High performance workplaces: Background paper for the Third European Company Survey

Transcription

1 High performace workplaces: Backgroud paper for the Third Europea Compay Survey What is a orgaisatio? Orgaisatios ad the employmet relatioship What is a high performace work system? Is a high performace work system ecessary? Refereces Disclaimer: This documet has ot bee subject to the full Eurofoud editorial ad publicatio process. Wyattville Road, Loughlistow, Dubli 18, Irelad. - Tel: (+353 1) Fax: / [email protected] - website:

2

3 This paper is oe of two backgroud papers that served as a coceptual framework for the developmet of the questioaire for the Third Europea Compay Survey (ECS). The papers also formed the basis for the discussio with Eurofoud s tripartite Advisory Committee o the ECS ad the questioaire developmet group. The two papers cover the followig topics: High performace workplaces ad Social dialogue at workplace level. What is a orgaisatio? A orgaisatio as a structure of divisio of labour Doctors diagose ad cure patiets. But there is more to their job tha that. They also order products, carry out admiistratio, read ew research literature, check their istrumets ad so o. I other words, differet aspects related to their job are all doe by doctors themselves. We therefore describe them as self-employed ad ot a orgaisatio. I our idustrialised world, however, products ad services are mostly made ad delivered i large-scale settigs. There are orgaisatios with hudreds or eve thousads of people workig at the same time. Ievitably, the work to be doe has to be divided i some way ito work packages as everyoe caot do the same thig at the same time. We describe these work packages as workplaces. Ad the process by which the work to be doe i a orgaisatio is broke dow ito differet workplaces, we call divisio of labour. Withi this process of divisio of labour a lot of choices have to be made. This is ofte ot obvious to the employees or customers of a orgaisatio. Through a sequece of decisios, all the tasks to be doe are trasformed from a udifferetiated pool of tasks to a etwork of ofte strictly defied jobs. After a while these decisios acquire a almost fixed status which is hardly ever questioed. However, they remai the result of choices take more or less cosciously by maagemet. Other possible choices would have resulted i workplaces ad orgaisatios with differet characteristics. Oe such a basic choice is a divisio accordig to product or operatio. This choice ca be recogised i the structure of may orgaisatios. For example, furiture compay A has departmets Tables, Chairs ad Beches, while furiture compay B has departmets Wood processig, Assembly ad Garish. Or computer compay A has the departmets Europe, Uited States ad Asia while compay B has the departmets R&D, Productio ad Marketig. Such a choice has importat cosequeces for the quality of work. Furiture compay A may have groups resposible for the productio of tables, which could iclude resposibilities for work plaig. I compay B this is impossible as the productio groups are specialised i, for example, wood processig. As a result they have o overview over the whole process leadig to tables ad are uable to be ivolved i the overall work plaig. We therefore have workplaces with other tasks ad characteristics. Orgaisatioal performace is also affected by such choices. Furiture compay B will fid it difficult to respod flexibly to frequet chages i product demads. As products have a complex routig withi ad betwee specialised departmets, throughput time will be log. Compay A is better able to adapt to frequet chages as the departmet Tables is able to deal itself with chages i demad. The followig figure summarises this differece. Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

4 High performace workplaces: Backgroud paper for the Third Europea Compay Survey Impact of divisio of labour The same people i the same place i the same time with the same meas BUT with aother divisio of labour Gives other results i: quality of work orgaisatioal performace Impact of divisio of labour Orgaisatios have to cosider such choices carefully as these have a lastig character. Ideed, employees i a orgaisatio do ot all meet every morig aroud the coffee table i order to decide who will receive customers, operate machies, pay the bills, check the ivetory ad so o. Such choices i the orgaisatio are recurret. Over a loger period of time, chages of course have to be made, but from day to day these choices are fixed. Workplaces, as well as the way they relate to oe aother i the orgaisatio, are defied. We label this etwork of workplaces the structure of the divisio of labour. The term structure idicates that we are dealig with a persistet characteristic. Ad thaks to this, we are able to describe the structure i the divisio of labour i a objective way. This could for istace be doe by meas of a questioaire. But if we wat to do this mappig i a scietific way that ca be uderstood ad verified by others, we eed a coceptual model. Such a coceptual model provides us with a toolkit of cocepts that eables us to map the wide rage of choices that are made i ay orgaisatio with regard to the structure of the divisio of labour. Such a coceptual model for orgaisatios was elaborated by Va Hootegem (2000, p. 76) ad is sometimes referred to as the hamburger model (see p.5 below). The productio cocept forms the upper half of the hamburger ad the employmet relatioship forms the lower half. This coceptual model is based o moder sociotechical systems theory (De Sitter et al, 1994). I systems theory, ay system cosists of a etwork betwee odes. Such a etwork has a structure which determies the ature of the relatioships betwee the odes. The way i which odes operate ad thus the system as a whole is determied by the ature of their mutual relatioships. Similarly, orgaisatios ca be cosidered systems that trasform a iput ito a certai output aimed at certai goals. A orgaisatio s overarchig goal is its survival. Ad as its eviromet becomes more turbulet, a orgaisatio will seek to elarge its possibilities for choice ad self-directio. The extet to which the orgaisatio is able to reach these goals is determied by its structure of divisio of labour. The workplaces i a orgaisatio ca be cosidered as odes itercoected i a etwork of relatioships. How that etwork looks will be determied by its structure of divisio of labour. This structure will determie how all the workplaces ad thus the orgaisatio as a whole are able to operate ad maitai its presece. This systems approach stresses the structural coditios i which problems emerge or goals ca be reached. It also stresses the structural coditios for the goal maoeuvrability of orgaisatios: i other words, the orgaisatioal capacity to aim at ew goals if circumstaces chage. This capacity provides the orgaisatio with better chaces for survival, especially if the eviromet becomes turbulet. 2 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

