Employee involvement is often identified as a key contributor to high performance work systems. Explain why employee involvement is so important. Use theory and examples to support your answer.
Companies nowadays need to turn to various methods in shaping their competitive strategy in order to stay competitive and achieve bottom line. The focus on best allocation of human, technological and material resources is critical to organisational performance. Theorists often consider people factor as the key resource ensuring success of an organisation. In fact, people constitute and create organisations, being their foundations and accelerators of change. Hence, attention to wise management of human capital is essential in order to trigger off its entire potential. High performance work systems (hereinafter referred to as HPWS) are an example of such agile management system, which by many is considered to be medium of achieving competitive edge and wining both customers and employees (Owusu 1999). HPWS is a collection of HRM practices that has revolutionised workplaces. HPWS is “a set of work innovations that include autonomous work teams, socio-technical systems, open systems planning, new plant designs, and other similar innovations” (Farias & Varma 1998, p.50). Considerable number of recent studies has supported the idea that HPWS improve organisational performance and that employee involvement (EI) is its critical constituent. This essay discusses employee involvement and its forms within the frames of HPWS, as one of its main practices. Further, it demonstrates the attributes and importance of EI, basing on the theory and relevant examples. Finally, the essay emphasises EI as being a seminal constituent of high performance work systems; however, it implies that it is not the sole element ensuring better corporate performance and a holistic view should be adopted in the management’s approach.
Approaches towards human capital have been evolving over decades and such efforts of theoreticians and researchers as the Hawthorne studies (1924-1932), McGregor’s Theory Y perspective (1960), or Maslow’s “Hierarchy of needs” (1954) demonstrate that the human relations element is essential in management’s approach and good communication, fairness and participation in decision-making have a positive effect on performance. By the same token, employee involvement “was borne out of a fundamental belief in the benefits of creating positive human relations within the organisation” (Ang 2002, p.199). The paradigm of HPWS is founded on the supposition that the given bundles of HR practices positively stimulate employees, reduce dysfunctional behaviour, such as absenteeism or resistance to change, in the same time increase productivity, and improve quality and customer service. The study of 76 Japanese companies by Takeuchi et al. (2009) confirms that HPWS exert considerable impact on employees’ and organisational performance. This view is consolidated by Gephart (1995), who claims that HPWS, when properly applied, lead to sustained competitive advantage. Farias and Varma (1998) emphasise that HPWS internal design characteristics, i.e. organisation structure, decision making, rewards, tasks and information systems, should fit with each other and should be tailored to the organization’s external environment. They argue that in order to achieve this “fit”, HPWS should be guided by the specific set of principles, with the two most important being empowerment and EI. The view that EI is a critical element of HPWS is supported by J. Pfeffer, who proposes seven practices ensuring success to an organisation, where EI, information sharing and employee voice are among others the key constituents of HPWS (1998, pp.64-98). Hsi-An et al. (2006) outline EI and information sharing as key elements of the core HR practices that should be central to the job infrastructure in any work place. EI is not an objective in itself, but a mechanism applied by...
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