Good human resource and management practices can significantly improve employee productivity and add considerably to a company's bottom line, according to research launched yesterday by Minister of State for Labour Affairs Billy Kelleher.
The study involving 130 medium and large Irish companies found productivity growth of almost 15 per cent was linked to the use of "high performance work systems" (HPWS).
"For the median-sized company in the survey [270 employees], this equates to an additional €12 million in annual sales revenue," it found. It said sales revenue of €44,399 per year was attributable to HPWS.
The study, commissioned by the National Centre for Partnership and Performance and the Equality Authority, said HPWS included strategic human resource management, partnership, diversity and equality strategies as well as flexible working arrangements.
The research, carried out by staff at Dublin City University, the University of Limerick and Kansas University, also found the use of HPWS accounted for 12.2 per cent of workforce innovation.
It said this was equivalent to sales revenue of €2,061 per employee per annum or €556,200 in the median-sized company. The research found HPWS accounted for a reduction of 7.7 per cent in annual employee turnover.
Director of the National Centre for Partnership and Performance Lucy Fallon Byrne said the report made "a compelling business case for greater use of partnership and strategic human resources practices across Ireland's workplaces". "It shows . . . the significant competitive advantage companies can accrue by adopting more effective approaches to managing partnership and innovation."
Chief executive of the Equality Authority Niall Crowley said the report established workplace equality and diversity strategies as key components of high-performance work systems. "This must ensure that the promotion of workplace equality and diversity now emerge as a priority focus in the implementation of the Government's national workplace strategy," he said.
Mr Kelleher said for ordinary companies the goal of having "high-performance work systems may appear challenging".
"However, it simply means workplaces committed to progressive, open approaches to management and development of the relationship between employers and employees".