5 High performace workplaces: Backgroud paper for the Third Europea Compay Survey The productio cocept Productio orgaisatio Like the desig of a buildig, the basic architecture of the orgaisatio has to be tackled first. This could be referred to as its departmetal structure. This collectio of decisios is called productio orgaisatio. First of all it deals with how the primary value-addig process to the orgaisatio is structured. How are these operatios grouped ad liked with regard to orders? Above we exemplified such a choice i our divisio of compaies accordig to product or operatio. But value-addig operatios are ot the oly activities that take place i a orgaisatio. These other activities also eed to be prepared ad supported. How are these activities grouped ad liked to the primary process? They could, for istace, be separated from the primary process ad grouped accordig to aspect. Each aspect is the take care of by separate staff departmets such as huma resource maagemet, logistics, maiteace ad quality. However, such activities ca also be itegrated i the primary process. All these activities also eed to be coordiated ad regulated. Agai, such regulatory activities ca be divided from the productive as well as supportive ad preparatory activities i the orgaisatio ad arraged for each aspect separately. Regulatio itself ca also be split whereby operatioal, tactical ad strategic regulatio is assiged to differet hierarchical levels. Aother choice would be to locate regulatory capacity as much as possible where the executio happes ad where regulatio is required. Productio techology A subsequet decisio is related to the applicatio of productio techology i the orgaisatio. Which activities ad to what extet will these be take over by mechaisatio ad iformatisatio? (The latter is the extet to which the orgaisatio is becomig iformatio-based.) Ideed, techology is ot a give thig to which people have to adapt, but is part of the decisio process the orgaisatio has to deal with. Havig made the decisios about productio techology, this ievitably leads to restrictios for those who have to work with the chose techology. Choices ca be made with regard to the fuctio, level ad ature of productio techology. Which fuctios i the orgaisatio will be automated? Activities withi the value-addig process are obvious cadidates, but automatio ca also be cosidered i its support, preparatio or eve regulatio. Subsequetly, the level of diffusio of the techology eeds to be cosidered. Ad fially the ature of the techology may severely restrict how employees ca perform their tasks. If the techology reduces its users to its mere extesio, employees are restricted i the way they work. But whe the techology ca be mastered by its users ad leaves room for autoomous itervetio, it leaves more space to decide how workplaces will be desiged. Work orgaisatio Throughout the decisio sequece described above, the orgaisatio will have already made may structurig decisios. What is left is the way workplaces themselves will be desiged. It is still ecessary to make clear what is expected from the people allocated to a give workplace. This groupig of tasks ito workplaces is called work orgaisatio. It is importat to determie this groupig accordig to two geeral dimesios. Oe is the width of the tasks allocated to the workplace. Should a compay opt for small specialised workplaces or broad workplaces ecompassig may tasks? The other dimesio is the compositio of the workplace. Is it a sigular workplace specialised i value-addig activities, or should a compay chose a multiple compositio which icludes preparatory, supportig ad regulatory tasks? Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

