Understanding the People and Performance Link
Unlocking the black box
Published: May 2003
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DescriptionThis report, one of the most in-depth of its kind, confirms the powerful relationships between HR practices, employee commitment and operating performance. It is based on a three-year investigation which looked at the HR practices, staff views and performance in 11 large organisations including Jaguar Cars, Nationwide Building Society, Selfridges and Tesco. The study provides answers to why and how people management practices influence business performance - to unlock what has been termed the 'black box'. Key conclusions include:
- the most carefully thought-through HR strategy is a waste of time unless it is embraced by line managers who have the skills and understanding necessary to engage and motivate employees
- where effective HR practices are not in place, levels of employee commitment are up to 90 per cent lower
- an organisation needs a clear direction and purpose, beyond the bland mission statement or generic goal of financial returns, which engages, enthuses and unites people. At the Nationwide Building Society this is a commitment to mutuality. At Royal United Hospital Bath it is saving lives. This 'big idea' appears essential in motivating and directing people behind the strategy of the organisation.
ContentsHow Can We Explain the Connection Between People Management and Performance?
The Big Idea: Integrating HR Strategy and Practice with the Business
Bringing Policies to Life: The Critical Role of Line Managers
The HR-Performance Link
The Effects of HR Policies
The Implications for HR Policy and Practice
Produced as part of a major five-year CIPD programme of work investigating the link between the way in which people are managed and business performance. The research team for this report were and John Purcell, Nick Kinnie, Sue Hutchinson, Bruce Rayton and Juani Swart of the School of Management at the University of Bath.