How to Develop High Performance Work Systems (HPWS) to Increase Business Productivity

Business productivity in the UK is in crisis. We’re among the lowest in the G7, with UK productivity a staggering 17% below the USA and France.

So often businesses look to new sales or marketing campaigns to resolve productivity issues and increase profitability.

Instead of looking for external solutions to internal problems, we think everyone needs to rethink business and make work better with a high performance work system (HPWS).

We’ll be looking briefly at what a HPWS is and how you can develop one for your business.

What is a HPWS and why Does Your Business Need one?

Wouldn't it be great if everyone in your business was working to their full capability?

That's exactly what a High Performance Work System aims to achieve. It does this through adopting systems of work which improve performance. Nothing too groundbreaking, right?

The previous approaches to achieve this focused on machines and technology. For example, getting a new CMS to better analyse data or automating more processes to free up employees.

But despite these well-intentioned approaches, productivity didn't increase. In fact, the further we've moved into the Fourth Industrial Revolution and the technologies it can offer, the more productivity has struggled. It's what's known as the productivity paradox.

High performance work systems look to address this by taking a new approach — one that focuses on people. After all, people are at the heart of any business

HPWS achieve this by creating a culture of high performance for businesses. There is much discussion between academics, economists and other thought leaders around what the key characteristics of a high performance work culture is. But generally speaking, a high performance work culture will have most, if not all, of the following aspects:

• A company culture of learning and continuous improvement

• Strong leadership with emotional intelligence to foster this culture

• A HRM strategy utilised to promote a positive company culture

• Strong teams built through selective hiring processes

• Teams and departments have clear goals, strategically aligned with larger business goals

• Alternative working practices

• A flat, or flatter, organisational hierarchy to promote communication

• A clear vision for the business, which all employees share

• Employees who are motivated, engaged and committed to this vision

Research suggests businesses who adopt a high performance work system can see an increase in business productivity between 20% to 40%.

How to Develop a HPWS to Increase Business Productivity

To develop a HPWS you need to understand what your business goals are and what your current work systems are and how they aid those goals to assess where you can further develop a performance culture. Employees and leaders should be as involved as possible in the entire process for the best results.

Let’s take a look at the characteristics listed above to see how you can implement them in your own workplace.

A Company Culture of Learning and Continuous Improvement

Are you happy with the status quo or are you always striving towards the next development?

Many businesses fit into the former category. They assume the way things are done now is the way they should be done. This works for a time, until a more competitive company comes along that has developed further through continuous improvement. They can offer better products, at more competitive prices and a better customer experience overall.

This is why it’s vital for high performance workplaces to foster a culture of continuous improvement across the business. All teams and departments should continually be looking for ways to improve the current way of doing things, allowing the business to remain competitive and innovative in the wider market.

Continuous improvement is intrinsically linked to learning. Employees who are unable or unwilling to learn are a recipe for disaster for businesses. Learning can empower staff, teach them new skills and change their way of thinking. Ultimately, all this knowledge gets pumped back into your business, allowing you to continuously improve.

Businesses can create a company culture of learning and continuous improvement by:

• Making open, transparent communication a priority

• Investing in staff development

• Setting and measuring goals and using this information to improve future goals

• Empowering employees by implementing ideas and encouraging a sense of ownership over ideas

Strong Leadership Through Emotional Intelligence

Our current command-and-control management style wreaks havoc on business productivity, ultimately creating low performance teams and a low productivity business.

Of course, management needs a certain amount of skills to run a team such as commercial awareness, organisational skills, the ability to delegate and so on. But so much more importantly, they need emotional intelligence.

Emotional intelligence is a simple concept at its core. It’s the ability to manage and understand your own emotions and also the emotions of those around you. High emotional intelligence notice and consider the impact of their own emotions and the emotions of others. Managers who possess a high level of emotional intelligence are more likely to stay calm and navigate situations successfully, as opposed to get stressed out and make rash or impulsive decisions.

Daniel Goleman, the American psychologist who popularised emotional intelligence in business says there are five key characteristics to emotional intelligence:

• Social skills

• Self-awareness

• Self-regulation

• Empathy

• Motivation

Of course, business can encourage strong leadership with emotional intelligence by promoting those who possess the skills into leadership positions. But contrary to popular belief, emotional intelligence can be learned.

An Effective HRM Strategy Utilised to Promote a Positive Company Culture 

We’ve written extensively about how HR can be improved, but the department’s role is vital in developing a high performance work system.

