Research has shown that certain human resources practices, known as high-performance work practices, can improve organisational performance. A recent study, ‘How much do high performance work practices matter?’ published in Personnel Psychology, suggests a 20 per cent improvement in performance can be achieved through adopting high-performance practices.
Such work demonstrates the key role that HR managers in the NHS will play in delivering better services. It comes at a time when expectations of HR managers in the health service are changing. For example, they have been involved not only in implementing new pay and grading systems (Agenda for Change, and consultant and GP contracts) but also in contracting and working with multiple provider organisations in increasingly complex settings.
HR initiatives in the NHS have increased recently. Policy has focused on four aspects; the 10 “high-impact” changes (outlined in the national framework to support local workforce strategy development); making the NHS a good employer; providing model careers through the skills escalator; and introducing integrated planning.
The 10 high-impact HR changes do include some of these high-performance practices. Yet although links have been made between HR and performance, there has been little research into how, why and when HR makes a difference in the NHS.
A recent Chartered Institute for Personnel and Development report, Improving Health Through Human Resource Management: the process of engagement and alignment, looks at effects on individual and organisational performance in the NHS. It describes six case studies – two acute trusts, two mental health trusts and two primary care trusts – that had either a history of high performance or had recently transformed performance in terms of national performance metrics.
The study describes how HR management can support a two-way “line of sight” throughout the organisation, bringing together business priorities and staff motivation to make a difference for patients. HR managers can form a conduit that brings together the expectations of senior managers and of frontline workers during times of change. This can be central to making local sense of external demands on the organisation and can contribute to organisational strategy through strategies and practices that enable people to perform well.
The study identifies how frontline staff sometimes struggle to see the local relevance of national targets, which are felt, at times, to distract from rather than contribute to patient care.
One primary care trust worked to overcome this by asking “why do we want to do this here?”. It then rewrote the target to make it locally relevant, for example: “We believe the people of this town should not have to wait more than four hours to be seen in accident and emergency.” Staff then helped to develop ideas to achieve the rewritten goal.
This relatively simple manoeuvre promoted local ownership and understanding of the need for particular performance achievements. It was especially effective where the target was rewritten to show a positive impact for patients.
The study also explores the attitudes of health service staff and the unwritten obligations they feel employers and employees have, as breaches of such ‘psychological contracts’ can reduce organisational performance.
It found that both clinical and non-clinical staff were focused on making a difference to patients, so that even where they were unhappy with organisational changes, they worked hard to avoid this adversely affecting patient care.
Although each case study organisation had developed different organisational and HR strategies, the ways they used practices such as appraisal and employee involvement were surprisingly similar.
The study shows how frontline workers see these practices as supporting their own job performance.
This view of HR practices was surprisingly consistent across occupational groups, organisational level and job type. For example, both clinical and non-clinical staff had similar views about how such practices helped make service delivery effective.
It has been argued that groupings of HR practices can improve performance, but little is known about how this works. The study identifies how these practices were grouped by NHS staff as a means of fulfilling their unwritten or psychological contract. It shows how staff make sense of their work and how changes to work organisation might disrupt the psychological contract. Staff cited three important factors that affected their performance:
development of a skilled and professional workforce through appraisal, training and career development;
employee contribution through team working, employee involvement in decision making and communication from managers;
the “deal” that employees get in terms of pay, non-monetary rewards, work-life balance and job security.
HR has a key role to play when any of the above change. For example, when changes to job security and arrangements for pay threaten to disrupt the employee deal.
Managers should discuss and communicate changes and responses up and down the organisation and work to resolve difficulties.
One primary care trust involved as many staff as possible in Agenda for Change review panels. This had a dual effect of increasing understanding about the changes to pay generally and in developing knowledge about other parts of the organisation.
The case study of this trust suggests that the way HR practices are implemented locally can improve or reduce their effectiveness.
The organisation’s line managers were struggling to balance their clinical and managerial responsibilities. Some managers also had had no training in HR. Yet while some managers were overwhelmed by the volume of policies, others found these supported discussion with staff.
There were some examples of effective HR and line manager relationships, which helped organisational and individual goals to be achieved. Good relationships such as this were important to implementing HR practices.
The study outlines a process of engagement and alignment that allows HR to interact dynamically with the wider organisation.
This engagement improves performance and involves:
understanding how organisational and HR management strategy is linked through individual attitudes and behaviours to organisational performance;
engaging with each element of the HR performance process and making possible two-way communication and adaptation;
aligning elements of the process, especially links between organisational strategy and individual roles.
The study identified many implications for the NHS. To improve performance the health service needs to:
align HR management strategy with the overall vision and direction of the organisation, including expected effects on patient care. This must be explicit, led from the top and consistent;
communicate the vision honestly with staff and involve them in organisational change;
understand the competing priorities and capabilities of line managers.
Meanwhile, HR managers need to:
translate and adapt national guidance on HR management and policies, so that they make sense locally;
align HR practices and processes to organisational goals, so that staff are encouraged to contribute;
give meaningful feedback about performance to staff through mechanisms that are effective and timely;
understand the key role of managers and their requirement for appropriate knowledge, skills and appraisal.
The findings from this study support the view that effective human resources arrangements depend heavily on local context and there is no single best way for the HR function to operate in NHS organisations.
Instead, systems need to become increasingly sophisticated in engaging with a range of stakeholders to help improve performance.
Dr Paula Hyde and Professor Ruth Boaden are based at Manchester University business school. Copies of the full report and summary findings are available from www.cipd.co.uk and www.mbs.ac.uk/research/improvinghealth.
This article represents the views of the authors and does not necessarily reflect those of the