Seven Practices of Successful Organizations

14082 Words57 Pages
Seven Practices of Successful Organizations

Jeffrey Pfeffer

ffectively management of people can produce substantially enhanced economic performance. A plethora of terms have been used to describe such management practices: high commitment, high performance, high involvement, and so forth. I use these terms interchangeably, as they all tap similar ideas about how to obtain profits through people. I extract from the various studies, related literature, and personal observation and experience a set of seven dimensions that seem to characterize most if not all of the systems producing profits through people. • Employment security. • Selective hiring of new personnel. • Self-managed teams and decentralization of decision making as the basic
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Similarly, when General Motors wanted to implement new work arrangements in its innovative Saturn plant in the 1990s, it guaranteed its people job security except in the most extreme circumstances. When New United


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Seven Practices of Successful Organizations

Motors was formed to operate the Fremont automobile assembly plant, it offered its people job security. How else could it ask for flexibility and cooperation in becoming more efficient and productive? Many additional benefits follow from employment assurances besides workers' free contribution of knowledge and their efforts to enhance productivity. One advantage to firms is the decreased likelihood that they will lay off employees during downturns. How is this a benefit to the firm? In the absence of some way of building commitment to retaining the work force—either through pledges about employment security or through employment obligations contractually negotiated with a union—firms may lay off employees too quickly and too readily at the first sign of financial difficulty. This constitutes a cost for firms that have done a good job selecting, training, and developing their work force:
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