Human Capital Musings!

a peek into the human capital world…

Does your organisation have an exit management SOP?


Most leaders among us believe that managing exits of employees is the HR functions responsibility. Nothing can be far from true. Good leaders make sure that employee exits are handled with care and finesse…  isn’t is often said that every employee is the organisations brand ambassador.

Loads of  care is taken by organizations in engaging employees when they are with an organization. The same care and attention is somehow given a convenient go, when an employee decides to part ways with the company for personal/professional reasons, what be it. Even worse, the process in mismanaged, for want of time and a want of an understanding of how critical  the exit process is, to the employer brand.

Here are 2 real life situations which speak volumes on what could be the best way of exit management, and which serves to beef up the employer value proposition (EVP) in the eyes of all stakeholders.

Victor has served the midsized company from inception, built the brand assiduously by bringing in clients, relationships, revenues, through team-building, and a whole lot of relevant and related tangibles and intangibles. In his stint of over 2 years with the organization, never has he sought any goodies, upped the ante,  nor voiced his environmental constraints, nd has accepted decisions of the company, owing to the market conditions with grace and poise. This, despite even a lot of monetary setbacks, and going back on benefits that are promised & legally binding; and a lot of initial promise on how he will have a skyrocketing professional growth, and how his role and compensation will grow as he meets his expectations.  Even when Victor has many setbacks on his personal front, he continues his work, sans any attention by the organization.

Time comes for Victor to move on, to nurture his personal and professional life as he desires.  He communicates this to the person above in the hierarchy, and his resignation is accepted, taking facts into consideration. He serves his responsibilities; in the interregnum before he is released, a senior most person in the organization comes up and tells him that he cannot go; that he will struggle for survival (issues like food and shelter?!), if he sticks to his decision. Veiled threats are held at him for no reason. It is harassment in its diplomatic form of sorts; many in the corporate office of the organization and even some erstwhile colleagues are pushed to throw muck at Victor; this continues even as he leaves graciously.  He quietly moves to take care of his personal and professional priorities, blind to most of this ‘throwing muck’.

Now to John; John has worked with a large MNC, a leader in its space in the country for a little over 2 years; his stint has been fine, his contributions being above average. His presence is always acknowledged by leaders in the organization, and those leaders make it a point to call him for anything that was to do with the good of the long-term interests of the MNC.

John, wanting professional advancement decides to move on, and communicates the same to his functional head. The head refuses to accept his resignation come what may.  The next morning, to the huge surprise of John, his boss flies in to his place from the corporate office, and expresses gratitude for the work John has done, and pleads him to stay. The boss says any issues can be sorted out, unconditionally, within the framework of the organizational policies.

However, John sticks to his decision, which is finally accepted half heartedly by the boss. The boss also advises John to facilitate in getting an appropriate person for John’s replacement, and also to help in the client transitioning etc.

In the meanwhile most national leaders from the organization continuously communicate to John, checking out is they can help and make him stay. John’s boss even went to the extent to advising the HR to check if John would prefer to report to someone else, yet stay back in the company.  HR also is constantly in communication, and checks what all separation issues need to be addressed; by when moneys of settlement are needed etc.

On the last day of John’s service, his boss again travels down to his location, and bids farewell with lavish praises. Most regional leaders of the organization and most teams were in attendance; even an hour before the close of that day, a functional head tells John to join his team, and he would take care of professional and personal needs.

To cap it all, John’s boss writes a mail to every employee in the company, across the country, and marked to all regional and global leaders, that John’s work at the company was great, and it was a matter of pride to have had him working for the company; wishing him the best moving forward. HR also ensures that all what is due to John is taken care off, without any need for following from his side.

From these real-life stories, it is very clear that John will be a great brand ambassador carrying the brand flag forever. Needless to say, Victor will be a bitter man, carrying only bitter memories.

(Both John and Victor are real life instances, with organisations that dealt with exits in a diametrically opposite fashion).

Managing employee exit, in commonsense parlance, is all about etching great memories of the organization, in the mind and heart of the exiting employee.