6 High performace workplaces: Backgroud paper for the Third Europea Compay Survey Orgaisatios ad the employmet relatioship Imagie a perso whose favourite pastime is makig furiture. At weekeds, this perso ivites a couple of frieds to help with wood processig, assembly ad decoratig. While this is a ejoyable activity for all cocered, o oe would thik of callig the group a orgaisatio. Yet if these people carried out exactly the same activities withi a work plat, they would be workig i a orgaisatio. It is therefore obvious that somethig does ot fit i our statemet that a orgaisatio is a structure of the divisio of labour. Or rather that it is icomplete. Of course orgaisatios have a structure of divisio of labour i the same way as they have a ame ad a address. But orgaisatios are ot structures of divisio of labour. Neither the activities we do or how we do them determie whether or ot we are dealig with a orgaisatio. The differece lies i the work cotract we have whe workig i the furiture plat. This work cotract specifies a umber of aspects i our relatioship, especially regardig pay or workig times, but remais ope as far the tasks to be performed are cocered. These tasks are specified durig the cotract. The fact that what you are required to do is somewhat imprecise is ot a deficiecy, it is the very essece of a work cotract because this is a authoritaria relatioship. By sigig the cotract, you promise to obey orders. I case of chages, o ew cotract is siged because the work cotract is a relatioship of authority. The pay you receive is ot so much a compesatio for a give task but rather a compesatio for your promise to be available ad, withi certai limits, execute orders. As the tasks to be doe ca be chaged without disruptig the work cotract, this allows orgaisatios to adapt to chagig circumstaces. This is differet from relatioships cocluded o the market. As there is o authoritaria relatioship betwee, for example, a orgaisatio ad a subcotractor, agreemets o what should be delivered are specified i great detail. A orgaisatio therefore delimits itself by selectig with whom to sig a work cotract. There is at the same time a decisio to egage i certai activities while other activities will be bought o the market. The promise to obey orders after sigig a work cotract has certai limits. Whe those limits are surpassed, people may refuse to carry out a order or eve quit the orgaisatio. But however dramatic this may be, the orgaisatio does ot cease to exist. Although the work relatioship is with a perso, it caot be reduced to that. If a orgaisatio eds the agreemet with oe perso ad replaces them with aother perso, o chage has occurred from the viewpoit of the orgaisatio. What is at stake is the kid of decisios the orgaisatio takes i startig up, cotiuig ad fiishig work relatioships. Just as i the case of the structure of decisio of labour, it is irrelevat whether the perso carryig out the tasks of a workplace is perso X, Y or Z. We do ot look at people ad their characteristics, but to orgaisatios ad their characteristics. It shold be clear ow that orgaisatios are orgaisatios because they take o people by meas of work cotracts ad put them to work i the productio process. I order to realise this, orgaisatios eed to take a umber of iterrelated decisios. We call these decisios the employmet relatioship. Recruitmet process I decidig to recruit people, a orgaisatio ot oly decides the activities to be carried out but also which capacities will become available. Skills are at the disposal of the orgaisatio. Specialised qualificatios ca be looked o as maagemet skills, problem-solvig skills, social skills ad so o. A orgaisatio may look for skills that are immediately usable or which will require additioal traiig. A orgaisatio ca also choose to recruit people with skills that are ot yet required but may be ecessary i the future due to, for example, plaed ivestmet i techology. 4 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

7 High performace workplaces: Backgroud paper for the Third Europea Compay Survey There are a umber of factors to be cosidered durig recruitmet. Duratio of work relatioship. The cotract offered to ew members of a orgaisatio is determied by the law. Yet the orgaisatio eeds to specify may other coditios. Oe is the iteded period of the membership. Is a membership iteded to be of idefiite duratio or a defiite duratio for a give task? Which mix of those optios is iteded? Pay. I work cotracts, arragemets o pay are usually specified i great detail. Differet optios that may be combied are possible. Next to fixed pay, remueratio may be based o performace accordig to differet criteria such as output, quality ad iovatio. Variable pay may be liked to performace of the idividual, of groups or the orgaisatio as a whole. Withi the orgaisatio, differet pay levels may be itroduced accordig to age, experiece, level of educatio, seiority or a iteral classificatio of workplaces. Workig times. The orgaisatio eeds to make it clear whe activities eed to be performed. Although there are umerous regulatios that eed to be followed, the orgaisatio has cosiderable leeway betwee the miimum ad maximum hours allowed, their variatio ad to what extet flexible workig hours are expected. Allocatio. Workplaces are packets of tasks that are the result of decisios regardig the structure of divisio of labour. A perso ca be allocated to a sigle workplace or subsequetly to differet workplaces, for example, to achieve some level of polyvalece (that is, the capacity to carry out more tha oe task). The rotatio betwee workplaces may be o a daily basis, weekly or eve loger periods of time. Next to horizotal rotatio, employees ca also move upwards or dowwards. Workplaces i a orgaisatio are ordered hierarchically accordig to certai criteria, for example, accordig to the power to regulate or the skills required to perform the tasks. However, it is importat to specify the criteria for vertical mobility. Traiig. Recruitmet will have provided the orgaisatio with a umber of skills at its disposal, but these skills are ulikely to fulfil all the skills it requires. This imbalace ca be remedied through traiig. Traiig, however, is ot cofied to the iitial period withi the orgaisatio. Skills may eed updatig after a while, especially whe there is horizotal or vertical mobility. The orgaisatio eeds to decide o the ature ad level of such traiig. Idustrial relatios. The relatioship betwee workers ad the orgaisatio has a importat collective dimesio. The agreemets about the coditios uder which work is performed are egotiated o a collective basis. Equally, eve though the work cotract is a ackowledgmet to obey orders, these may be resisted collectively. To avoid egotiatios with (ad protests from) all idividual employees separately, orgaisatios chael these egotiatios through cosultative bodies. The orgaisatio eeds to defie the coverage of collective bargaiig, the themes that ca be discussed ad the level of say these bodies have. Hamburger model The decisio o the productio cocept (the top half of the hamburger) leads to workplaces with certai characteristics such as stress risks or learig opportuities durig work. Evetually, of course, real people will be allocated to these workplaces. Oly the it will it become clear to what extet these workplace characteristics with their risks ad opportuities will lead to real cosequeces for the people ivolved, such as psychological well-beig, health ad job satisfactio. Similarly the decisio o the employmet relatioship (the bottom half of the hamburger) leads to membership sets with certai characteristics, such as career opportuities, possibilities to defed iterests, risks of precariousess. But oly whe real people are allocated to these membership sets does it become clear to what extet these membership sets lead to real cosequeces for people such as job isecurity, skill acquisitio ad job teure. Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

