Responding to the Challenges of Global Markets: Energising your Enterprise

1. Responding to the Challenges of Global Markets: Energising your Enterprise Professor David N Ashton david.ashton8@gmail.com

2. Outline • How successful firms have responded to global competition • How new management practices have been implemented • Lessons – using skills as a source of competitive advantage

3. Responding to global competition Successful companies identified in our own research: • Compete on quality and cost • Seek out niche markets, often but not always using knowledge intensive forms of production • Use modern management (HPW) practices to utilise employee skills as a source of competitive advantage

4. What are these High Performance Working Practices? • “An approach to managing organizations that aims to stimulate more effective employee involvement and commitment to achieve high levels of performance” UKCES 2009 • Discretionary effort and mutual gains

5. Typical working practices • appraisals • teamworking (especially self-managed teams) • multi-skilling • employee problem solving • employee development • Total Quality Management, Continuous Improvement • dissemination of business knowledge (financial information) • employee involvement • performance related pay Used in bundles

6. What do the practices deliver? Evidence • Improved economic performance • Unique competitive advantage • Innovation • Higher productivity • Better quality of working life • Personal career development • Higher level of job satisfaction • Sense of personal achievement • Higher level of skill utilisation

7. How do employee skills create a competitive advantage • W L Gore – product innovation • Glenmorangie – achieving premium quality and higher productivity • Speedbird Hotel – customised service

8. What is the source of evidence? • 20 years academic research • Different methodologies • Different countries Criticisms of HPW

9. How do they differ from traditional forms of organisation? Common values, trust and mutual Gains Contrast with command and control

10. Where did these practices come from? • USA • Japan • Multinational companies • Employer concern to create decent work • Combining lessons learnt from business fads

11. Why is not everyone doing it? • Can be difficult to implement • Requires long term commitment to build trust • Some failures • Not appropriate for some businesses in low cost, labour-intensive production

12. How have companies done it?

13. Building commitment to common values • Employees buy into purpose and values • Accept personal responsibility for achieving them

14. Building commitment to common values How was this done? DataC – co-ownership, socialisation of new staff, use of role models, rewarding through promotion; social bonding, celebration of achievements. Gore – co-ownership, use projects to encourage leadership, pay. St Luke’s – co-ownership, celebration of achievements, support for failure. NHS Hospital Trust – personality tests and common activities, involvement of all groups in project teams, eradicate blame culture

15. Building Trust Trust • Allowing employees to act without recourse to superiors • Accepting mistakes without blame • Welcoming constructive criticism • Sharing information

16. How has this been done? Thorn – open books to unions, transparency in negotiations with unions. DataC – sharing business information, regular meetings on business performance, no blame culture, fairness in pay. W L Gore – no managers, 4 principles for work organisation: fairness, freedom to grow, ability to make commitments, consultation.

17. Rewards and motivation Monetary Share ownership schemes, profit sharing, group bonus, individual performance related pay, promotion. Non-monetary Personal acknowledgement through everyday action, appraisals, prizes, celebrations of achievements.

18. Work design Organising work to maximise use of individual discretion and team co-operation. • Competences: internally designed based on existing experiences. • Devolved authority to teams: self-managed work teams; project teams. • Employee involvement: maximise use of employees’ skills in contributing to collective goals; TQM, Continuous Improvement.

19. Support for staff Measures to raise awareness of role of organisation: meetings, IiP, written documents, appraisals Opportunities for staff to exercise skills: move staff beyond comfort zone, OJT , Job rotation. Guidance for staff: teaching a formal responsibility of line managers/team leaders, PDPs, All structured around competences.

20. Aligning practices • Align rewards with performance • Ensure that work is organised to maximise staff contribution to goals and values, job design • Ensure support mechanisms in place for skill development of staff • Continuous review of practices

21. Alignment differs across sectors Difference in practices used across sectors • Hotels: semi-autonomous teams, multi-skilling, appraisals, customer service training, sharing business information, group bonus • Manufacturing: self-managed teams, cellular working, intensive technical training, appraisals, group bonus. • Hospitals: project teams, on-the-job management training, sharing management information

22. Lessons

23. References • Ashton, D. and Sung, J. (2002) Supporting learning for High Performance Working, Geneva: ILO • Hughes, J. (2008) ‘The high performance work paradigm: A review and evaluation’ Learning as Work Research paper No. 16. March, Cardiff School of Social Sciences, Cardiff University • UKCES (2009) High Performance Working: A synthesis of key literature, Evidence Report 4 August, London: UKCES • Sung, J. and Ashton, D. (2005) High Performance Work Practices: linking strategy and skills to performance, London: Department of Trade and Industry and CIPD.