One step ahead, it is high time organizations had a formal SOP on managing exits well!

Do you hire from your direct competition?


It’s now common, and rather inevitable, to poach from your direct competition. However, there are a few things you must remember…

1. Never start with ‘your company is in dumps…’. The candidate is willing to look at you precisely because of some perception close to that or any issue which may not be in the open… Re-iterate as to how life can be better in your place, rather than speaking the load of negatives about competition…. throwing negatives reflects badly on the quality of your HR function…!

2. Engage only in a relevant conversation, from the specific prospective employee point of view. Statements like ‘xyzee from your place came at our terms etc’ would only get you desperadoes’ and not the real stars… Remember, you are not a savior, and you want them for a business objective too.

3. Listen to the prospective employee point of view, instead of mouthing platitudes on how your company got people cheap… What if the prospective employee retorts ‘you pay peanuts, you get monkeys.. uh…’?!

4. Showcase as to why you are good, and not as to why the other company is bad. The employee comes from there, and has no need to hear his present company information from you.

5. Clarify roles and responsibilities, instead of only sounding like buying ‘human vegetables’. That is HR at its pits, and is a bad reflection of how you value people.

6. By taking names, of whom you got for how much, you drive the prospective employee to more comparison which could lead to inequity thoughts, and that would only harm your company interests… plus now those who have come in are ‘your employees’, and whatever you did and do, directly speaks volumes about your quality of hiring.

7. A simple “this is the best we can pay in your case” is good for everyone. Don’t throw open a pandora’s box by mentioning all irrelevant data.

8. Remember, you hire people for your company growth. If that is not the pivot, then you are harming careers, and also you company.

9. Good prospective employees are smart candidates… think otherwise, the cream will never fall for you verbal innuendo. And no book in HR advises innuendo as a prudent hiring practice.

10. Allow the prospective employee to speak, and for god sake, you listen. As they always say, two ears are to listen that much more, that speaking with one mouth. And if it’s a telephonic conversation, you have to listen that much more.

Remember, the prospective candidate, in these few conversations, sees you as a brand ambassador. And HR is indeed the best brand ambassador for your organisation.

Hiring people… are we asking the right questions?


On January 15th, 2009, Captain Chesley Sullenberger made an emergency landing of his 50-ton passenger aircraft, US Airlines Flight 1549 – softly gliding it onto the Hudson River in New York City, saving the lives of all 155 people on board.

What he did was not only a feat, but also a testimony to his on-the-job skills, dedication and passion. Plain words would not suffice to express the feat of Capt Sullenberger.

What are the odds that you and me, as hiring managers, will find our Captain ‘Sully’ Sullenberger?  .

For most of us in the corporate/human resources space, the formidable challenge is to get the star hired out of the lot of candidates out there, be it a CXO or a frontline sales foot soldier. This singular ability to identify and hire individuals, who can excel at work, and beat the market – the raison d’etre of any winning organization!

The trick is probably looking at the candidate’s core competence and also what he is passionate about, at work or otherwise. Picture this: If you were the guy in charge of hiring pilots for US Airlines, how would you have identified Capt Chesley Sullenberger from the whole lot of aspiring and young pilots?

Or rather how would you not at any cost miss out on hiring the handful of Capt Sullenbergers from a thousand aspirants.

While there are surely many proven models on ‘how to hire the right person for the right job’, the most simple and cost effective way is to factor a few simple questions as a part of the hiring discussions.

In today’s rapid fire hiring processes, it is competency assessment on the basis of standard question templates that dominate rather than a few rudimentary but revealing questions.

One such rudimentary question is: What do you do in your spare time? What are you passionate about?

When Michael Balboni, New York State’s deputy secretary for public safety, thanked Capt Sullenberger for a job done brilliantly, he responded “That’s what we’re trained to do.”

But that was humility at its best, a singular hallmark of passionate leaders.