8 High performace workplaces: Backgroud paper for the Third Europea Compay Survey The choices made i both halves of the hamburger ot oly have cosequeces for employees but also for orgaisatios ad their performace. They will ifluece the extet to which orgaisatios are able to meet demads from their eviromet i terms of productivity, quality, flexibility, iovatio, sustaiability ad so o. Throughout this descriptio we talk about choices. But choices are restricted, especially whe other choices have already bee made. As i a chess game, at the start may choices are ope. But oce decisios have bee made ad pieces moved, the followig choices must be made withi the framework of the choices already made. Although a broad rage of optios remais, the choices already made must be take ito accout. Similarly, the hamburger model poits out that choices made i oe dimesio restrict the available space of selectio for other decisios, but without determiig these. I particular, the model poits to the mutual depedecy betwee the upper ad lower half of the hamburger. This is a major reaso why chages are ofte difficult ad slow i orgaisatios. To perform well, chages i oe aspect may eed chages i other aspects, but as all chages are difficult to push through simultaeously, some choices may slow dow the possibilities for chage i other dimesios. What is a high performace work system? Cetral features Orgaisatios do ot have to start from scratch to make all the decisios idicated above. There are certai patters i the choices may orgaisatios make, patters that evolve over time. Such models have received may labels such as Taylorist, Fordist, lea productio, sociotechical, busiess process re-egieerig, ad high performace work system (HPWS). Commo to all these labels is that they all represet certai choices i the hamburger model, eve though differet models may emphasise certai dimesios as most importat. We do ot eed to ask differet questios to ivestigate whether a orgaisatio ca be give such or such a label. The dimesios to be ivestigated remai the same, oly the result of the choices made will determie to what extet a give orgaisatio deserves a certai label. The same holds true for a high performace work system. The coceptual model provides us with the cocepts to describe the high performace work system model. Although the label is used to refer to a wide rage of orgaisatioal choices, it is importat to gai a clearer picture of: the commo themes betwee these features; the criteria by which a high performace work system ca be idetified; how these criteria are liked to each other. Below we idetify the criteria that are part of a high performace work system as a step towards establishig idicators with which to idetify them. First of all, the descriptio work system refers to a umber of specific iterrelated work practices. Although a work system ca be broke dow ito a umber of work practices, its outcomes are chiefly determied by their itegratio i a coheret budle or cluster. This is because complemetarities ad syergies exist amog work system practices themselves, ofte referred to as a horizotal match (Appelbaum et al, 2000). I geeral, a high performace work system is characterised by a productio cocept that allows for extesive employee ivolvemet i operatioal decisio-makig as a meas of haressig people s potetial more effectively ad of improvig the orgaisatio s performace. Workers i a high performace work system experiece greater autoomy 6 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

