A rapidly changing economic environment, characterized by such phenomena as the globalization and deregulation of markets, changing customer and investor demands, and an increasing product-market competition, has become the norm for most organizations. To compete in this new environment, a continual performance improvement through reducing costs, innovating products and processes, and improving quality, productivity and speed to market is essential.1
Concerning these required quality improvements, in recent years, a new approach to management, particularly coming from the Anglophone countries like the United States, in which organizations compete on quality rather than cost, and rely on human resource development to do so, could be detected.
This new approach focuses on the involvement of employees in the decision making process and on using a certain combination or bundle of progressive management practices, which raise welfare to workers (for example training, appraisal, profit-sharing and high compensation systems).This approach has been conceptualised variously as “best practice” human resource management (HRM), “high performance work systems”, “high commitment” HRM or “high involvement” management. Whatever the terminology, the idea is that a particular set of HR practices has the potential to bring out improved organizational performance.
In the following, I will explain more in detail the list of high commitment HR practices outlined by Pfeffer (1998) and at the same time apply those practices on a real world situation. In order to provide a more realistic illustration of this new approach, I had the possibility to obtain information from and co-operate with the HR department of Oracle Austria, the Austrian subsidy of the American database software corporation, which pursues the strategy of adding value through appreciation (“Wertschöpfung durch Wertschätzung”) and thus, represents a typical example of what the theory calls a “high performance work system”.
Additionally, I will theoretically explain the connection between this new approach and the desired outcome, the improvement of the organization’s overall performance.
Table of Contents
1. Introduction
2. Components of “high performance” HR practices
2.1 Employment Security and Internal Labour Markets
2.2 Selective hiring and sophisticated selection
2.3 Extensive training, learning and development
2.4 Employee involvement, information sharing, worker invoice and open communication channels
2.5 Self-managed teams / team-working
2.6 High compensation contingent on performance
2.7 Reduction of status differences / harmonisation
3. Finding the best combination of HR Practices – a HR practice Bundle
4. The Impact of High-commitment HR practices on performance
5. Conclusion
Objectives and Topics
This case study examines the implementation and effectiveness of "high performance" or "high commitment" human resource management (HRM) practices within the context of Oracle Austria. It aims to demonstrate how specific bundles of HR practices, when aligned with organizational strategy, enhance employee engagement and contribute to overall company success.
- Theoretical frameworks of "high performance" HR systems
- Core components of HR practice bundles including training, selection, and involvement
- The role of organizational culture and open communication in employee commitment
- The link between HR practices and organizational performance
- Practical application and case study analysis of Oracle Austria
Excerpt from the Book
Selective hiring and sophisticated selection
An effective hiring and recruiting process is the first step in achieving competitive advantage concerning efficient employment. Vance Kearney, Vice President of Oracle HR EMEA states the following: “Product can be copied, but the people can’t. The key to success is having fabulous people in a business.”
Employers always want to recruit the best people available and therefore use sophisticated selection techniques in the recruitment process, such as psychometric tests, structured interviews and work sampling, which all are methods that are likely to increase the validity and quality of selection decisions. Typical recruiting at Oracle consist of a well-devised selection process involving various steps such as online application, first hearing, in-depth interview, assessment centres (X-lob hearings) and the resolving of business cases.
Concerning the criteria influencing the recruitment decision, HR managers might consider social, interpersonal and team-working skills more important than the possession of specific knowledge. Furthermore, the selection process can be influenced by the possession of certain competencies such as trainability, flexibility, commitment, drive and persistence, and initiative.
The HR Management of Oracle Austria, states that the crucial point in the selection process is the overall picture of the applicant, consisting in so-called “soft-skills” (such as social and interpersonal skills, personality) and specific skills, which especially play a crucial role in a technical environment.
Summary of Chapters
Introduction: Provides the economic context for modern HRM, introducing the transition toward "high performance work systems" that focus on employee involvement and progressive practices.
Components of “high performance” HR practices: Details specific management techniques such as employment security, selective hiring, extensive training, and team-working as pillars for fostering commitment.
Finding the best combination of HR Practices – a HR practice Bundle: Argues that HR practices are most effective when implemented as a coherent bundle rather than in isolation, supporting a strong organizational culture.
The Impact of High-commitment HR practices on performance: Explores the theoretical link between HR outcomes (such as competence and flexibility) and financial performance, suggesting a "win-win" scenario for both the firm and employees.
Conclusion: Synthesizes the findings, noting that while high-commitment strategies require significant effort and resources, they lead to higher employee satisfaction and contribute to organizational objectives.
Keywords
Human Resource Management, High Commitment, High Performance Work Systems, Oracle Austria, Employee Involvement, Organizational Performance, Recruitment, Team-working, Performance Appraisal, Compensation, Strategic HRM, Corporate Culture, Employee Training, Talent Management
Frequently Asked Questions
What is the core focus of this study?
The work explores how "high performance" or "high commitment" HRM practices are implemented in modern organizations to achieve competitive advantages and improved performance.
Which central topics are addressed in the book?
Key topics include employee selection, training and development, internal labor markets, team-working, compensation systems, and the strategic importance of bundling these HR practices.
What is the primary objective of this research?
The goal is to analyze the theoretical framework of high-commitment HRM and illustrate its application through a real-world case study of Oracle Austria.
Which methodology is applied?
The author uses a qualitative approach, combining literature review on high-performance HR systems with empirical evidence and internal data provided by the HR department of Oracle Austria.
What does the main body of the text cover?
It covers the specific components of high-commitment HR practices and examines the synergistic effects of combining these practices into a comprehensive bundle to drive organizational success.
Which keywords best characterize this publication?
Key terms include Strategic HRM, High Performance Work Systems, Organizational Commitment, Employee Involvement, and Competitive Advantage.
How does Oracle Austria approach hiring?
Oracle utilizes a sophisticated selection process that prioritizes "soft-skills" like social and interpersonal capabilities over specific technical knowledge, aiming to find candidates who fit the company's egalitarian culture.
What is the "What’s Up" meeting at Oracle?
It is a monthly internal meeting held in a relaxing, non-work environment designed to keep all employees informed about the company's financial status, strategic objectives, and internal changes.
- Quote paper
- Theresa Sturm (Author), 2007, High Commitment HRM organizations - a case study, Munich, GRIN Verlag, https://www.grin.com/document/85951
