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The Centre for Labour Market Studies Improving the knowledge and skills of employees: the The Centre for Labour Market Studies Improving the knowledge and skills of employees: the use of High Performance Working Practices Professor David Ashton

The Centre for Labour Market Studies The growth of the knowledge economy Growth of The Centre for Labour Market Studies The growth of the knowledge economy Growth of professional, technical and managerial workers in developed and developing economies Changes in the terms of international competition and the use of HPWPs across all economies

The Centre for Labour Market Studies What are HPWPs and HPWOs? Core features n The Centre for Labour Market Studies What are HPWPs and HPWOs? Core features n n Customer focus Flat structures, self-managed work teams, team working, shared information Multi-skilling, job rotation, strong support for learning Performance related pay, appraisals, equalisation of status Improvements in performance greatest when HPWPs combined with improvements in production (e. g. lean production) and ICT.

The Centre for Labour Market Studies Why are they important? Business benefits: improved profits, The Centre for Labour Market Studies Why are they important? Business benefits: improved profits, productivity, more responsive to customer demands National benefits: improves national competitiveness, higher economic growth Employee benefits: more job satisfaction, job security, higher pay

The Centre for Labour Market Studies Why are they important now? n n Provide The Centre for Labour Market Studies Why are they important now? n n Provide competitive advantage in global markets Spread of Multi-National Companies (MNCs) as exemplars, introducing them to developing economies n New forms of ICT facilitating spread of new practices n Responsible for raising competition to new levels

The Centre for Labour Market Studies Are these practices effective in all parts of The Centre for Labour Market Studies Are these practices effective in all parts of the economy? n n n Most widely applicable in knowledge-intensive industries where competitive advantage derived from employees’ skills base Also effective in improving performance of some companies in more labour-intensive industries, e. g. retail, hospitality Equally applicable to small and medium-sized companies

The Centre for Labour Market Studies How do companies become HPWOs? n n n The Centre for Labour Market Studies How do companies become HPWOs? n n n Requires strong leadership Most effective when applied across the whole organisation rather than when confined to specific departments Often a response to crisis in market performance and pressure from competitors n Requires medium to long-term change - not a quick fix n Requires commitment from employees

The Centre for Labour Market Studies What are the barriers to their introduction? Complacency The Centre for Labour Market Studies What are the barriers to their introduction? Complacency - why bother to change? Lack of knowledge about how to initiate the process Lack of the skills and commitment required to undertake sustained organisational change Resistance from middle management Distrust between management and employees

The Centre for Labour Market Studies What are the outcomes we can expect? Positive The Centre for Labour Market Studies What are the outcomes we can expect? Positive n n n Enhanced profits and productivity Better, more highly skilled and challenging jobs Higher levels of employee satisfaction Negative - Is it a better way to get employees to work harder? n n Higher levels of stress? Problems of work-life balance Only works effectively where there is trust and there are gains for all.

The Centre for Labour Market Studies What can governments do to help? Use of The Centre for Labour Market Studies What can governments do to help? Use of dedicated programmes Finland - central programme to accumulate knowledge on the implementation of HPWPs. n Singapore - series of programmes to target different aspects of HPWO, e. g. HR, business processes, innovation n

The Centre for Labour Market Studies What can governments do to help? Indirect measures The Centre for Labour Market Studies What can governments do to help? Indirect measures n Raise awareness - e. g. UK n Use of leading employers to cascade practices down the sector/industry - e. g. Singapore n Use of regulations and procurement practices - e. g. UK n Use of the public sector as exemplars - e. g. USA n Use of VET system to deliver skills required for new practices - e. g. Netherlands

The Centre for Labour Market Studies What skill sets do policy makers require for The Centre for Labour Market Studies What skill sets do policy makers require for effective interventions in this area? n Understanding of the links between skills and business strategy n Knowledge of skills as a derived demand n Awareness of the range of levers available to governments to impact on employers’ product market strategies n Awareness of the limitations of supply side approaches