9 High performace workplaces: Backgroud paper for the Third Europea Compay Survey over their tasks ad methods of work, ad have higher levels of commuicatio about work matters with other workers, fuctioal specialists, maagers ad, i some istaces, with vedors or customers. Choices regardig the employmet relatioship are also importat. Workers i a high performace work system require more skills to do their jobs successfully ad may of these skills are compay-specific. It is vital to provide workers with icetives to ivest i obtaiig additioal skills ad to egage i activities, such as problem-solvig, i which the effort is difficult for maagers to specify. Job security provides workers with a log-term stake i the compay ad a reaso to ivest i its future. Together with icetives, pay motivates workers to make a extra effort i developig skills ad participatig i decisios. A productio cocept with choices as broader job defiitios, team productio ad resposibility for quality, liked to a employmet relatioship that provides icreased traiig, job security ad pay icetives, should lead to better performace by those orgaisatios. This is i accordace with the eed for a horizotal fit i work practices i which the coherece betwee productio cocept ad employmet relatioship is stressed (MacDuffie, 1995). I both domais, the commo theme is oe of greater ivolvemet, that is, greater ivolvemet o the part of frotlie workers (for example, i the tasks ad resposibilities take o by workers resultig from aother divisio of labour). To support this, however, meas also greater ivolvemet o the part of the orgaisatio towards its workers (for example, with the aim of establishig a log-term relatioship with workers by providig maximum job security). Thus the label high performace work system, which as such does ot refer to the ature of the work system itself other tha sayig that it performs well, ca be replaced by high-ivolvemet work system, referrig to the higher ivolvemet of workers as well as orgaisatios. Whether such a high-ivolvemet work system does ideed perform more effectively remais to be ivestigated (Pil ad MacDuffie, 1996). However, due to its more commo label, we will cotiue to apply the label high performace work system i this paper. Productio cocept i a high performace work system Over the past cetury the emphasis i the divisio of labour was o stadardisatio. Fuctioal specialists had to determie scietifically the best way of workig, while lie maagers had to make sure these stadards were meticulously applied. I terms of our cocepts, this orietatio implies that the performace of work is beig separated from its support ad preparatio. The same is true for the cotrol ad steerig of the process. The collectio of iformatio, cotrol by meas of pre-established orms, itervetio i the evet of deviatios ad the assurace of lastig coordiatio betwee tasks are assiged to lie maagemet i order to allow the workers to execute their tasks idepedetly. The secod cetral feature of the traditioal divisio of labour is specialisatio. Whe work ca be divided ito as may pieces as the productio volume allows, importat efficiecy improvemet ca be reaped. The emphasis o specialisatio is reflected i the way the tasks are divided. This ca be either by groupig the same kids of tasks ito departmets or groups, or by likig these tasks sequetially i a lie structure i which all tasks are cofied to the executio of a fragmeted ad distict part of the process. The emphasis o specialisatio ca also be see i the separatio betwee the preparatio, support ad steerig of the process i which specialists take o distict parts of each of these domais. Moreover, the features of specialisatio ad stadardisatio reiforce oe aother. As work is fragmeted ito partial tasks, workers are uable to have a overview of the whole process ad are therefore uable to take o fully the preparatio ad support liked to this whole. This is also true of the steerig of the process because splittig up performace ito fragmeted parts creates a greater eed for mutual coordiatio. A weighty hierarchy the becomes ecessary to retai the process withi the prescribed goals. Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

10 High performace workplaces: Backgroud paper for the Third Europea Compay Survey A high performace work system will avoid such extesive specialisatio ad stadardisatio of tasks because this gives way to much rigidity ad edagers the efficiet cotrol of the process. As orgaisatios face icreasig turbulece i their eviromet, it is crucial ot to desig a productio cocept that reiforces this turbulece withi the orgaisatio. More complete parts of the process eed to be allocated to groups of workers who together make a product or deliver a service. I such a cofiguratio, these groups ca also be etrusted with resposibility for the support ad preparatio liked to this process as well as the resposibility for cotrollig ad steerig the process as a semi-autoomous group. Possible idicators of a high-ivolvemet work system, relatig to the productio cocept, ca be summed up as follows. Market-focused or process-orieted busiess uits or divisios: A orgaisatioal structure moves away from a lie or fuctioal structure to create busiess uits that cocetrate o distict parts of the market or critical processes i order to achieve a better customer focus ad greater accoutability of the workers ivolved. Semi-autoomous teams: Workers are grouped ito teams i which they work together o a complete (part of the) product or service ad are collectively resposible for a maximum amout of preparatio, support ad steerig of this process. Reductio i the umber of fuctioal specialists: Istead of maximum fuctioal specialisatio, the tasks of fuctioal specialists are itegrated withi the tasks of the team members actually addig value to the product or service. Reductio i layers of maagemet: The delegatio of cotrol ad steerig capacity to those actually addig value to the product or service provides them with the ecessary autoomy to respod to chagig circumstaces. Compared with a traditioal divisio of labour, this leads to flatter orgaisatios where lie maagers are ivolved i facilitatig ad coachig rather tha steerig ad cotrollig. Quality maagemet, total productive maiteace, cotiuous improvemet programmes: Programmes set up to ivolve workers i improvig the process, empowerig them to make a cotributio outside their routie job. For fuctioal specialists this leads to closer ivolvemet ad coordiatio with those actually makig the product or providig the service. Employmet relatioship i a high performace work system The chages outlied above i the productio cocept allocate more tasks ad resposibilities to those actually addig value to the product or service ad require greater ivolvemet by these workers. The orgaisatio expects more from its workers tha the mere performace of stadardised ad specialised tasks. However, a mere chage i the productio cocept is ot sufficiet to achieve such ivolvemet. To esure that workers actually take o the greater tasks ad resposibilities allocated to them by the ew divisio of labour ad to esure that the autoomy provided is also exploited i the iterest of the orgaisatio ( resposible autoomy ), the orgaisatio has to uderpi this ivolvemet with a appropriate employmet relatioship. I this policy, the required ivolvemet from workers is reciprocated by greater ivolvemet o the part of the orgaisatio towards its workers. This is expressed by reiforcig the iteral labour market i the orgaisatio. Orgaisatios with a strog iteral labour market are characterised by the iteral fillig of vacacies, with a cocetratio of exteral recruitmet through the doors at the lower ed of the promotio scale ad ample promotio possibilities withi the orgaisatio. The iteral mobility of workers withi the orgaisatio is more importat here tha the iflux ad outflow of workers. This is illustrated by a umber of features of the employmet relatioship liked to the aforemetioed chages i the divisio of labour. 8 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

