5. Are high performance work systems (HPWS) good for business and employment relations?

HRM practices may interfere with this goal by focusing on routines and rules that do not provide an environment conducive for stimulating innovation . Furthermore organisations that are structured to deal with stable routing tasks are less able to adapt to uncertain , dynamic environments

Many organisations today face complex environments . Firms ' management strategies must adjust and conform to the existing business environment The present business environment demands that firms respond to change and , at the same time , promote efficiency . Thus firms that can combine effectiveness and flexibility objectives may be put in

the optimal strategic position whether they are pursuing objectives of innovation or market performance (Lawler , 1986

More extensive use of High Performance work systems with HRM effectiveness is positively associated with organisational innovation The banking industry for example has become a highly competitive environment because of banking industry deregulation . The regulatory changes coincide with such technological advances as telephone banking ATMS , pc-based banking and information system advances . The industry responded to the changes by a significant wave of consolidation that has reduced the number of banks . Regulations essentially prevented firms from implementing the full range of strategic choices . Deregulation frees financial institutions to exercise strategic choice . Since deregulation , many banks have introduced new products and services that do not fit the traditional margin-maximing scheme where margin is the difference between the loan rate and the deposit rate . Instead fee income such as origination fees from corporate cash management accounts home mortgages and letter of credit have become an increasing important source of bank revenues . Hence , the proportion of by these alternative fee based products and services represents an important measure of banking innovation (Pfeffer , 1994

HPWS universally benefit all employers . High investments in training and employees pay off in terms of employee commitment and work effort However , these HPWS...