High Performance Work Systems

The Digital Experience

David A. Buchanan, James McCalman

• Publisher: Taylor & Francis
• Year: 2018
• eBook ISBN: 9781351257787
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Originally published in 1989. Management styles in developed western countries are undergoing a crisis phase. Increased levels of international competition and volatile trading conditions are creating new demands of job skills and responsibilities. The management challenge is to find work organization and employment strategies that sustain and develop employee performance and commitment.

This book analyses the 'high performance work systems' that a number of American and European companies have evolved to meet this challenge. It particular, it describes in detail the experiences of Digital Equipment Corporation (DEC) at their UK manufacturing plant. This study not only illustrates the benefits of new forms of work organization, it also explores some important myths, notably that technical and organizational changes can produce 'effortless excellence'. It also provides practical management guidelines for the effective application of high performance work design.

Part 1
Back to the future

In Part 1, we examine the contemporary revival of interest in work design theory and strategy. The history of high performance is traced through the work of the Tavistock Institute in London in the 1960s, the ‘quality of working life movement’ in Europe and America in the ‘70s, and the more recent work in America of Peter Vaill, Barbara Perry, Richard Walton and Edward Lawler in the 1980s.

This account shows how high performance has developed out of earlier techniques and thinking. But perhaps more important, this analysis reveals that the pressures behind the renewed popularity of work design are quite different from those which first stimulated interest in this area over twenty years ago. These pressures explain the increased organizational scope and impact of the new approach. The account of Digital Equipment Corporation’s experience with high performance work systems is thus set in this wider contemporary and historical context.

Part 1 has two main arguments:

First, trends in world product markets are encouraging more companies to review their organizational designs, management styles, and employment policies in the interests of more effective asset utilization, manufacturing flexibility, and product quality and reliability. High performance work design concepts are thus seen as valuable for strategic reasons. The problems that first encouraged the growth of the ‘quality of working life movement’ in the 1960s and 1970s were operational. High performance must be regarded as a source of competitive advantage, enhancing flexibility and allowing organizations to operate effectively in a changing world. It is not merely a way of reducing the costs of absenteeism and turnover as job enrichment was traditionally viewed.

Second, Digital is not the only American multinational to apply this approach. Numerous organizations, in other sectors, are adopting high performance work organization strategies. These companies are setting standards in organizational design, working conditions, management style and employment practice which other organizations may also have to adopt in order to remain competitive.

Chapter 1

Buried in the 1970s

Have you noticed that the best run companies all seem to be managed unconventionally? Every time they are written up or profiled in a business magazine, their success is attributed to breaking the rules, not following them, for encouraging employee, departmental, and divisional independence, not stifling it; for bursting through the conventional wisdom, not perpetuating it.

Manage unconventionally. Don’t just look for opportunities to do the unexpected. Create them. Aggressively pursue change. Make managing an active verb.

Mark H. McCormack, What They Don’t Teach You At Harvard Business School, Fontana/Collins, 1984, p. 183.

To work smarter

How will organizations be designed and managed in the 1990s to maintain high levels of performance and sustain competitive advantage? The pressures facing organizations over the coming decade are materially different from those of the previous twenty years. The management strategies that will have to be developed to confront these new pressures are correspondingly different from conventional approaches. This book illustrates the ‘high performance’ answer to these questions through the experience of a number of ‘leading edge’ organizations around the world, and in particular through a detailed analysis of the experience of Digital Equipment Corporation in Scotland.

How does a more or less traditionally managed organization accomplish the transition to high performance?

Many sound prescriptions for improving organizational health either omit or gloss over the typically traumatic process of swallowing the medicine. This book exposes the nature of the often painful transition process and offers a theory of perpetual transition management to generate practical guidelines for the effective implementation of long range, large scale organizational change. Change is a permanent feature of the industrial landscape. But changes to organization structures, systems, and technologies, can only be effective if on the one hand they are appropriate and fit the context, and if on the other hand the people who have to work through and with the new context believe, accept, and are committed to it.

