High Performance Working in Aspect Capital UK and Bacardi-Martini - Iloka Benneth Chiemelie, Ugboma Christian

0.1 INTRODUCTION

Researchers have embraced the move towards new working practices in order to meet challenges of the 21^st century markets (for example, Huselid, 1995; Huselid and Becker, 1995, 1997; Lynch and Black, 1995, 1998; Black and Lynch, 1996; Delaney and Huselid, 1996; Becker and Huselid, 1998; Becker and Murphy, 2001), with high performance working practices being viewed as the' solution for managing the 21^st century workplace.

High performance working is not a new trend in business, and it can be argued that the trend has been around for over 50 years. Some of the origins can be traced back to the advocacy of quality practices that was denoted by Feigenbaum (1991). Butler et al. (2004) also commented that high performance working has its root from total quality management (TQM), as companies seek it as a way of gaining competitive advantage and satisfying their customers.

High performance working can overly be viewed as a way, by which organizations coordinate their day to day activities, to enhance and create consistency, and create competitive advantage. This is now a time of immense consideration due to the rapid growth of globalization and high competitive global market. Thus, firms must always improve their product and services offering in order to win the hearts of their customers and create high customer loyalty.

Based on the above arguments, the objective of this research paper is developed as to understand the importance of high performance working in organizations. In that case, two UK companies (• Aspect Capital and • Bacardi & Martini) were chosen as organizational references in this research. The paper is basically divided into three sections, with section one providing a literature review on high performance working theories, and section two implementing these literature review into the chosen organizations. The final section contains recommendations on the way forward for both companies and conclusion of the research paper.

1.0 THEORETICAL BACKGROUND

Amongst the core principles of strategic human resource management is that the performance of organizations is influenced by employee management. Corresponding with this argument is the finding of certain human resource practices as being able to improve employee effectiveness and thus, yielding high performance level (Bailey et al. 2001, Ramsey et al. 2000; Becker and Gerhart 1996, Ichniowski et al. 1996).

This impact of strategic human resource has also been documented by researchers as much as workers' productivity (Arthur 1994, Bartel 1994, Datta et al. 2005, Koch and McGrath 1996) and equipment efficiency (Ichniowski et al. 1997, Youndt et al. 1996), on quality results like manufacturing quality (MacDuffie, 1995) and patient mortality (West et al. 2002), and on economic improvement (Bartel 2004) and financial performance (Collins and Smith 2006, Delery and Doty 1996, Huselid 1995, Wright et al. 2006).

According to the UK Commission, high performance working is a approach of managing organizations that aims to stimulate more effect involvement and commitment from employees in order to achieve high levels of performance, designed to enhance the discretionary effort employees put into their tasks, and fully utilize skills possessed by these employees (Belt and Giles, 2009).

Multiple labels have been identified as the frameworks for high performance working, including high-performance work systems, high-commitment work systems, high-involvement work systems, and high-performance human resource management. Despite these different labels, the common conclusion from all the labels is that organizations can increase their performance by adopting practices that recognizes and utilizes employees' ability to create value. It is also believed that there practices yield most significant results when implemented in groups because of their combined effect on organizational performance (Batt 1999, Dunlop and Weil 1996, Ichniowski et al. 1997, Laursen 2002, MacDuffie 1995).

Other arguments have also argued that together with enhancing knowledge and skills of employees, high-performance work systems also increases the commitment level of the employees. Commitment-based human resource applications create an atmosphere within the organization that motivates employees to act with the best interest of the company at heart, thus enhancing their productivity (Appelbaum et al. 2000, Arthur 1992, Osterman 1988, Rousseau 1995). The key argument is that human resource practices create a psychological contract with the employee by signaling an employer's commitment through long-term relationship, thus resulting in a long-term commitment from the employee (Tsui et al. 1997).

In summary, the literature review is pointing out that high performance working is essential for success of organizations due to higher competition in today market, and the best way to ensure high performance is through committed workforce. In order to build high commitment within the workforce, organizations are encouraged to adopt practices that enhance employees' skill and performance, and utilize these skills to increase their productivity. Such practices as highlighted include flexibility, training and development and wage systems. The preceding chapters will then illustrates how organizations can build a high performing workforce from case study of two UK companies. 

2.1 WITHIN CASE ANALYSIS OF THE COMPANIES' HPW PRACTICES

2.2 FIRST COMPANY - ASPECT CAPITAL UK

The recent uncertain increase in the UK stock market has resulted in the emergency of numerous fund managing companies. Aspect Capital is amongst the successful new firms, and has been producing outstanding returns for its investors since the establishment of the company in 1997. The company achieved such by adopting different approach from other financial companies (Johnny and David, 2011).

