shannon Kerwin of the University of Florida, Alison Doherty and Alanna Harman, both of the University of Western Ontario, London, Canada, was recently published in Small Group Research OnlineFirst. Shannon Kerwin has provided additional background to the article:

Who is the target audience for this article?

The target audience would be workgroups that may experience conflict and/or disagreement; more specifically non-profit boards of directors.

What inspired you to be interested in this topic?

Having worked in an organization with a board of directors – prior to my academic career – I saw both the benefits and pitfalls of unmanaged disagreement and conflict. I truly believe that conflict can be functional; however, it often gets “lost in the mix”.

Were there findings that were surprising to you?

The most surprising finding to us was the degree to which “intensity of conflict” played a role in the nature, development, and outcomes of each conflict type. The spectrum of intensity that was described by the participants was quite fascinating. We were also quite surprised by the participants’ reluctance to use the word “Conflict”. There is a definite stigma surrounding the term in this context.

How do you see this study influencing future research and/or practice?

We hope that future research will use our study to further emphasize that the original conceptualization of intragroup conflict needs to be adjusted; including intensity into the discussion may be a good first step. Further, we hope that non-profit boards can use this study to help reduce the stigma surrounding disagreement, and formulate ways to embrace productive discussion/disagreement; potentially leading to positive outcomes.

How does this study fit into your body of work/line of research?

We have previously published a study in the Journal of Sport Management that highlights the nature and impact of conflict in the non-profit setting. We are also in the process of investigating the triggering effect of substantive conflict to personal conflict, and the factors that may moderate that process. Finally, the findings of this SGR study have opened our eyes (and minds) to new factors that may contribute to the development of intense/less intense intragroup conflict. These studies are either in the conceptual or data collection phase. Our main areas of interest are organizational behavior and theory as it relates to sport management, and our particular focus has landed on unpacking the complexities of intragroup conflict.

How did your paper change during the review process?

The reviewers provided extremely valuable feedback that helped us focus the direction of our paper. With so much data coming out of a qualitative research study, the critical eye of the reviewer(s) was something that brought clarity and focus to the work. The ability to extract and discuss the implications of the continuum of intensity of each conflict type was based on the encouragement of both the reviewer and editor. As such, the review process enhanced the contribution that this paper may/can make to the academic and practical community.

What, if anything, would you do differently if you could go back and do this study again?

I will not speak for the other authors, but for me personally, I would have loved to have been able to get in touch with those individuals who chose not to participate. I think even a few comments on why they chose not to participate may have added a bit of richness to our data. Further to this, if access permitted, observing these participants in their board meetings may have helped to further categorize the nature, development, and impact of intensity of task, process, and relationship conflict.

 

Workplace Wellness

“Innovations in Workplace Wellness: Six New Tools to Enhance Programs and Maximize Employee Health and Productivity”, by George Thomas DeVries III of American Specialty Health, Inc. San Diego, California, was the most frequently read article in Compensation and Benefits Review in 2010. George has provided additional background to the article:

Skyrocketing health care costs are one of the most crucial issues facing businesses today. And with a largely sedentary and/or Baby Boomer-based workforce, it has never been more important for Human Resources and benefit managers to focus on prevention and wellness.

I wrote “Innovations in Workplace Wellness: Six New Tools to Enhance Programs and Maximize Employee Health and Productivity” on the eve of health care reform legislation, and I think business leaders in 2010 were—and still are perhaps—desperate to learn more about programs that can rein in those lost costs associated with sick or chronically ill workers. The article helps to summarize the kinds of health improvement services and trends (wireless activity trackers, more effective incentives, health coaching, and more)  that are currently out there to help businesses reach their goals by improving the health of their employees. And the  positive ROI these programs provide certainly doesn’t lie.

Our work at American Specialty Health forces us to examine the current business climate and the ways in which health improvement programs can fit into it in order to increase productivity, reduce absenteeism, and improve our country’s leadership on a global scale. But how will we maintain this position if we can’t control our health care costs, our productivity, our sick days? Better health shouldn’t just be an internal company goal—it is critical on a national scale. I think this idea is resonating with industry leaders more every day, and this, perhaps, is part of the reason for the article’s popularity.

