Far from being faddish, innovative HR can add value to an organization — when done right
There are few HR problems for which some academic or consultant hasn’t devised a system or solution. New buzzwords are coined every few months. Yet according to HR experts, few organizations can truly be characterized as being innovative or embracing high performance HR programs.
“A lot of these things are viewed as gimmicks,” said Terry Wagar, a professor of HR at Saint Mary’s University in Halifax. But there is a large and growing body of international research suggesting that on average, organizations doing high involvement HR will perform better, he said.
These HR concepts are referred to as high performance work practices, but other terms include high involvement work practices or more simply innovative HR. Examples include total quality management, job sharing, self-managing teams and job rotation.
Despite being dismissed as fads by skeptics, a growing body of evidence proves many of these practices can, when implemented correctly, improve the bottom-line.
It’s not easy to calculate precisely, since definitions are fluid and it is difficult to gauge the degree of utilization, but the research suggests that only about 12 per cent of workplaces have truly embraced high involvement work practices, said Wagar.
A search for innovative workplace practices in the government, conducted by the Canadian Policy Research Networks, found 30 per cent of workplaces were using innovative practices. “But of that so-called innovative group very few of them extended those practices to more than 50 per cent of those workers,” said Graham Lowe, one of the authors of the study, and a University of Alberta professor of sociology, specializing in work.
Three years ago, the leaders at Vancouver City Savings Credit Union decided they would have to change the way they managed employees.
By the late ’90s in the financial services industry, the big banks had shifted their focus to customer service, encroaching on the one area where credit unions could claim to have an advantage.
VanCity decided it had to meet the challenge by improving its own customer service. Doing that required ensuring all employees were fully committed and engaged, explained Donna Wilson, vice-president of HR.
Employees were surveyed and six drivers of employee engagement were identified.
“An example of a key driver for us, and it would be different for every company, is culture and values,” she said. Employees wanted to know the organization was truly going to live up to its values and stay true to its commitments. Since then they have been busy proving to employees that the values and commitments mean a great deal to the business. Even on the formal business plan, notations are made where actions demonstrate the commitment to corporate values and rewards are being given out for behaviours supporting the values.
“A lot of organizations are getting on the valued-based program and it has a bit of faddish feeling to it,” she said. But VanCity is firmly convinced that so long as it remains dedicated to the program, employee engagement will increase and improved customer satisfaction will follow.
It’s early, but the experts would likely say VanCity is one of the few organizations on the right track.
The key to success is not to look at practices in isolation as magic HR bullets that will solve people problems or improve performance. A lot of organizations are taking some innovative steps but in most cases simply introducing a single HR practice is no solution at all and does not qualify as high involvement HR, said Wagar.
“A couple of key points emerge,” said Lowe. “The first is that we really need to think about high involvement or high performance workplace practices as integrated bundles not a single practice. So while you might find a lot of organizations having some kind of employee involvement program or using teams for a substantial part of their operation, they are not doing anything else. It is the bundling that is critical.”
Aside from this, the organization has to have building its HR capacity as a key component of overall corporate strategy.
Wagar said the absence of bundling is one of the chief reasons so many organizations report failed initiatives. High involvement practices appear to be very fragile and the research suggests a death rate of about 50 per cent over a three to five year period, said Wagar. About 55 per cent of programs designed to improve work-life balance fail within three years, for example. Similarly more than 42 per cent of TQM programs fail (see chart page 2).
“If you only do one activity that is probably not enough,” said Wagar. “Processes have to be linked and flowed together.”
Many organizations talk about an improved performance management system but don’t look at how training has to be changed or rewards systems altered. Instead, responsibility for the initiative is put on the manager, but because there is no reward for doing it, when the manager gets busy it falls down the list of priorities and doesn’t get done.
It is likely this poor implementation that causes so many of these practices to fail and as a result, other organizations are reluctant to try them.
There are probably some HR professionals who feel promoting a high involvement initiative could be a career-limiting move. They may think it would be a good idea for the organization, but feel they would not get support and if the initiative fails, they look bad in front of the rest of the organization, explained Wagar.
Or else they can’t keep it going over an extended period of time due to a lack of commitment throughout the organization. An organization may begin a high involvement initiative but because the commitment isn’t complete, when sales drop or some other organizational change comes along, the program is easily dropped. To say nothing of overanxious executives who are disappointed when payoffs aren’t immediate.
Wilson is confident VanCity’s effort will be successful because the senior team recognizes the initiative will not offer any quick fixes and it is part of a five-year strategic plan. Though they first decided 18 months ago to work harder to give corporate values more meaning, it only showed up in the business plan six months ago. In other words, it took a year to clarify exactly how and where they could demonstrate the values in the plan.
“We haven’t seen a real burst in terms of customer satisfaction yet but I think that is because of time lag and I think this year we will see a real jump up,” Wilson said.
She also said responding to employee feedback is key to success. “Any HR practice that comes in that is supposed to impact and change the workplace, if it creates feedback and you don’t respond to that feedback that is why you fail,” said Wilson. VanCity is conducting quarterly “pulse checks” which will measure the effect of changes to the leadership development and recognition programs and those results will then be checked against the engagement scores.
Wagar also blamed the academic community itself for the reluctance to try HR practices that professors and researchers contend will improve corporate performance. HR practitioners know innovative practices exist, but they just aren’t sure how to implement them because much of the information about them isn’t as clear as it should be, he said. Academic work can sometimes be “muddled and in a language that practitioners can’t relate to.”
