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People management – how to get HR right

People management or human resource management is a vital function for any organisation, large or small. This is true because managers across the globe acknowledge that the most valuable asset a company has, is human capital.

Think of NASA without their scientists. The Sloan Management Review summarises this fact by saying: “Financial capital is not the one that constrains growth – it is human capital".

In fact, according to a recent survey of Accenture Executives, the following issues take top priority:

  • Attracting and retaining key staff
  • Changing organisational culture and employee attitudes
  • Improving workforce performance
  • Developing employees into capable leaders.

The issues above precede R&D, financial systems, supply chain management, production improvement and risk management. It is easy to explain these survey results: managers realise that poor HR management can spell doom for the most promising of companies.

Wrong hiring practices, lack of training and inadequate growth opportunities invariably lead to de-motivated employees, a poor work ethic and high attrition rates.

Successful people management therefore involves attracting, motivating and retaining the core asset in any company: human capital. The chain reaction is obvious: effective HR practices drive employee satisfaction, which in turn results in customer satisfaction and long term profitability and growth.

How to build an effective HR management system

Let us begin by listing the key functions an HR department is expected to perform:

  • Job design
  • Hiring: recruitment and selection
  • Employee development (training and promotion)
  • Compensation
  • Performance management, performance appraisal
  • Employment relationship: retention and downsizing.
The next step in building an effective HR system is aligning the functions listed above with the following:

The company strategy

An effective HR policy will take into account the company’s strategy. Wal-Mart is renowned for their emphasis on low-cost, and their people management reflects this: they advertise narrowly defined jobs, recruit from a largely unskilled pool and lay little emphasis on training. 

The workforce

The HR policy should reflect the workforce demographic. No point offering elaborate retirement benefits to a team of 20-year old gaming programmers at EA sports. Free coffee may prove a better morale booster.  

Work organisation

The manner in which your employees work also has a bearing on which HR policies to adopt. Toyota is renowned for a team-based approach and its HR system reflects this through selection that is based on how well the employee fits in a team. All training is conducted in teams; compensation is linked to team performance and performance appraisal factors in team-member inputs.

Culture

The people management systems should be consistent with the culture of the company. Hewlett Packard prides itself upon an egalitarian culture and this is reflected in its HR practices, which include a common cafeteria, common parking lot and a lack of outrageous perks for its top employees.

Needless to say, different HR practices may work equally effectively for different organisations. Merely copying best practices doesn’t make sense. 

So, if you’re looking to work on your business rather than being stuck in it, book in for a complimentary business assessment today with Switzer Business Coaching.

 

Published on: Tuesday, March 16, 2010

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