Aspect capital was founded in 1997, by Anthony Todd, Eugene Lambert, Martin Lueck and Michael Adam, who have all been the pioneers of success in another previous company. The founders had a particular vision about the financial market, and believed that the long period of growth seen in the stock market can't continue indefinitely. They believed that there is an existing risk of an extended period of re-adjustment, consolidation, and possibly a full decline in the stock market. In that case, they believe that when the stock market starts to go down, people will seek alternative investment options. Thus, they wanted developed Aspect Capital as the alternative for the long-only return on stock market for corporations seeking to diversify away as a security measure (Johnny and David, 2011).  

Another objective set by Aspect Capital is to create a business that people fell passionate about working in. the company was very serious with the people strategy up to the extent that it wrote a cultural plan in 1998. The base for the plan was developed on the idea that a cultural view was always hard to find within the financial sector due to its people and environment. The company believed that a great working environment will increase its chances of success, as they are not just about building a successful business, but also want to build a workplace that people can actively work within themselves. The company uses this cultural plan as a tool for promoting key workplace attributes to make Aspect Capital a better workplace (Johnny and David, 2011)

2.3 HIGH PERFORMANCE WORKING PRACTICES IN ASPECT CAPITAL

2.3.1 BUILDING PASSIONATE WORKFORCE

One of Aspect Capital's goals is to build a business that people are passionate about working in. The CEO acknowledged such by stating that the company was developed to recaptures certain elements of the dynamism that they has in the early 1990s (Johnny and David, 2011). Aspect capital is serious about this people strategy up to the extent that it drafted a cultural plan to reflect such intentions in 1998. This cultural plan was drafted based on the idea that given the complex nature of the financial environment in which the company operates in, a people culture is hard to come by in their business industry (Johnny and David, 2011).

For instance, issues such as taking care of staffs, providing a challenging and dynamic environment, encouraging teamwork, and creating a transparent, open, sociable and fair workplace are commonly overlooked in the industry (Johnny and David, 2011). Based on this example, the CEO discovered that if they are to cultivate a people culture, then aspect capital will be able to meet its goals of developing a workplace that people are passionate about working in.

Aspect Capital's high performance working practices for building a workplace where people are passionate about working in can be seen in their reward system. While other financial businesses distribute employers' performance bonuses in relation to their ability to achieve hard targets, Aspect Capital adopts 9 elements from its cultural plan as a means of determining performance rewards. These elements are: teamwork, initiative, people management, project management, attitude, attention to details, professionalism, communication and productivity. In order to signal the importance of these activities, the company creates social events as a means of encouraging their employees (Johnny and David, 2011).  

2.3.2 RECRUITMENT AND TRAINING AND DEVELOPMENT

To the their cultural plan ideologies, recruitment process is not an easy context in the company, as they seek to not only recruit the finest but to also train them to become the greatest (Johnny and David, 2011). For instance, Aspect Capital recruits some of the brightest programmers, mathematicians, programmers, researchers and IT teams, who serve as the bedrock of the company's quantitative approach to management and development of new financial products.

Certainly the company will have to attract these staffs with high pay, and they do so as a way of increasing their commitment. Thus, high pay package is common in Aspect Capital's recruitment process, but sometimes, the high scores of these new recruits is not a guarantee that they will have the necessary skills required for them to undertake their responsibilities in Aspect Capital (Johnny and David, 2011).

Thus, coupled with their high performance working practice of recruiting the brightest workforce, the company also views trainability as the potential for future development and internalizing the nine elements of their culture into every employee. The CEO acknowledged that it is relatively easy to find the right people with the required skills, but it is very difficult to find people with the kind of personality they seek in their workforce. Thus, Aspect Capital trains all its recruits on high commitment practices, high productivity practices and a sense of organizational culture that is built around the nine elements of its cultural plan.

2.3.3 QUALITY CONTROL IN THE COMPANY

Aspect Capital deals on highly complex financial products and thus, quality is the essence of their dealings. The company controls quality by training and monitoring every employee. For instance, recruits in the research team will be put through a study of hedge funds and financial market in order to better understand the business dealings of the company (Johnny and David, 2011). New recruits that are fresh graduates are put through the financial engineering teams to learn about the company's quantitative approach to hedge fund management, different areas of research and how their researches influence sales and shareholder's demands. All other departments are also trained thoroughly (Johnny and David, 2011).