Perpetual transition theory suggests that four interlocking management processes must take place both to implement and sustain major organizational changes. These processes, in summary, operate on four layers:

1. The Trigger layer Concerns the process of identifying the needs and occasions for major change, typically expressed in the form of opportunities, threats, and crises.
2. The Vision layer Concerns the process of defining the future, or articulating and communicating effectively an appropriate and challenging version of ‘how things should be’.
3. The Conversion layer Concerns the process of mobilising support in the organization for the articulated Vision as an appropriate way of dealing with identified Triggers.
4. The Maintenance and Renewal layer Concerns the process of sustaining and enhancing changes in attitudes, values, beliefs and behaviours, and of avoiding regression to tradition.

This theory helps to identify why change in some organizations is highly successful, why problems arise and how to resolve them, and why some change programmes founder. Many change attempts, for example, begin with conversion processes - selling the idea of change - in the absence of clear triggers or a well articulated vision of the desired future. In the Digital experience at Ayr, in Scotland, the trigger, vision and conversion processes were carried out systematically and visibly. Management realised in 1987, however, that insufficient attention had been devoted to maintenance and renewal, that conventional management practices had again been adopted, and that a process of reaffirmation was required to sustain the appropriate management attitudes and behaviours. This theory and its practical implications will be explored again in Part 3.

On his return from a study tour in Japan in 1982, Jim Donovan, Personnel Director of Thorn EMI Ferguson said, ‘If the Delegation came back with one single message it would be that competing in design technology and production technology with the Japanese is not enough. To survive in the long term we must compete in the field of employee commitment’ (Taylor, 1983, p.13). The delegates discovered that the Japanese do not work harder; they work smarter. This is not an argument for copying Japanese management practice but an indication of the need for British, American, and European management to evolve culturally appropriate solutions to organizational problems.

Human resource management is thus a key asset in competitive strategy for the 1990s, and a number of companies have now translated this concern into effective action. It is becoming increasingly recognized that people in organizations are assets, not factors of production, and have to be managed as knowledge workers, not shop floor operators. The management challenge is to develop work organization, employment strategies, and management styles that sustain and develop employee performance and commitment in the new competitive environment.

This book is about the management of change - one of the most vital sets of management skills raising some of the most critical organizational issues of the late 1980s and the 1990s. Organizational solutions, in practice, are inevitably tied to management perceptions of the nature and seriousness of the problems being addressed. Put crudely, big problems attract high levels of management attention and generate big solutions. This book aims to identify the emerging problems in the management of change, and to document the solutions that are now being developed and applied. At the heart of these solutions lie new approaches to the organization and management of work. This is a global trend, supported by contemporary theories of competitive strategy in manufacturing, illustrated and reinforced by the evolving management practices of organizations around the world.

There has been a revival of interest in work organization strategies in the latter half of the 1980s, due to pressures more intense and different from those that created the ‘quality of working life’ movement in the 1960s. Work design techniques were then seen as antidotes to scientific management and the problems of labour turnover and absenteeism. There was also a widespread belief in the 1970s that improving the quality of work experience was appropriate for an affluent, educated, industrial society. That belief waned in the face of a deteriorating world economic climate and locally high unemployment, and was never popular with managers.

Contemporary interest in work organization rests not on operational and moral concerns but on technological and strategic problems. Management attention is now focused on how to achieve speed and flexibility of response to changing markets, how to ensure effective use of sophisticated and expensive technologies, how to meet rising customer expectations of quality, reliability, and delivery. These issues have triggered the shift from ‘personnel administration’ to ‘human resource management’. And as the problems have become more serious, the boundaries of what management once considered acceptable change to work organization have become significantly wider. Big problems legitimate, in managerial terms, organizational changes of wider scope - and this is one dimension on which current applications of work organization strategies differ from traditional approaches.

This book has four aims.

1. To identify the reasons behind the revival of interest in work organization in the late 1980s.
2. To illustrate developments in contemporary practice through brief accounts of applications of high performance systems in a number of companies, and through a detailed account of how this approach was adopted at the manufacturing plant of the Digital Equipment Corporation near Ayr in Scotland.
3. To explore the implications of this study for the management process of implementing large scale, long-term technical and organizational changes, and for currently popular management theories of ‘effortless excellence’ which appear greatly oversimplified in the light of the Digital experience.
4. To identify from experience practical management guidelines for the effective application of high performance work design.

