HIGH-PERFORMANCE WORK SYSTEMS: New evidence that public sector employers benefit but not their employees

15 Apr 2019

High-performance work systems (HPWS) are strongly associated with improved performance and greater innovation in public sector workplaces. But they offer no benefits for public sector employees, according to new research to be presented at the Royal Economic Society's annual conference at the University of Warwick in April 2019.

 

The study, which is based on nationally representative surveys of workplaces and their employees in 2004 and 2011, reveals that public sector workplaces benefit from better performance and are more innovative in terms of the changes they make to their services, where they invest more heavily in HPWS.

 

One mechanism by which these improvements may arise is via the effects of HPWS on employee attitudes, in particular their commitment to the organisation, satisfaction with their work, trust in management and contentment with their working environment. But this proved not to be the case: there were no significant associations between HPWS and positive employee attitudes to their work.

 

These findings for the public sector contrast with previous studies of the private sector, which indicate that both employers and employees benefit from intensive use of HWPS – what has been referred to as ‘mutual gains’.

 

Alex Bryson, Professor of Quantitative Social Science in the Department of Social Science at University College London, and co-author of the report, comments:

 

‘One can see why public sector management has invested in HPWS development, as these systems appear positively related to the outcomes on which management is judged, and are also linked positively with the change agenda.’

 

‘It is less apparent from this research what public sector employees have gained from HPWS.’

 

Notes for editors:

 

The study ‘High Performance Work Systems in the Public Sector: Can They Work?’ uses the Workplace Employment Relations Surveys 2004 and 2011. These are nationally representative surveys of employees and workplaces where there are at least five employees. The analyses are confined to those workplaces with 50 or more employees. For more information on the surveys, go to: http://www.wers2011.info/

 

The workplace performance measure is based on managerial responses to three questions: ‘Compared to other workplaces in the same industry how would you assess your workplace’s… financial performance, labour productivity, quality of product or service?’ Each is scored on a scale running from ‘a lot below average’ to ‘a lot above average’. The scales are collapsed into an additive (0,9) scale where 9 identifies the best performers.

 

The workplace innovation measure counts the number of changes in the last two years reported by the manager from a list of eight types of change in 2004; this was reduced to seven types in 2011. The 2004 survey question ranges over technical innovation (computers, other technical developments, technically new services), organisational change, changes in work techniques and procedures, changes in working time, changes in performance pay, and changes in staff involvement. The result was a 9-point scale ranging 0-8 (reduced to 0-7 in 2011, when specific reference to computers was omitted).

 

The authors derive mean employee attitudes by workplace from questionnaires completed shortly after the main management interview. The measures are: a three-item scale on organisational commitment; intrinsic job satisfaction, formed by summing four items; trust in management, formed by summing five items that rate management’s goodwill toward employees; and wellbeing at work, formed by summing six items on job-related contentment and enthusiasm. All four variables were computed as means over the employee respondents at each workplace.

 

The items used to construct the HPWS measure are presented in the table

 

Items used in construction of HPWS measures

Domain name

2004

Participation

Meeting time; briefing time; subjects discussed in meetings (organisation, production, staffing, finance, planning, pay); consultative committee set up; attitude surveys used; changes made with employee involvement.

Team-working

Proportion in teams; task rotation within teams; teams have inter-dependence, responsibility, autonomy,; team chooses their leader; quality circles used.

Development

‘Investor in People’ standard achieved ; development included in firm strategy; proportion given off-job training; proportion given cross-job training; variety of training courses used; induction courses used; team training; training discussed in briefing groups; appraisal for non-managers.

Selection

Selection criteria: qualifications, skills, references, motivation, experience; use personality tests; use skill tests.

Incentives

Bonus for individual, group/team, workplace, organisation performance; profit-sharing for non-managers; merit-based or performance pay; appraisals that affect pay differentials; incentives that affect pay differentials.

 

2011

Participation

Meetings are regular; meeting frequency; staff time in meetings; briefing frequency; staff time in briefings; subjects discussed in meetings (staffing, finance, investment); consultative committee; attitude surveys.

Team-working

 

Proportion in teams; training for team-working; teams have inter-dependence, responsibility, autonomy; quality circles used.

Development

‘Investor in People’ standard achieved ; development included in firm strategy; proportion given workplace training; proportion given off-job training; proportion given cross-job training; variety of training courses used; induction courses used; appraisal for managers; appraisal for all non-managers; employee development is part of workplace strategy; vacancies filled internally if possible.

Selection

Selection criteria: qualifications, skills, references, motivation, experience; use personality tests for manager jobs; use personality tests for non-manager jobs; use skill tests for manager jobs; use skill tests for non-manager jobs.

Incentives

Bonus for individual, group/team, workplace, organisation performance; profit-sharing for non-managers; merit-based or performance pay; appraisals that affect pay differentials; incentives that affect pay differentials.

 

The researchers acknowledge the Department for Business, Energy and Industrial Strategy, the Economic and Social Research Council, the Advisory, Conciliation and Arbitration Service and the National Institute of Economic and Social Research as the originators of the Workplace Employee Relations Survey data, and the Data Archive at the University of Essex as the distributor of the data. All errors and omissions remain the sole responsibility of the authors.