In an interview like situation (hiring), only a probing question on the Captain’s hobbies, life likes and passion would have revealed this:

When most friends were getting their driver’s licenses, he got his pilot’s license. For fun, he flew glider planes, which is what he did when he landed in the Hudson River with no engines. Extracurricular activity? An accident investigator for the Air Line Pilots Association and work with federal aviation officials to improve training and methods for evacuating aircraft in emergencies. This explains why he walked through the cabin twice, making sure no one was left behind before he escaped the sinking plane himself on that day over the Hudson river!

This might seem eccentric and obsessive to quote from what I read somewhere: “Obsessions are one of the greatest telltale signs of success. Understand a person’s obsessions and you will understand her natural motivation. That one thing for which she would walk to the end of the earth.”

Well, we are not hiring for those who would be willing to do that long walk, but only those whose probability of success on the job is above average, at least and excellent, at best.

So, are we ever looking for that little obsession for job-related skills – a receptionist excels in greeting people with a smile, and has to like doing that and being hospitable, a sales guy needs to be passionate about people and how the product and services benefit the customer, a recruiter is passionate about helping people shape their careers, a doctor is passionate about saving lives… this list is just endless depending on who has to be hired.

Puttting it in a nutshell,  only the right and simple questions throw up our ‘Captain Sullenberger’s!!

Are we ever asking the right questions while hiring?!

 

Musing on HR Communication.


I am one of the strong proponents of a strong HR Communication function as an integral part of the overall HR organisation. I also think that with the advent and integration of social media and the likes, and the age of the over-informed employee, it is only a prerequisite for an agile and successful HR function.

Some of my reasons for thinking so…

  • There is no denial that the HR leader and those in HR would be equipped by them self to inform the stakeholders about what is relevant and what HR deems as significant. This is now mostly restricted to HR operations, HR administration and EE related info. But given the constraint of time and ‘resources’, most of the times there is no emphasis on the import of a proper communication design. Having one by making the HR Communications pro take charge, will only greatly enhance the image of the HR function – this over a period of time. HR, as the proponents of the ‘employer brand’ MUST also ensure that even in the mundane, excellent standards and style of communication is in place. Who else  but a professional who is a combination of a HR and a communications pro to usher in this ‘best practice.
  • While HR facilitate the entire gamut of activities on the people front – from pre-entry to post-exit, a lot of times, even the best of ‘employer brands’ tend to screw up and self inflict ‘brand image’ injuries on themself, just because they are not equipped to deliver the right ‘communication’ – not the verbal stuff, but by the letters, mails etc. The HR Communications pro will take up the task of creating task specific communication templates (not static, but dynamic and audience specific).
  • HR is yet, by and large seen as the facilitator to the line management on a whole lot of people related activities – recruitment,  T and D, performance management, and so on. A well rounded HR Communications pro, who is fully conversant with the org and its HR, will be the best person to ensure that the ‘perception’ of the line management towards HR as a facilitator moves up the ladder. While the people in the core HR function can be seen as ‘content’ and the HR Communications pro ought to be the ‘delivery’ channel for HR.

Like can be seen above, the HR Communications professional who is an integral part of the HR team, can add a lot more ‘perceived’ and ‘tangible’ value to the HR Organisation – mentioned above is just a sampling of the value add.

To the question as to why the corporate communications or PR function of the organisation is not enough to add this value – the answer is this:

In most cases they are more glued on to macro image management, internally and externally – that may or may not have a desired impact with the employee and all the stakeholders. Also remains the fact that, the PR/corp comm people are fully engaged only in media related communication, which add only ‘leadership image’ value.

The HR Communication professional is the one who could play a great role in the ‘employer branding’ internally. And that can only add to all the buzz of ‘external branding’.

Its akin to creating the internal walk for the external talk.

Organisations successfully ‘walk the talk’ if a HR Communications pro is in place.

Stability or competence.. what would you say?


Few days ago,  someone had called me to get my opinion on which I would think is the deciding factor in getting someone for a role with my client organisation.

My reply was  – while I may personally opine that competency is of paramount importance and will score over stability, other things remaining the same, most of my clients would indeed feel uncomfortable sharing that view of mine. And so, from a client perspective, stability scores over competence…. Yes, most of my clients would rather appoint a more stable candidate than someone who could deliver much better. Period.

