High Performance Work Systems and Public Sector Workplace Performance in Britain

We assess the role played by High-Performance Work Systems (HPWS) in public sector management achieving cost reductions and efficiency savings, and in introducing ‘modernizing’ technical and operational changes. Using a nationally representative survey of public sector workplaces with 50 or more employees we find increased use of HPWS was positively correlated with workplace financial performance ratings and the implementation of workplace organizational change, and negatively correlated with wage costs. We also find target setting practices are, as much as HPWS, a significant influence on workplace outcomes. First difference estimates for the financial rating and workplace change outcomes qualitatively confirm the cross-section findings of HPWS effects from the cross-section. We conclude that both HPWS and target setting are important management technologies for managers pursuing government objectives in the public sector.