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How to harness the power of your human capital

Laurie Bassi and Daniel McMurrer put forward a system for assessing HCM, predicting organizational performance, and guiding organizations’ investments in people.

Empirical research has revealed a core set of HCM drivers that predict performance. These drivers fall into five major categories: leadership practices, employee engagement, knowledge accessibility, workforce optimization, and organizational learning capacity. In each of those categories, HCM practices are further subdivided. (see the exhibit “Human Capital Drivers.”)

Sharon Machrone and Linda Jenkins make the case that what all successful organizations have in common is that they build appropriate and successful infrastructures – operational infrastructure-buildings, processes, systems, financial infrastructures like accounting systems and investment strategies.

But what about “cultural“ infrastructure?

The critical link in attracting and retaining top talent?

  • In their book, Corporate Cultures, Terrence Deal and Allan Kennedy conclude that a strong culture “enables people to feel better about what they do.”
  • According to the Fuqua Report, the top two reasons people join a company are the opportunity for personal growth and the culture; core culture being the key driver of individual growth.
  • Noted human resource and retention expert Jack Fitz-Enz has found that the two reasons why most people leave a company are the supervisor and the culture; it is the culture that drives the ultimate relationship with the supervisor.
  • Norm Snell, director of global compensation and benefits for Cisco Systems, fervently believes that a company “can only tinker with compensations and benefits systems so much; it’s culture, culture, culture” that must drive staffing and retention systems.
  • John Kotter and James Heskett conclude that corporate culture “may even be greater than all those factors that have been discussed most often in the organizational and business literature strategy, organizational structure, management systems, financial analysis tools, leadership, etc.”

The relationship we have with our people and the culture of our company is our most sustainable competitive advantage, says Howard Schultz, the founder of Starbucks.

According to Jim Harris: “You enjoy numerous benefits when you align staffing and retention processes to culture. For instance, alignment simplifies the staffing and retention process. Since staffing and retention are based upon culture, decisions reached within aligned companies also strengthen the  culture. Alignment builds strong job connections, too. Aligned companies connect every job to its context and how the job strengthens the culture. Applicants and current employees therefore feel linked to all of the company’s job by way of participation in the culture. Further the focus on culture helps aligned companies satisfy employees’ deeper need to make a difference on connection to personal values. It is also easier at aligned companies to show how candidates and employees can make a difference in promoting the core culture, which is a more satisfying personal connection than any signing or retention bonus could ever deliver. Employees within aligned companies think twice about leaving, for fear of losing the special personal connection. Non-aligned companies continue to fight the selfish side of what’s-in-it-for-me (among both candidates and current employees). Without building new connections, non-aligned companies rely far too heavily on money-driven practices in their attempts to find and keep valuable employees. Such employees are harder to retain because they often feel compelled to search for new opportunities and stronger personal connections to their work and their employer.”

Machrone and Jenkins contest that HR executives need to start thinking about how to create a Cultural Infrastructure that defines, nurtures and harnesses the power of the organization’s human capital, as to motivate employees and keep performance headed in the right direction.

How would you or any of your organization’s employees answer these questions:

  • Does the organization have a clear voice for both internal and external audiences?
  • Do employees understand where the organization is going and how it is going to get there?
  • Do employees understand what is expected of them with regard to their jobs and their personal development?
  • Are there mechanisms in place to ensure that employees receive the training they need-and is knowledge shared?
  • Is the organization attracting and retaining the kinds of employees who will make the organization grow and prosper?
  • When you communicate with employees, do your processes and programs reflect who you are?

If there is any doubt about how these questions would be answered, chances are you have a cultural infrastructure that is shaky at best.
Machrone and Jenkins have identified three components of Cultural Infrastructure: programs, practices, and voice.

  • Programs include basic items such as benefit packages, employee services, and incentives. They should be clearly communicated, but they should also reflect the values and standards of the organization.
  • Practices include guidelines that you want managers and employees to follow. They need to mirror the organization. More traditional organizations might prefer policies that are specific and detailed while other companies might find that a few simple guidelines better reflect the company’s culture. Whatever practices are put in place should clearly reflect the organization’s values.
  • Voice refers to how you talk to employees-about the business direction and about organizational changes and how those changes affect them. It includes clear, timely communication from the top, especially on tough issues, and it provides user-friendly vehicles that promote communication both up and down the organization.

See how your company measures up.

 

Take the HCM Survey that you can use to optimize human capital management and organizational performance. Rate your organization on each statement, using a 1-to-5 scale (1, strongly disagree; 2, disagree; 3, neutral; 4, agree; 5, strongly agree).

So, where does your organization stand?
Did it score in the 90 to 100 range?

About Dr. Ev D'aMigo; PhD

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