 

Generational Differences in Work Values

“Generational Differences in Work Values: Leisure and Extrinsic Values Increasing, Social and Intrinsic Values Decreasing”, by Jean M. Twenge of San Diego State University, Stacy M. Campbell of Kennesaw State University, Brian J. Hoffman and Charles E. Lance, both of the University of Georgia, was one of the most frequently read articles in the Journal of Management in 2010. Here is a brief personal perspective from one of the authors, Jean M. Twenge:  

The large accounting firm Ernst & Young pays employees to volunteer. KPMG offers 5 weeks of paid time off a year for new hires. Google offers onsite massages.

American companies are spending millions, if not billions, adapting to the young generation of workers born after 1980 (known variously as Millennials, GenY, or GenMe), often calling on the many books and consulting firms purporting to describe generational differences.

 Yet few of these programs and observations are based on empirical research, and virtually none compare data over time, a necessary step to separate the effects of age and generation.

 A personality psychologist by training, I was very young myself – 22 – when I first began researching generational differences in 1994. That research showed significant increases in individualistic traits over time, leading me to write Generation Me (2006, Free Press). But I was often asked about the practical applications – how, for example, did these differences impact the workplace?

I was looking for items for another project when I stumbled across questions about work values in a large survey of young people that began in 1976. This over-time data meant we could hone in on generational differences without the confound of age or career stage.

We found that GenMe rated leisure and vacation time as significantly more important than Boomers and GenX’ers did at the same age. However, there were virtually no generational differences in altruistic values (such as wanting a job that is worthwhile to society). So the massages and paid time off are good incentives, but being paid to volunteer will be no more popular than it was 15 or 30 years ago. My co-authors and I hope that companies who are recruiting and managing young workers will find these evidence-based findings helpful in separating truth from fiction in the anecdote-dominated field of generational differences.

The scientific perspective is also useful for quantifying the differences. In brief, they are large enough to matter (often around a half a standard deviation across 30 years), but not so large that the generations can’t work together. So those who claim that there are no generational differences are wrong, but so are those who say that GenMe is starkly different in nearly every way. As so often happens, the truth lies somewhere in the middle.

Challenges for Institutional Theory

“Challenges for Institutional Theory”, by Roy Suddaby, University of Alberta, was the most frequently read article in the Journal of Management Inquiry in 2010. Roy has provided additional background:

The catalyst for this article was a conference on Institutional Theory sponsored by the Australian School of Business at the University of New South Wales in July of 2008 where I was asked to give the keynote address discussing the future of neo-institutionalism in management research. Neo-institutionalism (or institutional theory) is itself, a challenge to traditional economic explanations for firm behaviour in business research. However, it has grown to be incredibly popular and has largely eclipsed traditional economic explanations for firm behaviour, at least within the Organizations and Management Theory division of the Academy of Management.

 My essay, thus, offers a critique of what used to itself be a critique but has grown to become a dominant, if not somewhat hegemonic, perspective on firm behaviour. Because of its popularity, there has been a tendency for management researchers to try to recast their research in institutional terms. The danger of doing this, I argue, is twofold. First, there is a tendency to overlook more simplistic, economically rational explanations for firm behaviour. There is a principle in science – Occam’s razor – that suggests when we have two competing explanations for an event we ought to prefer the simpler and more direct explanation. My essay raises the possibility that management scholars have abandoned this principle, often choosing more tortuous and complicated explanations based in neo-institutionalism, when more obvious explanations exist. Second, as more and more firm behaviour becomes characterized by scholars as ‘institutional behaviour’ there is a danger of trivializing institutional theory. This occurs by treating any form of change, however marginal or inconsequential, as ‘institutional change’ or any act of entrepreneurship as ‘institutional entrepreneurship’. The focus of the theory, however, is to address issues of ‘profound’ change or acts of entrepreneurship that fundamentally redefine market and social transactions.

