Saturday, 6 March 2010

Solid Evidence that HRM and Engagement can Work

As HR academics and practitioners we are consistently looking for good evidence that HRM actually works - that the adoption of high performance work practices pays off in terms of ley measures of performance, such as productivity, quality, customer service, etc. We need such evidence to build our respective cases, and there has been quite a bit of it around for the last twenty years beginning the Mark Huselid's large-scale statistical studies in the 1990s. Often, however, the academics have have failed to look at this issue over long periods of time, so demonstrating consistent and long terms effects of the use of high performance work practices and related engagement strategies, which, if done well, would represent something of a gold standard of proof that investment in HRM actually works.

This morning I and quite a few of my HRM academic colleagues were sent the results of a paper that goes some way to delivering such proof, though they are more modest and, like good academics, highlight their study's shortcomings. The work comes out of the Institute of Work Psychology stable at Sheffield University, run by Stephen Wood. Here's his summary of the paper and its contribution in the email he sent out.

'My colleague, Lilian de Menezes, and I examined the integrated use in British manufacturing of a set of lean management practices in which employee empowerment was a major component over 22 years. We found in all 22 years that those firms that used the integrated lean approach (my emphasis) has higher levels of productivity (measured by value-added). In addition, we found that the pioneers of the high lean approach continued to outperform even those that subsequently adopted it. These later adopters gained the performance advantages associated with the integrated approach, but their productivity growth was not sufficient to catch up with those which had adopted it earlier. This shows that the employee engagement, so central to lean production, achieves its aim of continuous improvement.

The practices included in the study are: empowerment, intensive training and development, team work, TQM, Just-in-time, integrated computer-based technology, and supply-chain partnering

The study was financed by the ESRC and will appear in: L. de Menezes, S. Wood and G. Gelade, ‘A longitudinal study of the latent class clusters of modern management practices and their
association with organizational performance in British manufacturing’, Journal of Operations Management'.

Lilian, Steve and Gerry acknowledge the limitations of their study, suggesting that gold standard proof would need to consider not only productivity data but also evidence on quality and lead times in manufacturing. Nevertheless, this study represents an important step forward and substantial argument for integrating engagement strategies - team working and empowerment - with lean techniques. Given the widespread adoption of the latter in healthcare in the UK, maybe its time to puut in place a similar study to test the impact of these large scale and somewhat controversial initiatives.

No comments: