HELPING RECs TO COMPETE: THE COMPREHENSIVE APPLICATION OF HIGH PERFORMANCE WORK PRACTICES.

• Author: Luthans, Kyle W.
• Position: Rural electric cooperatives - Statistical Data Included

In the Winter, 1999 issue of Management Quarterly, an article reported the results of a large sample of over 1,400 cooperative employees trying to answer: "The Future: How Does the Cooperative Employee See It?"

One question asked the participants to name their major concerns or fears about the future. In reaction to this question, about 20% of the survey respondents indicated that they didn't know where their organization was heading while 14% noted that they felt as if they couldn't keep up with the rate of change occurring within the industry.

Another question asked the respondents to name the attitudes and behaviors that needed to change in order to allow their organization to be successful in the future. To this, 33% said that an increased focus on teamwork was needed, 14% noted that better customer service was required, 14% said that more employee recognition was in order, 14% highlighted the importance of better communication, and 11% said that more employee involvement would be necessary.

As these survey findings indicate, the effective management of human resources may play an important, but overlooked, role in the future competitive environment facing today's RECs. As regulatory and political change, market forces, and technological advances continue to reshape this once stable industry into a deregulated, highly competitive environment, the employees themselves recognize that the effective management of human resources becomes critical. They note that more attention needs to be given to human resource issues such as increased information sharing, extensive training, creative reward systems (both financial and nonfinancial), and extensive feedback in order to be more adaptive and increasingly competitive. In short, success in this now competitive industry will depend on continually improving performance by reducing costs, improving processes, increasing productivity, and enhancing the quality of service provided. The effective management of human resources seems to be a major way to impact these key performance variables.

The message that managing human resources can be a source of sustained competitive advantage of course is not new. In fact, one of the authors wrote an article for the Winter 1998 edition of Management Quarterly which stressed the importance of "Using HRM to Compete in the 21st Century." In this previous article, it was noted that a strong empirically based connection exists between HRM and organizational performance.

Highlighted in this article was a summary of research findings indicating that HRM can be a source of sustained competitive advantage by helping to lower costs, increase productivity, and generate organization specific knowledge and processes. It was brought out that this relationship has been consistently demonstrated in a variety of contexts and settings including the rural electric utility industry.

The previously written article also suggested some specific types of research-driven "High Performance" HRM policies and practices that rural electric utilities might want to consider implementing as they face the competitive challenges that lie ahead. Some of these recommended practices included "not losing sight of the basics" (i.e., information sharing and communication), "evaluating performance" (identifying performance enhancing behaviors and evaluate performance based upon those criteria using a 360-degree feedback approach), and "using innovative reward systems" (i.e., using pay-for-performance types of incentive pay).

In this article, we extend these general HRM recommendations by reporting the specific types of HRM "High Performance Work Practices" stated as currently used by the 110 RECs surveyed across the country. This empirical data gives a starting point to identity what is meant by the term "High Performance Work Practices" in the rural electric utility industry. In particular, the article will first review some basic research which has shown a strong linkage between "High Performance" human resource management practices and organizational performance. Next, the results of the survey will be summarized to highlight exactly what types of HPWP's are currently being utilized. Finally, implications from the survey data for helping RECs compete through high performance work practices will be discussed and recommendations made.

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