The training process is based on a combination of internal on-the-job training and external special institutions. Internally, departments are put through cross-functional activities to learn about other departments and enhance their overall understanding of the business as a means of equipping them with the necessary skill for decision making (Johnny and David, 2011).. Externally, trained professionals are hired to train their staffs by using presentations and coaching on the current business skills. Their investments on training and development of their staffs as highlighted by the CEO is to ensure the quality of their services, as when their workforce are updated with the current skills required, they will be able to handle the business in a more reliable form.

2.3.4 LEADERSHIP STYLES

Aspect Capital views every employee as essential in running of the business as all their recruits are considered the best of their class. Their management style is based on an open and collaborative style were every employee is capable of making full decisions that are related to their activities and each employee is encouraged to share ideas with their fellow colleagues as a means of increasing their innovation. The senior managers are made easily accessible to the team and supervisors are given just 4 to 6 employees under their control in order to ensure that they have full control of the business dealings under their supervisions. Such an open management makes information sharing and quality control easier as teams are small and management teams are available for the consultation from employees (Johnny and David, 2011).

2.4 DIFFICULTIES, CHALLENGES AND IMPLICATIONS OF HPW IN ASPECT CAPITAL

The above case illustrates that the company is faced with the difficulty of meeting high salary package as the only way to attract and keep the most outstanding personnel is to offer them high salary. The also face the challenge such as

2.4.1 Difficulty in ensuring that these new recruits meet their expectations and market unpredictability - according to Johnny and David (2011), Aspect Capital understands that while money is essential for recruiting the best workforce, it doesn't necessary mean that these new recruits have the exact required skills, nor does it me that they will be well committed towards utilizing their skill in developing the company. Therefore, this is a difficult situation for the company as they must find a way to ensure that these skills are adequate enough and used in developing the company. Aspect capitals also face the problem of market unpredictability, as there is no certainty or guarantee that the market will always move in favor of the company.

2.5 SOLUTIONS ADOPTED BY ASPECT CAPITAL

Following the above listed difficulties, the company ensures it fully trains all its new recruits, including assigning them in different department to ensure that they are aware of all aspect of the business. This increases their innovativeness as helps them in producing more efficient and reliable solutions in all their workforce endeavors.

2.6 SECOND COMPANY - BACARDI -MARTINI

Bacardi-Martini Limited is a UK-based wine company that specializes in bottling and distribution of alcohol beverages. In addition to this business, they also have their own wholly owned brands, and distribute brand for its trading partners such as Jack Daniel's, Southern Comfort and Glenmorangie malt whisky (Johnny and David, 2011).

2.6.1. HIGH-COMMITMENT EMPLOYMENT AND HIGH-INVOLVEMENT WORK PRACTICES

Bacardi-Martini's high performance working practices is based on an approach called "back to the floor" (Johnny and David, 2011). Under this approach, every top executive within the company will return for a day to the shop-floor department once between three to six months. During that day, the senior executive will work with a designated team in a given task, and more importantly, they take orders from the team supervisors and their contributions are open for criticism by team members (Johnny and David, 2011).

This back to the floor approach is a great way to make the senior executives more visible and accessible, and most importantly, it gives them the opportunity to hear the views of other employees in relation to the issues the business is facing and constraints for refocusing or enhancing the organization.

2.6.2 INNOVATIVE WORK PRACTICES / WORKPLACE INNOVATION

The company's overall high performance working is based on the company's value they call PACT, where pact is an acronym for Productivity, Accountability, Creativity and Teamwork. Thus, their reward process and performance is measured based on the PACT approach and this approach is common within all departments in Bacardi-Martini (Johnny and David, 2011).. The company has numerous range of reward system used to balance the impact of PACT on the workforce such as assurance to employees that they are valued by the company through free hot meals at the restaurant, private health care, life insurance, sports facilities, helplines, discounted products etc. another point of note is that family members of all the staffs are also entitled to these benefits (Johnny and David, 2011).

2.6.3 DIFFICULTIES, CHALLENGES AND IMPLICATIONS OF HPW IN BACARDI -MARTINI

The delicate balance between PACT, people culture and a sense of fairness resulted in numerous issues. First, since the PACT approach is based on rating, the company has to deal with the impact of biasness and preferential treatment and it made determining of performance less accurate and more difficult (Johnny and David, 2011).. For instance, employee than thick good to their friends within the workplace when infect they didn't deserve the mark, or tick bad to staffs they are having problem with. Secondly, on an individual bases, not everyone is happy with the organizational approach adopted by Bacardi –Martini and this raises problem during recruitment periods. These difficulties and challenges implies that the company still have numerous issues to cover in order o ensure full adoption of high performance working system (Johnny and David, 2011).

