By Umer Raza Bhutta
A recipe for sustainable organization performance
To sustain a level of performance may be easy for an individual, but when it comes to the organizational level, this is marred by parameters and stained by obstacles. When an individual does not perform consistently it may be called moody. At the same time long spell of poor performance by an individual may result in the extinction from the company. But when a company does so it may have no grounds to be called moody, but only extinction from the business scene can be on the cards.
Sustainable organization performance refers to the maintenance of an organization’s high performance levels in respect of financial indicators, people management, environmental and societal contribution over a long period of time. Successful organizations sustain their performance in the face of both internal and external challenges over time, rather than simply achieving high performance levels over the short-term or during good economic periods.
This sustained performance is achieved primarily by two defining factors
- High-performance working practices
- High-performing individuals.
Organizations that want to sustain a high performance takes both of these issues to the next stage to identify how individual performance and effort is directed within a facilitative environment to enable its translation into performance and growth that could be sustained over the long term.
High performance working practices
Much of the initial research on high performance work practices was carried out during the last couple of decades, stressing the importance of effective people management and development practices. Main focus of all the development work at the management research level was to identify the kind of work environment that drives organizational performance.
In a report “High performance work practices” conducted by CIPD (chartered institute of Personnel and Development UK) three conditions were identified for high performance:
- High employee involvement: The organizations having a high level of employee participation and involvement in company matters seen having a consistent level of high performance. Such participation can be made possible through self-directed teams, quality circles and sharing/access to company information. Such practices also help the companies to retain its best performers and to maintain a consistent level of policies, procedures and customer support that is essential for business growth.
- HR practices: HR practices have remained a corner stone to any such consistency in performance. Such practices include sophisticated recruitment processes, performance appraisals, work redesign and mentoring, training and development initiatives, change management processes and fair labor practices.
- Reward and commitment practices: including specific types of financial rewards (such as profit-sharing), family-friendly policies, job rotation and flexible working hours or days
The research points out that, while many of the individual practices identified are not new, it is rather the systematic deployment of such practices that is significant when aiming to sustain high performance in the long term. Work on high performing individuals has provided evidence that well-designed HR policies and strategies result in higher levels of organization performance through developing able and motivated individuals and giving them the opportunity to perform at high levels. These policies and procedures could be crafted by anyone who understands the needs of human resources in the company and through these the needs of the organization in the larger context. This understanding can be developed through providing opportunities to the employees to engage with the processes of the organization.
Drivers of sustainable organization performance
Repeated review and discussion on drivers of sustainable organization performance leads us to focus on three main themes 1) leadership 2) engagement 3) organization development. An intelligent maneuvering of these themes create and sustain the high organizational performance.
Within the theme of leadership the following are the key enablers of sustainable organization performance:
- line managers who support and help employees through change
- senior leadership role-modelling and empowering others
- a vision and values that are perceived as valid by all and for all.
Key enablers within the theme of employee engagement are
- an organization purpose with which employees are engaged
- line managers with a motivating and engaging management style that is aligned to the needs of the team.
Within the organization development theme, we have three key enablers:
- sharing knowledge and learning across functions and departments
- an organization design that breaks down barriers and has the flexibility to meet short- and long-term needs
- in terms of people management, alignment between individual and organization objectives as well as clarity around career opportunities.
After the above broader categorization of the Themes for sustainable performance following, if used properly, also play their role.
- HR and Organizational Alignment – consistency or integration between the values or objectives of different stakeholders and with business or organizational strategy
- Shared Organizational Purpose – an organizational purpose that is shared by employees and often beyond, to include external stakeholders
- Engagement levels– the awareness that people can be engaged at difference levels and with various aspects of the organization or the work
- Assessment and Evaluation – the processes that occur at different organizational levels to gather qualitative and quantitative information in order to assess the impact of actions and to inform decision-making
- Balancing short- and long-term goals and objectives: awareness, management and communication of organizational issues and pressures affecting the short term (less than a one-year timeframe) while maintaining an active focus on longer-term priorities (more than a one-year timeframe)
- Agility – the capacity to remain open to new directions and approaches
- Capability-building – equipping employees, teams and organizations with the skills and knowledge they need to meet both present and future challenges.
Role of HR in building sustainable organization performance:
The HR function needs to clearly understand the business to ensure that HR strategy and policies contribute to the overall business strategy and are appropriate for the organization’s unique context. In addition, HR has a role as organization guardian and commentator on how decisions or behavior could support or undermine the long-term interests of the organization, challenging senior executives where necessary.
We have seen successful organizations sustaining their performance over time and maintaining a long-term focus when making business decisions. Given the current economic scenarios, the need to take short-term decisions that are placed firmly within the context of long-term strategy and goals has become more important than ever. To achieve sustainable organization performance, there should be integration and co-ordination between employee’s behavior and the organization’s long-term values. Research has shown that employee engagement is a driver of long-term performance, but at the same time it is important to identify what employees are engaged with. This is the role of HR to identify and manage the employee engagement initiatives and processes so that these are firmly tuned in with the organization’s objectives. For engagement to support sustainable performance, objectives at all levels need to be aligned with the organization’s strategic priorities. There is a need for organizations to consider factors that are affecting their long-term performance, minimizing the blockers and maximizing the enablers. Through empowering people at all levels of the organization to innovate, to embrace change and to identify with the organization’s purpose, a focus on sustaining high levels of performance in the long term can be achieved.
Books and reports
BEER, M. (2009) High commitment, high performance: how to build a resilient organization for sustained advantage. San Francisco, CA: Jossey Bass.
HOLBECHE, L. (2005) The high performance organization: creating dynamic stability and sustainable success. Oxford: Elsevier Butterworth-Heinemann.
ROBINSON, I. (2006) Human resource management in organizations: the theory and practice of high performance. London: Chartered Institute of Personnel and Development.
WORK FOUNDATION. (2005) People, strategy and performance: results from the second work and enterprise business survey. Employment relations research series. London: Department of Trade and Industry.
BOXALL, P. and MACKY, K.A. (2007) High-performance work systems and organizational performance: bridging theory and practice. Asia Pacific Journal of Human Resources. Vol 45, No 3, December. pp261-270.
PORTER, M.E. and KRAMER, M.R. (2011) Creating shared value. Harvard Business Review. Vol 89, Nos 1/2, January/February. pp62-77.
THOMPSON, M. and HERON, P. (2005) Management capability and high performance work organization. International Journal of Human Resource Management. Vol 16, No 6, June. pp1029-1048.