 The intent of the essay, thus, was to avoid the tendency of management scholarship to follow current fads and fashions and retain some degree of scepticism in our research. I suspect the essay resonated with management scholars and hopefully will accomplish my objective of trying to reign in the relatively flippant treatment of institutionalism while offering an attempted re-articulation of the core purpose of institutional theory and its research agenda. Institutional theory still has a very large and interesting domain of phenomena to explore – particularly now. There is a growing awareness amongst executives of publicly traded corporations that they now compete both in the material world for material resources (inputs, labour, capital) and in the social world for symbolic resources (reputation, legitimacy, status). This is perhaps most apparent in the growing debate over global sustainability and corporate social responsibility. Neo-institutionalism ought to be the theory of choice when trying to understand firm behaviour in this new and exciting context.

Organizational Effectiveness

“Effects of Positive Practices on Organizational Effectiveness“, by Kim Cameron, Margaret Calarco, both of the University of Michigan, Ann Arbor, and Carlos Mora, Trevor Leutscher, both of Determinant LLC, Ann Arbor, Michigan, was recently published in the Journal of Applied Behavior Science. Kim Cameron has provided some background about the article:

Who is the target audience for this article?

Organizational scholars, leaders, and change agents

What Inspired You To Be Interested In This Topic?

This has been a ten year journey to investigate the relationships between positive, virtuous practices and the performance of organizations. Up to now, little attention has been paid to these relationships, much fluff and hype has appeared in the popular press, and many of the terms have been considered non-scholarly and illegitimate for scientific investigation. The study helps us progress past these obstacles.

Were there findings that were surprising to you?

The findings were not surprising, just confirming.

How do you see this study influencing future research and/or practice?

The study helps provide a foundation for an area of inquiry that is beginning to develop, namely, positive organizational scholarship. It helps provide legitimacy for the entire field of investigation. For practitioners, it identifies some non-traditional, positively-oriented interventions that were found to affect organizational performance.

How does this study fit into your body of work/line of research?

This study is at the heart of my current research stream, and I will continue to engage in similar investigations in the future.

How did your paper change during the review process?

The reviewers were very insightful and helpful in their suggestions, as was the editor. The paper is clearer and more relevant as a result of their comments.

What, if anything, would you do differently if you could go back and do this study again?

This is the first step in a research trajectory, so this foundational study is needed before other more carefully controlled studies can be conducted. This is not a “final word” kind of study, but it opens the door for more empirical investigations in positive organizational scholarship.

Team Leadership

“Understanding the Motivational Contingencies of Team Leadership”, by D. Scott DeRue, University of Michigan, Ann Arbor, Christopher M. Barnes, U.S Military Academy at West Point, New York, and Frederick P. Morgeson, Michigan State University, East Lansing, was the most frequently read article in Small Group Research in 2010. D. Scott DeRue has provided a personal perspective on the article.

Team leaders can take a directive approach where they focus on setting the team’s direction, assigning goals, settings expectations, providing task-relevant instructions, setting timelines, and giving feedback when performance problems arise. Alternatively, team leaders can take a more coaching-oriented approach where they focus on helping team members learn to operate on their own without directly intervening in or managing the team’s work processes. Interestingly, prior research suggests that both of these team leadership approaches can be effective. Our study establishes the conditions under which each of these team leadership approaches is more or less effective.

We conducted this study because we were curious about why these divergent approaches to team leadership can be equally effective across different teams. Indeed, we learned that a directive approach was more successful when team members were confident in their abilities. Having observed many of these teams in action, it seemed to us that a directive approach to leadership was harnessing the energy that confident team members had and pointing that energy and effort in directions that led to higher team performance. At the same time, we also learned that coaching leaders can be even more effective than directive leaders, but only when those individuals are charismatic. We expect people are finding this article particularly interesting because it shows that divergent styles of team leadership are more or less effective depending on both leader and follower characteristics – a finding that really highlights the contingent nature of leadership in teams.