11 High performace workplaces: Backgroud paper for the Third Europea Compay Survey Flexible allocatio Flexible allocatio refers to forms of rotatio i which workers regularly chage betwee workplaces as well as trasfer betwee departmets i a loger-term perspective, for example, as part of career developmet. This flexibility is liked to the de-specialisatio, which is also iheret i the productio cocept of a high performace work system. The traditioal policy of bidig workers to oe specific job the right ma i the right place i order to achieve fast routies ad efficiecy is reliquished. Equally, withi a career developmet perspective, the trasfer of workers betwee departmets is iteded to avoid excessive focus o specific occupatioal qualificatios ad the accompayig barriers to cooperatio betwee differet departmets ad specialists. Whereas i a traditioal work system workers almost ow their jobs, their loyalty i a ew work system is directed towards the orgaisatio. This implies that they are also willig to be allocated to those jobs i the orgaisatio where the orgaisatio has the most urget eed. A idicator of a high performace work system is job rotatio ad multiskillig of workers. The traditioal boudaries betwee job categories are removed ad employees are ecouraged to wide their skills ad to work i a more flexible way. Pay ad vertical mobility As a cosequece of the icreased flexibility of workers, the traditioal basis for determiig wages has to shift as well. If workers are o loger liked to a give job, their remueratio caot be based exclusively o the characteristics of that specific job. Other wage criteria the become importat such as the degree of polyvalece of the worker or the qualificatios obtaied. I this case, workers are ot merely paid o the basis of what they do, but o the basis of what they ca do, that is, their skills. This does ot ecessarily imply a flatteig of the wage structure. Workers ca have differet wages, eve whe they perform similar tasks because wages also reflect worker characteristics, ot merely workplace characteristics. As the loyalty ad ivolvemet of workers are cetral i a high performace work system, issues as the degree of polyvalece, the umber of improvemet proposals delivered, ad the attitude ad commitmet towards the orgaisatio as evaluated by superiors become more importat wage criteria ad appraisal criteria with respect to promotio. I this perspective, variable pay compoets are itroduced, that is, variable i as much as wages are liked to idividual skills ad performace. However, give the ivolvemet of the workers withi groups ad, ultimately, with the orgaisatio, their pay will also reflect more closely the ups ad dows of the orgaisatio as a whole. From the perspective of the orgaisatio, the itetio to egage i a log-term relatioship with workers will also be reflected i its wage ad promotio policy. A broad wage spa withi the orgaisatio eeds to be established with ample promotio possibilities, ot ecessarily as vertical promotio betwee job categories but also as radial promotios withi job categories. I additio, other secodary advatages should be liked to the affiliatio of the worker to the orgaisatio such as hospital isurace, pesio fuds ad capital participatio to reiforce the iteral labour market ad make the exit alterative for workers less attractive. Idicators of a high performace work system iclude: greater use of profit-sharig, bouses ad share schemes i which part of the wage is related to the performace of (part of) the orgaisatio; variable idividual pay compoets based o seiority, the acquisitio of skills, participatio i problem-solvig ad so o; Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