Part 1 traces the roots of contemporary approaches in the theory and management practice of the past two decades, identifying the new pressures which have triggered renewed interest in work reorganization as a central component of strategic human resource management.

Part 2 is an account of the major changes to products and organizational design at the Ayr manufacturing plant of Digital Equipment Scotland, one of two production facilities of the Digital Equipment Corporation in Britain. The account covers the period from 1976, when the plant opened, to 1987, focusing on the last five years.

The account begins with an introduction to the company and to its operations in Europe and Scotland. The company’s ‘achievement culture’ is then described, and the old and new production processes are compared. Management aspirations in adopting high performance are analysed, and process of managing change is examined. The study describes changes to organization structure, the introduction of high performance work groups, and the consequences of these changes for managers, shop floor workers, and for the performance of the business.

The wider relevance of Digital’s experience is assessed in Part 3. This is not, however, just another descriptive account of company success, an ‘excellent’ corporation, without offering practical guidance. The Digital experience is used here to explore key aspects of management theory and practice.

The evidence exposes issues in the management of large scale, long-term technical and organizational change not raised by conventional socio-technical systems theory, but consistent with, for example, Pettigrew’s (1985;1987) approach which emphasizes the importance of the context and timing of change as well as the content. A number of critical issues in relation to the process of change are explored, and a ‘perpetual transition management’ model of organizational change is developed.

The Digital story also dispels the myth of ‘effortless excellence’, which recent analyses of management practice have popularized. Large scale organizational change requires considerable effort or, in the words of Digital management, ‘pain’. The pain is an aspect of the parallel processes of attitude change and the development of self understanding. The rewards are measured in terms of the survival and growth of the organization, and also in terms of the significant emotional and intellectual development of the individual. Growth and pain are missing elements in the literature of organizational change.

The final chapter identifies specific management lessons from this experience, for the application of high performance in particular, and for the management of large scale organizational change in general. The wider relevance of these conclusions is assessed, indicating that this approach is not in any way limited to the electronics sector.

Although the book presents Digital in a positive light, working at the ‘leading edge’ of organizational (as well as technological) innovation, the high performance approach is not a panacea for all contexts. Digital is a highly successful and profitable multinational organization, trading in highly volatile product markets, and without the need to negotiate changes to work design and employment policies with trade unions. Organizations facing different market and industrial relations issues have to adapt high performance concepts to their own context, and these aspects are also explored.

The argument of this book is supported by a range of published commentary and experience. But the core is based on the experience of one company. This approach has both limitations and strengths as a basis for identifying both theoretical arguments and practical lessons. The main limitation concerns the extent to which general arguments can be drawn from the experience of one organization. And this particular organization, although important in global terms in its own industry, has features that render it far from typical of British, European, or American organizations in this or indeed other sectors of industry.

The three significant advantages of this approach concern the richness of ethnographic, idiographic data, the context bound nature of the experience, and the way in which the untypical organization represents and graphically illustrates wider trends. A number of commentators have recently advocated the need for this approach in this field (Barley, 1986; Lawler, 1986). Child and Smith (1987, p.565) argue the case for ‘fine-grained case studies’ of organizational change.

Many contemporary accounts are limited by their superficial coverage of large numbers of organizations. This breadth of coverage inevitably means that inadequate attention is paid to the historical context and contemporary idiosyncracies of organizational arrangements and management perceptions. This study is an example of, and supports, the trend towards idiographic organizational studies in which historical and contextual factors are seen as important in explaining the nature and direction of management action and its consequences.

The Digital experience offers a rich and fascinating account of organizational change, illustrated by the words of those directly involved. While the transition to high performance is painful, working life in the high performance organization is exposed as rewarding and satisfying, as a model for others to consider, and as a ‘high effort, high reward’ process for the management team. The ethnographic ‘depth’ of such an account takes the reader to the story behind the gloss of ‘effortless excellence’, based on the application of, say, seven or eight simple guidelines for...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication Page
• Contents
• Foreword by Laurence V.C. Megson
• Acknowledgements
• Part 1 Back to the future
• Part 2 The Digital experience
• Part 3 The wider relevance
• Appendix: Research methods
• Bibliography
• Index