That said, it also made me think as to why most clients  – and assuming that these are just a sample of the whole universe – most organisations prefer to bet safe on a seemingly ‘stable’ person, leaving competence behind in the hiring process.

Could it be because of the following?

  1. The persons responsible for the hire prefer a safe bet, someone who has just been an ok and average performer, who will stay on for a while, thus proving the hirer right from having gotten a stable candidate onboard.
  2. The opposite of this – what if the decision to hire the more competent person happens to boomerang? What if he does not adopt and settle into the ‘culture’ of the current team (which is almost always masqueraded as organisation culture).
  3. Having someone who is extremely competent would means that there is a possibility that the incumbent is the smartest of the lot, and would upset the apple-cart for a whole lot of folks who are a product of the current ‘comfort zone’!
  4. Justifying the cost of the hire becomes much easier when the person hangs on for long, than otherwise. Apart from the cost of hire, numerous other HR metrics would look so good in the name of stability – cost of rehire, attrition and so on… ….expect offcourse the revenue/employee which could have been much  better with a more competent hire.

This is just a sample of what might contribute the right hire strategy of the organisation.

Little does the organisation or the HR therein realise that to have someone more competent – there also would be a need to work on appropriate engagement and ‘stay’ strategies – and this would indeed call for a little more proactive and evolved HR/leadership – than that may be needed to sustain a ‘stable’ employee.

Surprisingly, in the name of stability, is it the right thing to overlook what could have been the opportunity ‘revenue’ impact of the organisation in having someone more competent, even if it is for a lesser period of time – compare this with the ‘average’ revenues with stable employees.

And with the new gen workforce which is dynamic and organisationally ‘ephemeral’, I only think the organisations that advocate stability over competence will be the losers!

What do you think?

In HR, communication does have power! or does it??


How many of us think that performance management is just one of those annual HR rituals where a bunch of forms are shoved in across all the employee desks, with a prayer that there be godspeed in the exercise getting completed without any employee issues.

This is just a wish, and reality is far away.

Jack Welch is quoted to have said this on performance management (ranking): “Ranking has been portrayed as a cruel system.  The cruel system is the one that doesn’t let anyone know where they stand.”

And where they stand can be only clear, when each engaged employee/partner is communicated of how his contribution to the organizational goals and revenues will be measured.

A lot has been said and written about how it is important and crucial to manage performance in an organization, not much emphasis has been laid on the importance of communicating it to the members of the organization – at all levels.

This leads to a lot of confusion, uncertainty, and most of all, shock and surprise when in the middle of the year/end of the year, the employees are measured, reviewed, and  evaluated by a process which they are not even prima facie aware of.

A lot of  times, such a performance management exercise, which is truly objective and equal to all gets perceived to be biased, and partial; the only culprit in this whole event is the absence of a well laid down communication strategy – within the organization to all internal stakeholders.

That strategy which will, well in time, at the beginning of the period or year under review, state in writing to each and every employee the measures and attributes by which his/her contribution will be done.

Lack of such communication will also have an adverse impact of the really performing lot in the team. Whilst they give in their best, which would have exceeded their division and business objectives, they would see that their not so performing peers also seem to hold the same stature and growth in a ‘patriarchal’ management (perceptions matter a ton).

This can be highly dangerous to the overall health and long term growth of the company. Unless people see a visible difference between where performers will stand – higher – and where non performers will stand – lower or out of the organization – the best of  performers will desert the organization.

Communication, in the right time and in a very transparent manner (with all the measures quantified, sans any scope for bias), will be a decisive differentiator that would enable all concerned to view the process as legitimate and objective. And once this happens, tremendous amount of discipline comes by in the way everyone views the short term and long term goals. And they also know how and where they will grow within, with the kind of work they do in the period under review.

This highlights the critical nature of the performance communication process, and the time and energy the HR team, the SBU heads, and the CEO ought to spend in making this exercise possibly the best communication amongst the employees. If there is one single exercise that would contribute directly to the top line and the bottom line of the organization, it is PERFORMANCE COMMUNICATION.

