High Performance Work Practices

Human capital is a vital resource for an organization to reach a sustainable competitive advantage in dynamic business environment.  Better management of human capital through retaining and motivating employees to a high performance improves organizational capacities in terms of profitability and productivity. High performance work practices (HPWPs) systems, which can be viewed as key factors that leads organizations to achieve a sustained competitive advantage, and ultimately result in a superior organizational performance (Lado & Wilson, 1994). Human resource management practices followed in the process of strategy making can effectively improve the organizational performance. These practices are refer as High Performance Work Practices.

There are five key HPWPs, which can effectively improve the organization performance.

Employee Training

The employee training is a strategy made by organizations in order to increase the knowledge, skills and ability of employees. This kind of investments build a strong relationship with the organizational performance, where employees feel more valued which leads to higher commitment and positive attitude toward organizations (Lowry , et al., 2002). This will improve the capacity of organizations in terms of attraction, retention and motivation of employees. 

Employee Empowerment

More the responsibilities delegated to employees, more motivated they are at work. More over involving the employees in the processes of decision-making will change their attitudes enhancing their knowledge, skills and abilities.

Performance Based Compensation

One of the best way to motivate employees to compensate for their performance. commissions, profit sharing and performance related bonus are very dominant practices to enhance the sense of belongingness. There is a strong relationship with organizations compensation and its performance. These practices will increase performance and organizational effectiveness. Organization must strategically assign these compensations, relaying on the role played by each employee and on the impacts of its performance outcomes.

Competence Based Performance Appraisal

Control on the performance through regular appraisals are very effective system to identify both the performance level of the employees as well as the necessity for training to fill the skill gap needed for the employees to perform. At the same time, performance appraisal helps to identify good performance, assign rewards, and motivate employees who accomplish expected performance.

 Merit Based promotions

Promotion of employees within the organization structure is an effective initiative to motivate employees to improve their performance. Employees are likely to be more motivated when they perceived that the promotion decision attributed to them on the results of their performance. Jointly, this process will increase the job commitment, where employees will feel more convinced to work in more productive ways, which will be positively reflect on the organizational effectiveness (Becker & Huselid, 1998).

The existence of HPWPs in organization lead to motivate its employees to be more committed, high commitment will influence positively on performance once employees feel that they are valuable. This allow organization to reach sustainable competitive advantage.

References

Becker , E. B. & Huselid, M. A., 1998. High Performance Work System and Firm Performance. Research in Personnel and Human Resource Management , Issue 16, pp. 53-101.

Lado, A. A. & Wilson, M. C., 1994. Human resource System and sustained comperirive advantage: A competency based percepective. Academy of Management review, 4(19), pp. 699-727.

Lowry , D. S., Simon, A. & Kimberley, N., 2002. Toward Improved Employment Relations Practices of Casual Employees. Human Resources Development , 1(13), pp. 53-70.