SOTA Review

If high performance working delivers productivity gains, why isn’t common sense common practice amongst UK firms?


Associated Themes
  • Management and Leadership

High Performance Work Systems (HPWS) can be one solution to the UK productivity problem. HPWS involve a transformation in the management of human resources. However few UK firms have HPWS. This briefing note outlines the evidence for HPWS and suggests why adoption of HPWS is low amongst UK firms. It notes that meta-studies find a strong and positive relationship between HPWS and firm productivity, and proponents offer lists of relevant human resource practices. However, barriers to the adoption of HPWS exist. First, there is no consensus on which bundle of practices is indicative of high-performance working. Second, it is not clear when any of these bundles constitute the necessary ‘system’. Third, the measures used are often very blunt and don’t always capture the necessary practices. Fourth, research doesn’t always cover all of the practices and so how they work to deliver productivity gains. Fifth, managers might not be willing and able to introduce HPWS. To overcome these problems, a consensus needs to be generated about what constitutes HPWS and more research to better understanding of how these systems work. Managers also need to be educated in the benefits of HPWS and supported in introducing them.