Seven Practices of Successful Organisations - Pfeffer

Here's a really fascinating read. Granted, it's not completely IT related, but it is business related, so if you'll indulge me and continue I'm sure you'll find it most worth your while.

The article is titled "Seven Practices of Successful Organisations" by Jeffrey Pfeffer. Pfeffer is one of the best HR / Management authors I've read in the last few years. He's got some really interesting, ground-breaking ideas which put into perspective management and HR techniques being used in modern businesses today.

Essentially Pfeffer's article is on 7 key areas where a business can turn management of their people into economic performance.

I won't go into a great deal of detail on this particular article, suffice to say READ IT! You can get a copy off Google Scholar or from the California Management Review journal on request. The article is well worth reading as it's got some excellent insight into managment approaches to staff and the business outcomes of having a high performance team. Here's some of the key points;

1. Employment Security; Pfeffer describes how some organisations decide to re-deploy their workforce instead of making redundencies during time of economic hardships. One particular organisation hasn't had a lay off since 1948! The overall result was greater market share and market penetration due to the dynamic nature of their workforce.

2. Selective Hiring of New Personnel; One organisation described hired one out of every 50 candidates! Obviously they had a pretty large pool of applicants, but remember word from your employees spreads pretty quickly if you're a good company to work for! Combined with remuneration and training, an employee referal program can ensure you're targeting the right applicants of similar calibre to the ones you employ currently.

3. Self Managed Teams and Decentralized Decision Making; Pfeffer's article describes research proving self-managed teams can consistently perform with better results over two decades. Interestingly enough employees are more likely to let a supervisor down than one of their team mates. The case studies and businesses being assessed all have similar results - greater profits and higher revenues with self managed teams.

4. Comparitively High Compensation; Pfeffer describes in this portion of the article how organisations seek to hire the very best of employees but intend to pay them below the median wage in that industry. Pfeffer's belief is that this makes employees feel devalued by the organisation.

5. Extensive Training; this article describes how employee training results in high performance work, where front line employees are given the skills to identify and resolve problems, essentially saving money on the organisations behalf in lost work time. Mostly these examples provided by Pfeffer relate to production / assembly line workforces, but the same principles might apply to your own small business.

6. Reduced Status Distinctions; this assumption here is interesting. The article describes how many companies seek to reduce status distinctions, in terms of job title and dress when embarking on self managed  team projects. More recently some of these status destinctions being reduced can be seen in employees freezing or reducing bonuses during the GFC.

7. Extensive Sharing of Financial and Performance Information; Pfeffer;s insight into organisations leads him to describe here how organisations who share their financial and performance results with their staff will find their employees feeling more trusted and relevant to the organisations overall goals.

Whether you subscribe to Pfeffer's ideas or not, they are really interesting reading. I'd suggest taking a look at the article as it'll certainly make you think about you own employees and work groups within your organisation. Pfeffer in my opinion really is a bright spark. The article is worth reading to get a better insight into how larger organisations run - and particularly if your organisation could gain a competitive advantage through your human resources.

Pfeffer, J. California Management Review, Vol. 40, No. 2, Winter 1998