12 High performace workplaces: Backgroud paper for the Third Europea Compay Survey ew performace measures ad more ope commuicatio about performace ivolvig use of exteral sources to measure performace as customer satisfactio or bechmarkig, ew criteria for evaluatig performace (that is, based o objectives for teams ad idividuals) ad more ope iformatio flows from maagemet to workers about performace to eable teams ad idividuals to take appropriate decisios; small wage gaps betwee job categories but large wage gaps withi job categories; promotio criteria based o seiority but also o idividual performace istead of bureaucratic rules; a emphasis o iteral promotio to supervisory jobs istead of exteral recruitmet. Numerical flexibility: Cotractual versus temporal flexibility The icreased flexible allocatio i a high performace work system requires a greater willigess by workers to adapt. However, the possibility of relocatig workers betwee workplaces accordig to eeds provides the orgaisatio with a additioal tool for esurig job security. As log as workers are tied to oe specific workplace which they possess ad are etitled to a umber of rights associated with this workplace, orgaisatioal restructurig is more difficult to implemet. Oce agai, the relatioship betwee worker ad orgaisatio is cetral i a high performace work system. Workers receive more guaratees about job security but ot about the workplace to which they will be allocated withi the orgaisatio. Cotractual stability is therefore a essetial feature of a high performace work system, at least with regard to its core workers. Ideed, the productio cocept is such that workers are ot as easily iterchageable with workers from the exteral labour market. I additio, workers have to cooperate ad the lack of complete stadardisatio implies that workers are expected to apply their persoal skills ad kowledge i their work. Teamwork is difficult to combie with a high turover. The required flexibility will therefore be achieved usig the available workforce. Next to fuctioal flexibility, temporal flexibility will also be used to adjust capacity i order to cope with fluctuatios i demad. The ivolvemet of workers is reflected i a willigess to be allocated to those workplaces ad at the times the orgaisatio requires. For its part, the orgaisatio commits itself more strogly to employmet security ad cotractual stability. Idicators of a high performace work system iclude: high level of job teure ad limited use of short-term cotracts; more flexible workig hours such as aualised workig hours, overtime or temporary uemploymet which eable orgaisatios to adapt to seasoal chages ad irregular surges i demad usig the available workforce. Recruitmet ad selectio The chages i the productio cocept require greater skills from frotlie workers. They have to be able to fulfil more tasks ad resposibilities, possess the commuicatio skills required to cooperate with others ad be able to take the iitiative i order to exploit the autoomy provided. Moreover, i view of the fuctioal flexibility of workers, selectio is ot orieted so much towards a examiatio of the ecessary skills for a specific workplace, but rather to the willigess ad capacity for acquirig skills withi the orgaisatio as a whole. I additio, soft qualificatios such as beig able to lear ad cooperate with others are more importat i terms of selectio criteria. This does ot imply that selectio procedures are less striget. O the cotrary: give the desired log-term relatioship, the orgaisatio wats a guaratee, through a elaborate selectio procedure, that ewly hired workers have the desired skills. However, these skills are more cocered with attitude ad capacity tha precisely defied occupatioal qualificatios. 10 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

13 High performace workplaces: Backgroud paper for the Third Europea Compay Survey I view of the stroger iteral labour market i a selectio, recruitmet itesity will be weak ad aimed at fillig vacacies at the bottom ed of the orgaisatio. Orgaisatios will ot compete solely with each other o the basis of wage levels but usig the image of a good employer offerig job security ad ample promotio opportuities. Idicators of a high performace work system iclude: elaborate selectio procedures (also for frotlie workers) icludig group iterviews or exercises; emphasis i selectio procedures o attitude ad abilities rather tha occupatioal qualificatios, with recruitmet criteria placig less emphasis o previous experiece i a similar job or specific techical experiece, ad more o willigess to lear ew skills ad to work with others. Traiig policy Give the higher skills required to fuctio i a high performace work system, the orgaisatio is obliged to ivest i appropriate traiig. This eed is reiforced by the flexible allocatio of workers, i which they have to cotiue to lear i differet workplaces. Due to the log-term relatioship betwee workers ad the orgaisatio, the willigess to ivest i traiig will be much higher o the part of the orgaisatio. From the worker s poit of view too, the willigess to acquire skills is greater as this acquisitio is reflected i pay as well as i promotio opportuities. The possibilities for acquirig skills i a high performace work system are ot oly better due to formal traiig, but perhaps also most of all because the workplaces desiged i the productio cocept offer more learig opportuities for workers i ad through work itself. These workplaces, which make high demads o workers but where workers also possess the autoomy eeded to tackle these demads, offer the best learig opportuities. The acquisitio of skills is therefore more compay-specific compared with the occupatioal skills as taught by exteral traiig istitutes. This stregthes the iteral labour market sice the skills acquired are of less value outside the orgaisatio ad dimiishes the exit alterative for workers. Idicators of a high performace work system iclude: traiig is ot cofied to the skills eeded to a specific workplace but exteds to iterpersoal skills, teamwork, problem-solvig methods, statistical process cotrol ad so o; extesive traiig, ot merely for skilled workers ad maagers, but also for frotlie workers; ample opportuities to lear from work itself ad from others you are collaboratig with at work. Labour relatios I a traditioal work system, the defece of worker rights is exercised through the precise codificatio of fragmeted tasks o the basis of which workers have specific rights. I collective bargaiig, a elaborate job classificatio is specified, with much attetio devoted to the requiremets of each job ad the procedures for the trasfer of workers, their promotio or dismissal. Such protectio of workers based o arrowly defied job descriptios is icompatible with the flexible allocatio i a high performace work system. The associated dismatlig of such job cotrol mechaisms etails a weakeig of uio ifluece. Moreover, the flexible allocatio of workers to jobs i the orgaisatio udermies the idetificatio of workers with a specific job ad therefore also the solidarity with a specific occupatioal group. The iterests of the worker are liked more to the orgaisatio as such, which is more compatible with compay uios ad a decetralisatio of collective bargaiig at compay level. Europea Foudatio for the Improvemet of Livig ad Workig Coditios,