2.6.4 SOLUTIONS ADOPTED BY BACARDI –MARTINI

In order to resolve the above problem, the company enhanced its rating process by hiring external and professional review teams to work through the performance of each employee and compare it with the actual rating given to them by the staff members. The whole results are also put through the management team for scrutiny. This measure ensured a more reliable rating within the system, and it can be justifiable to state that the company has been successful in reducing and possibly eliminating biasness within the rating system.

2.7 ACROSS CASE – CRITICAL COMPARATIVE ANALYSIS

From the both cases studies, the contents of the literature review was demonstrated to a great extent by illustrating that while the high performance work systems of different organization differed, they are all based on the primary objective of creating a friendly workforce that encourages commitment, sharing or ideas and good attitude towards enhancing the overall productivity of the company.

Aspect Capital and Bacardi –Martini two different companies within two different industry but both adopt high performance based plan that is geared towards increasing productivity within their system through employee satisfaction and commitment. Aspect Capital focuses on their cultural plan and recruitment while Bacardi –Martini adopts the PACT approach and back to the floor approach to encourage sharing, promote equality and commitment.

However, these high performance working comes at a very high price to both companies, and while they serve as a productive source today, they can lead to the downfall of the company in the future if not properly managed. For instance, Aspect Capital's approach of attracting talented workers by offering them high salary package is not a good means of determining a worker's commitment on the job, and this workers are likely to quite if the company decided to reduce their wage package in the future. On the other hand, it increases the company's operating cost and reduces its profit compared to when the workers are offered normal salary package.

The same is applicable to Bacardi –Martini's back to the floor approach where each top executive is forced to work with the normal staffs at least once in every three months. While this is important in making the top managers accessible, it can also influence their decision making process as working with normal staffs can reduce the gap between staffs and managers and result in staffs disrespecting or disregarding the command of the manager. This will eventually result in low productivity if not properly taken care of.

Thus, the above explanations illustrates that while high performance working is essential for enhancing the productivity of a company, the process and concept adopted need to be monitored to ensure that it meets the set objective and doesn't divert from the company's main objective of increase production to other negative outcomes.  

3.0 RECOMMENDED BALANCED PROPOSAL

From the above cases analysis of Aspect Capital and Bacardi –Martini, numerous points were highlighted as an area of concern for both companies in relation to building a highly performing workforce. Although it must be acknowledged that the companies have done notable wonderful works that have helped in building a sustainable workforce within their system, it is also necessary to note that constant improvement is part of creating a high performance workforce. Thus, these balanced proposals are recommended for both companies with justifications.

3.1 BALANCED PROPOSAL FOR ASPECT CAPITAL

While the company applies great efforts and invests high capitals towards developing a skilled and knowledgeable workforce, little is done into utilizing these skills. It must be acknowledge that the stream of potential available at Aspect Capital is big enough for the company to develop its own internal training system and employee personnel with lower experience and thus lower wage demand, then train them internally into a high productivity unit.

Thus, the balanced proposal is that the company should ensure full utilization of the workforce's skills as much capital is invested into these training, and they should also adopt a recruitment bases that target fresh graduates with lower pay package to reduces their expenditure on employees' salary.

3.2 BALANCED PROPOSAL FOR BACARDI –MARTINI

The most spotted issues with Bacardi –Martini's high performance system is the evaluation of their PACT approach. The case highlighted that it is based on a rating process by other employees and executive and this can led to certain level of businesses and preferential treatment, thus making it difficult to determine accurate evaluation of employee's contributions. Thus, it is proposed that a new valuation process is required in the system to ensure that employees rated performance are in line with their actual performance. Such evaluation process can include division of labor and specialization with the department to accurately evaluate employees based on their own contribution instead of group bases.  

4.0 LIMITATIONS AND CONCLUSION

Overall, this research paper has been helpful in shading lights on high performance working systems amongst organization. It also illustrated the commonly used framework and highlighted why high performance working is now a common issue of concern in organizations with globalization the main point of note.

However, this research paper while it was developed from intensive and extensive desktop papers is limiting in certain areas. Because some of the journals adopted were based on researches done over decades, their illustrations and theories might not be closely related to business application of the modern market especially with the advancement of internet technology. On the other hands, the companies compared were not from the same industry and it could be argued that this limits the possibility of fully understanding the application of the HPW system within organizations of the same sector.

In conclusion though, it is worthy to note that the objectives of this research were meeting with great precisions. Theoretical backgrounds and literatures were developed on the topic and these theories were used to analyses the companies compared. Balanced proposals were developed for both companies in relation to their limitation in application of high performance working system. Thus, it can be concluded that this research paper has been essential towards demonstrating HPW system with different organization in both theoretical understanding and application, with the main point being that high performance working is essential for all organizations to maintain productive workforce, but their application differs from one organization to the other.

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