Organisations
employing progressive people management practices benefit from significantly
higher business performance, finds new research.
The
study into 688 UK aerospace companies reveals that use of practices such as
profit sharing, high levels of training, performance-related pay and effective
internal communication result in much higher value-added per employee.
Research
for the Society of British Aerospace Companies finds firms which had adopted
these high-performance work practices in 1999 benefited from £68,000
value-added per employee in 2002 compared to £42,000 for firms that had not.
Marc Thompson, research fellow at Oxford’s
Templeton College, who conducted the five-year study, said the research also
shows the gap is growing between organisations which have reaped the benefits
of investing in effective people management and those that have not.
“Companies
that are making the most intensive use of high-performance work practices are
devoting 2.6 times more of their total wage bill to training than those not
using these practices – and this is clearly paying off in terms of
productivity," he said.
“The
gap in training investment between firms making high or low use of
high-performance practices had widened from 48 per cent in 1997 to 159 per cent
in 2002.”