14 High performace workplaces: Backgroud paper for the Third Europea Compay Survey The protectio of worker rights should ot be limited to job cotrol mechaisms. Other bargaiig topics ca emerge i a ew work system, for example, the traiig of workers ad strategic decisios for the orgaisatio. Moreover, as autoomy is allocated to frotlie workers, the orgaisatio becomes more depedet o the ivolvemet of workers. The ew work system is therefore also fragile, potetially givig workers (ad their represetatives) greater bargaiig power. However, this bargaiig power may be weakeed by the less attractive exit alterative for workers. I additio, the log-term relatioship betwee workers ad the orgaisatio prevets uios from abusig their bargaiig power at the expese of the orgaisatio s survival. But at the same time this log-term relatioship will prevet orgaisatios basig their competitive edge primarily o low wages ad poor labour coditios. Labour relatios are therefore characterised by a more cooperative attitude betwee both parters. Not surprisig, high performace work systems are also labelled as high-trust orgaisatios. A idicator of a high performace work system is a worker/maagemet relatioship based o mutual iterests ad a cooperative approach to problem-solvig, which avoids defiig the relatioship i terms of extesive rules. Is a high performace work system ecessary? Cosiderable evidece is available to show that product ad techological life cycles have shorteed ad that the variety of products has expaded sigificatly. The marked icrease i the umber of automobile models over the past few decades, the acceleratio of fashio seasos i clothig, the proliferatio of services provided by baks, ad the sharp icreases i the umbers ad varieties of products available i supermarkets all suggest that compaies that focus o producig huge umbers of oly oe product style will be i trouble. The developmet of microprocessor-based iformatio ad computer techologies has also boosted the proliferatio of products ad the shorteig of product life cycles. I this eviromet, movig quickly dow the learig curve i providig ew geeratios of products ad services, ad gettig them to the market quickly, ca be a importat competitive advatage (Appelbaum et al, 2000). These chages i the essetial performace criteria for orgaisatios have caused a wide variety of sectors to rethik: the role of workers i the productio process; the cotributio that a skilled ad motivated workforce ca make to performace. A more skilled workforce ca reduce the time ivolved i learig to produce ew products or services ad ca deliver a more substatial cotributio to solvig problems. A high performace work system ca help orgaisatios to improve their iovative capacity by: achievig faster developmet cycles; wideig the product rage; respodig more rapidly to chagig customer eeds; addig value to existig products ad services; upgradig products more rapidly. 12 Europea Foudatio for the Improvemet of Livig ad Workig Coditios, 2013

15 High performace workplaces: Backgroud paper for the Third Europea Compay Survey The eed for a trasitio to this type of ew work system will be more urget as such demads are made by a orgaisatio s eviromet. There must be a vertical match betwee orgaisatioal characteristics ad the exteral eviromet, icludig compay strategy. Traditioal work systems ca also perform ad have performed very well i the past, although i a eviromet i which orgaisatios competed maily o the basis of price ad pursued ecoomies of scale. I this eviromet, maagers viewed labour as a cost to be miimised rather tha as a asset that could provide the compay with a advatage over its competitors. Labour i these orgaisatios was fragmeted ito simple, repetitive tasks that ivolved little employee discretio. The emphasis was o idividual efficiecy ad mastery of easily leared jobs. Motivatio was assumed to be based solely o idividual fiacial icetives ad workers were ot expected to cotribute ideas. A high performace work system does ot claim to be the ideal optio for all orgaisatios i all circumstaces. However, the icreasig levels of ucertaity ad chage i the eviromet of may orgaisatios create powerful icetives to move to a ew work system based o employee participatio. To what extet orgaisatios have really implemeted such a high performace work system ad to what extet this implemetatio also leads to better performace are issues to which the third Europea Compay Survey i 2013 (ECS-3) should be able to cotribute. Refereces Appelbaum, E., Bailey, T., Berg, P. ad Kalleberg, A. (2000), Maufacturig advatage: Why high performace work systems pay off, ILR Press, Ihaca ad Lodo. De Sitter, U., Naber, J. ad Verschuur, F. (1994), Syergetisch producere: Huma resources mobilisatio i de produktie: Ee ileidig i structuurbouw, Va Gorcum, Asse, The Netherlads. MacDuffie, J.-P.(1995), Huma resource budles ad maufacturig performace: Orgaizatioal logic ad flexible productio systems i the world auto idustry, Idustrial ad Labor Relatios Review, Vol. 48, pp Pil, F. ad MacDuffie, J.-P. (1996), The adoptio of high-ivolvemet work practices, Idustrial Relatios, Vol. 35, pp Va Hootegem, G. (2000), De draaglijke traagheid va het maagemet: Tedese i het productie- e persoeelsbeleid, Acco, Leuve ad Amersfoort. Rik Huys, Moique Ramioul ad Geert Va Hootegem, Katholieke Uiversiteit Leuve EF/13/03/EN Europea Foudatio for the Improvemet of Livig ad Workig Coditios,