There is a better understanding of what HR practices will improve performance but still a lot more to be learned, and the findings must be presented in a practical way so the HR community can benefit from it, agreed Lowe.
“A lot of these things are viewed as gimmicks,” said Terry Wagar, a professor of HR at Saint Mary’s University in Halifax. But there is a large and growing body of international research suggesting that on average, organizations doing high involvement HR will perform better, he said.
These HR concepts are referred to as high performance work practices, but other terms include high involvement work practices or more simply innovative HR. Examples include total quality management, job sharing, self-managing teams and job rotation.
Despite being dismissed as fads by skeptics, a growing body of evidence proves many of these practices can, when implemented correctly, improve the bottom-line.
It’s not easy to calculate precisely, since definitions are fluid and it is difficult to gauge the degree of utilization, but the research suggests that only about 12 per cent of workplaces have truly embraced high involvement work practices, said Wagar.
A search for innovative workplace practices in the government, conducted by the Canadian Policy Research Networks, found 30 per cent of workplaces were using innovative practices. “But of that so-called innovative group very few of them extended those practices to more than 50 per cent of those workers,” said Graham Lowe, one of the authors of the study, and a University of Alberta professor of sociology, specializing in work.
Three years ago, the leaders at Vancouver City Savings Credit Union decided they would have to change the way they managed employees.
By the late ’90s in the financial services industry, the big banks had shifted their focus to customer service, encroaching on the one area where credit unions could claim to have an advantage.
VanCity decided it had to meet the challenge by improving its own customer service. Doing that required ensuring all employees were fully committed and engaged, explained Donna Wilson, vice-president of HR.
Employees were surveyed and six drivers of employee engagement were identified.
“An example of a key driver for us, and it would be different for every company, is culture and values,” she said. Employees wanted to know the organization was truly going to live up to its values and stay true to its commitments. Since then they have been busy proving to employees that the values and commitments mean a great deal to the business. Even on the formal business plan, notations are made where actions demonstrate the commitment to corporate values and rewards are being given out for behaviours supporting the values.
“A lot of organizations are getting on the valued-based program and it has a bit of faddish feeling to it,” she said. But VanCity is firmly convinced that so long as it remains dedicated to the program, employee engagement will increase and improved customer satisfaction will follow.
It’s early, but the experts would likely say VanCity is one of the few organizations on the right track.
The key to success is not to look at practices in isolation as magic HR bullets that will solve people problems or improve performance. A lot of organizations are taking some innovative steps but in most cases simply introducing a single HR practice is no solution at all and does not qualify as high involvement HR, said Wagar.
“A couple of key points emerge,” said Lowe. “The first is that we really need to think about high involvement or high performance workplace practices as integrated bundles not a single practice. So while you might find a lot of organizations having some kind of employee involvement program or using teams for a substantial part of their operation, they are not doing anything else. It is the bundling that is critical.”
Aside from this, the organization has to have building its HR capacity as a key component of overall corporate strategy.
Wagar said the absence of bundling is one of the chief reasons so many organizations report failed initiatives. High involvement practices appear to be very fragile and the research suggests a death rate of about 50 per cent over a three to five year period, said Wagar. About 55 per cent of programs designed to improve work-life balance fail within three years, for example. Similarly more than 42 per cent of TQM programs fail (see chart page 2).
“If you only do one activity that is probably not enough,” said Wagar. “Processes have to be linked and flowed together.”
Many organizations talk about an improved performance management system but don’t look at how training has to be changed or rewards systems altered. Instead, responsibility for the initiative is put on the manager, but because there is no reward for doing it, when the manager gets busy it falls down the list of priorities and doesn’t get done.
It is likely this poor implementation that causes so many of these practices to fail and as a result, other organizations are reluctant to try them.
There are probably some HR professionals who feel promoting a high involvement initiative could be a career-limiting move. They may think it would be a good idea for the organization, but feel they would not get support and if the initiative fails, they look bad in front of the rest of the organization, explained Wagar.
Or else they can’t keep it going over an extended period of time due to a lack of commitment throughout the organization. An organization may begin a high involvement initiative but because the commitment isn’t complete, when sales drop or some other organizational change comes along, the program is easily dropped. To say nothing of overanxious executives who are disappointed when payoffs aren’t immediate.
Wilson is confident VanCity’s effort will be successful because the senior team recognizes the initiative will not offer any quick fixes and it is part of a five-year strategic plan. Though they first decided 18 months ago to work harder to give corporate values more meaning, it only showed up in the business plan six months ago. In other words, it took a year to clarify exactly how and where they could demonstrate the values in the plan.
“We haven’t seen a real burst in terms of customer satisfaction yet but I think that is because of time lag and I think this year we will see a real jump up,” Wilson said.
She also said responding to employee feedback is key to success. “Any HR practice that comes in that is supposed to impact and change the workplace, if it creates feedback and you don’t respond to that feedback that is why you fail,” said Wilson. VanCity is conducting quarterly “pulse checks” which will measure the effect of changes to the leadership development and recognition programs and those results will then be checked against the engagement scores.
Wagar also blamed the academic community itself for the reluctance to try HR practices that professors and researchers contend will improve corporate performance. HR practitioners know innovative practices exist, but they just aren’t sure how to implement them because much of the information about them isn’t as clear as it should be, he said. Academic work can sometimes be “muddled and in a language that practitioners can’t relate to.”
There is a better understanding of what HR practices will improve performance but still a lot more to be learned, and the findings must be presented in a practical way so the HR community can benefit from it, agreed Lowe.
