The Impact of High Performance Work Systems on Workplace Learning and

Social DialogueIan Cummings, Senior Specialist, ILO EASMAT,

Bangkok

www.ilo.org

KLI/ILO NationalTripartite Workshop on Skill Development, High

Performance Work Organization and Social Dialogue

Overview of the presentation• Introduction to the ILO’s work on learning and training • Forces of Change in the global environment in which high

performance work organizations (HPWOS) exist• Some challenges faced by HPWOs• Management initiatives in high performance workplaces• Benefits to employees of HPWOs• Government’s role in promoting high performance work

practices• Productivity and human Capital in HPWOs• Workplace learning culture• Conclusions

ILO’s work on learning and training in enterprises

• High performance work organizations

• case studies and synthesis report including a major monograph “Supporting Workplace Learning for High Performance Working” (ILO 2002)

• Small and Medium Enterprises ( see monograph)

• case studies and synthesis reports in Asia, Africa and Europe

• Ongoing research with partners such as the International Federation for Training and Development (IFTDO)

Forces of change: global environment

• Unforeseen economic and social instability and volatility throughout the world- threats to world peace (war and terrorism)

• While nations in Asia continue to deal with economic and social issues while grappling with predictions of how globalization will alter, and to what extent it will affect regional economies and labour markets.

Forces of change: global environment

• Risk analysis and economic predictions of markets based on assumptions that the “future” will proceed in a linear fashion now appears limited

• Countries in Asia need to develop a new range of policies to promote a more flexible response to global social and economic fluctuations

• Requires flatter and more consultative management systems, matched with continual upgrading of skills to meet the challenge of new technologies and new working arrangements necessary to ensure productivity and global competitiveness.

Forces of change: workplace

• HPWOs are a reasonably new development, ostensibly driven by Globalization’s demand for synergy between economic objectives (competitiveness) and social objectives (participation) in the global economy• There is a requirement for management systems to enhance performance• Enterprises must become leaner, more flexible, adaptive and quicker in their response to market changes• This dictates new structures and forms of work organization away from Taylorist hierarchies to flatter work organizations

Some challenges faced by HPWOs

• Costly lessons have been learned by firms making half-hearted attempts to introduce high performance work practices

• Some managers and workers resist change - if it is not properly engineered

• Longitudinal studies find that rigid hierarchies result in workers becoming physiologically stressed, lacked self-confidence and dealt less flexibly with ideas

Management initiatives in HPWOs• Previous confusion about what HPWOS were has now reached a consensus on the main features:

• Strategic vision and leadership from management• Devolved decision-making• Self-managed work teams• Clear links between training, development and organizational objectives• High levels of service and value added to the

customer

HPWOs devolve more responsibility and decision making to individual employees and teams

Management initiatives in HPWOs

Comparisons between traditional and HPWOs

Traditional HPWO- Rigid hierarchy-many levels - Flatter management- Command and control authority - Devolved responsibility- Strict demarcation of responsibilities - Team working- Intense division of labour - Multi-skilling- Fragmented tasks - Control through - Close supervisory control commitment

Recent case studies show that, contrary to the belief that most HPWOs were limited to larger multinationals, it is now emerging that medium and smaller enterprises are adopting HPWPs

HPWO benefits to employees

• Employees benefit in a number of ways;• higher wages• more job satisfaction• higher levels of training and skills (including

new skills• better social skills• participation in decision making• improved self-confidence

Some trade unions now enter into social dialogue, partnerships and workplace agreements on HPWOs

Government’s role in promoting high performance work practices

• Conventional role is to provide education and public TVET institutions - but is this static model still valid? As interdependence grows and new skill paradigms emerge, market demand may not reflect the true need for training because of:

- poor or obsolete labour market information- employers’ reluctance to invest in training

- rigidities in promotion and wage systems- social demand for training- lack of real incentives for training

Government’s role in promoting high performance work practices Should governments retreat from direct training provision to the role of providing the regulatory framework and creating an enabling environment? For example:

•Policy formation, the need for a clear view of where a country, its economy and its human resources are going• Providing incentives• Supporting better communication flows• Providing foundation skills and tools for learning

Productivity and human capital in HPWOs• In the knowledge economy human capital and the knowledge possessed can be considered as intangible assets

•A study cited in a recent OECD publication on employment in a knowledge-based economy differentiates between four kinds of knowledge know what, relates to knowledge of facts (information); Know why, to do with scientific, technological, managerial, societal etc.; know how, capability to do something; know who (or know where), combination of social skills and information about who knows what to do, an area in which ICT can play a role.

• Social capital (a tight network of relationships within the workplace) cannot be ignored as part of human capital

Workplace learning culture

At the level of enterprise - a learning culture can be promoted through:

- flatter organizations and self managed teams;- well developed induction training;- more flexible work assignments within broader

job descriptions and realistic job reviews- extensive training for experienced employees;- more employee involvement in decision-making- better job security; and- shifting the role of managers away from day-to-

day control towards enabling & facilitation

Workplace learning cultureSpecific techniques that mainly apply to Just-in-time

learning my be needed to support some production processes, services, markets and clients:

- “cross training,” utilizing techniques of multi-skilling- job rotation to broaden/deepen skills;- formal and informal problem-solving groups (e.g.

quality circles);- mentoring, through the use of more experienced

workers/mangers as guides and facilitators;- promoting and rewarding “research” linked to

problems, products or processes and making use of ICT

Returns to training/learning is higher in the workplace Returns to training/learning is higher in the workplace if properly targeted and within the right if properly targeted and within the right organizational frameworkorganizational framework

Conclusions

• The intensification of competition in global markets requires higher levels of productivity at a rapid pace to respond flexibly and immediately to the needs of the market• While there are problems in transition to HPWOs, there are many benefits in productivity, less industrial discontent - higher wages and better conditions for workers• HPWOs are not the only answer to productivity in countries where there is low-cost disciplined workforces

Conclusions

• There is a need for governments to change their role to meet the needs of a knowledge-based economy and to provide incentives for enterprises to become HPWOs•Research into the trend towards HPWOs by many enterprises and whether the benefits outway the costs is by no means conclusive

•However, present research and anecdotal information indicates that there are positive attributes that are evident in HPWOs.

Thank you