For most businesses, HR departments are mostly concerned with recruitment, onboarding, training and firing. These are all important areas, but an effective HRM strategy within a high performance work system should also:

• Use effective recruitment processes to hire employees who match the company culture

• Help employees understand the expectations within their role

• Foster a culture of continuous improvement and learning

• Quality control business operations, structures and management hierarchies

• Promote open and transparent internal communications across all departments

Strong Teams Built Through Selective Hiring Processes

Every business would love it if every team they had was a high performance one. Often they pump funds into developing certain skill sets in existing teams to try and improve team performance. Sometimes this tactic works, but other times the root of the problem is a mismatch of behaviours.

Let’s use the example of a different type of team, like a football team. For this year’s Euros, both Belgium and France were the two favourites to head through to the finals. But they both went out, France in rather more spectacular fashion to a team who - on paper - shouldn’t have been able to beat them. France had great players who performed exceptionally for their clubs, but they hadn’t played together much and lacked the ability to do so when it mattered.

The point we’re getting at is no matter how strong the individual skills of one team player, if a team doesn’t know how to work together, the end result is rarely positive.

This is why it’s so important to see your hiring as a means to build your high performance teams. Skills can be taught and learned, but behaviours are a much trickier business. Businesses should use selective hiring processes like pre-employment questionnaires to recruit based on behaviours and skills, as opposed to merely the latter.

Team Goals are Strategically Aligned with Larger Business Goals

It’s so easy, especially in larger businesses, for departments to feel fractured. They each have their own goals to achieve. For example, sales have targets while IT is focused on making improvements to the site. Both are a clear business need, but where do they fit in with the overall business goals and are departments aware of how they fit in?

It’s so easy for departments to silo and forget the bigger picture. This is why it’s so important for businesses to have clear goals, but also for those goals to be aligned with departmental goals so that employees are aware of how their contributions and efforts help develop the business overall, allowing the development of a high performance workplace.

You can achieve this by using SMART goals, both for business goals and team goals. SMART goals are:

• Specific

• Measurable

• Attainable

• Relevant

• Time-bound

Often much focus for SMART goals is given towards measurability, deadlines and specificity. Relevance is an afterthought, but it shouldn’t be. The relevance of your goals towards your wider business goals is vital in creating motivated teams, dedicated to a clear purpose.

Alternative Working Practices That Suit Your Business 

It’s become clear to businesses over the past year in particular how remote working can benefit their businesses in regard to business productivity and employee morale. Remote working might be the norm now, but it goes to show that alternative working practices can have huge benefits for business productivity by creating better performing work practices.

This said, what is practical for one business is not for another. For example, high street retailers would struggle to implement remote working practices!

But businesses should continually review their work practices and discuss any new suggestions for alternative work practices with their employees. This could include:

• Remote working

• Core hours with a flexible schedule

• Compressed work weeks

• Introducing on-site facilities

• Job-sharing

• Flexible holidays

A Flattened Organisational Hierarchy That Promotes Communication 

The current top-down organisational hierarchy that most businesses follow doesn’t allow ideas, innovations and improvements to flow freely throughout the business.

This isn’t to say you should throw out all your management tomorrow as it would descend into chaos quickly! But businesses can benefit from flattening their organisational hierarchies to promote better communication.

Your business can do this by:

• Sharing information with all teams and all staff members

• Empowering teams and employees to innovate and take ownership of ideas

• Holding regular meetings between departments and senior leadership to reduce status barriers

• Decentralising decision-making

• Transforming business language and removing labels 

A Clear Business Vision Which all Employees Share 

Your business vision isn’t just your business goals. It’s your mission, your statement, your contribution to the world.

Without a clear business vision, often employees are left feeling like a job is nothing more than a set of actions with no clear purpose. To create true employee engagement, employees need this clear vision to work towards.

Of course, this starts with having a vision for your business. So if you don’t yet have one, make one. Think about the values you hold, what your mission is and what you’d ultimately like to be and write it down.

Then share it with everyone in your business. Your vision dictates the behaviours that should be encouraged and valued by all members of staff, no matter the level or role.

Motivated, Engaged and Committed Employees

All of the above should ultimately allow your business to benefit from engaged and motivated employees who are dedicated and committed to your business vision through a firm understanding of your values, goals and company culture. These are communicated through an effective HR department and emotionally intelligent leadership creating high performance work teams which contribute to a high performance work system. Ultimately, your business productivity and profitability are increased.