The best way to do this will be to create a sort of ‘war room’ that takes care of the whole communication process – planning, vetting, implementing at all levels top down, ascertaining feedback on whether everyone had understood their goals right through. And post the actual performance process, a check on whether what happened is as per the communiqué to each of the employee.

I am confident that those organisations which do not have such a process in place will do so on a war footing!

So, does HR Communication/performance communication matter?

Employee engagement truths… who’s responsible?


Creating an engaged employee is not just the responsibility of the human resources function or the head of Human Resources of an organization. Most contemporary organizations, barring an exceptional few, leave the task of creating employee engagement to the HR head or the human resources team. the top management and the leadership teams get disconnected with the day to day rigmarole of employee engagement, thinking or presuming that it is what the HR function exists for. Nothing can be far from true and more disastrous.

Irrespective of which phase – nascent, growing or well entrenched and established- an organization is in, employee engagement is a function of the leadership and top management – the A team if you can say so (including the board), and times of challenge and uncertainty, are the best times to re-visit these fundamental tenets of employee engagement.

There is just no better time to work on building ‘employer value proposition’ than now.

The broad definition of ‘employer value proposition’ is striking a balance between the values, both the employer and employee derive from the relationship. For any organization, be it big or small, there is one (in fact ONLY) critical factor that can bring value worth more than its weight in of gold – it is to create, sustain, and grow ‘employer/employee value proposition’ by the hour, by the day, for the eternity of the organization. It will not be an exaggeration to state that the ‘eternity/successful longevity’ of the organization, is inextricably linked to how engaged the employee/the work force is.

What causes shock and a bit of dismay in any student of ‘employee engagement’ is thatemployee disengagement’ becomes a tool of first resort for the leadership of the organization, when the going gets tough.

 

The management and the leadership, which ought to communicate more than ever, which ought to engage more than ever, which ought to look at taking every single employee  of the workforce into confidence, in trying times, does the opposite – be incommunicado, shut transparency, resort to mass retrenchment, even cut on hygiene benefits, and in the quest to tide over these tough times, do everything that is a no-no.

Undoing this, when the times get better, will be a humongous challenge, and any amount of selling by the same leadership is not going to help – for every one negative step today, even four positive steps to undo later might seem insignificant.

So, more than ever before, it is today that the leadership of the organization must spend loads of time on employee engagement – for the better of the short/long term interests of the organization. Rather than get into a shell or a reclusive mode, the top leadership must communicate more, know employee concerns, address the inherent and time-sensitive insecurities and get to the pulse of every single member of the team – every issue that may seem greatly important and downright trivial should be.

Each and every decision that is taken, and impacts any corner of the organization should be communicated clearly to the employees. In a word, having a ear on the ground, to the last step should be the cardinal rule, now, more than ever. It is also leadership’s responsibility to create a proactive and dynamic mechanism, where every manager/business head/human resources function is committed to THIS style of employee engagement, in all sincerity – and a great amount of effort should go into creating a right perception of these decisions, because employee engagement is also about every measure is perceived by the stake holders.

In all this, precipitate actions could be looked at as a measure of last resort, and when they are resorted to, they also should be explained with reason to the whole workforce – unless this is done, the whole exercise gets defeated.

There can be numerous ways and methods by which what is stated in a nutshell can be implemented, depending on the team size, the line of business, and the competitive scenario – all that can be debated and a plan of action formulated on a case to case basis. And all gleanings in contemporary HR and employee engagement practices must be relied upon.

Leadership must, NOW, more than ever before be truly-truly committed to absolute employee engagement – and that will be a recipe that will sustain organizations in the long run – much longer that every single employee will be a eternal brand ambassador – the inherent value derived for the organization will be phenomenal, and immeasurable.

Are we right-sizing attrition?


With the advent of the Gen Y employee composition, attrition is one thing that keeps haunting any talent management/HR professional, in any part of the world. May be, this challenge is more pronounced for the HR pro who is in an India or China or Philippines, the famed off-shoring destinations of choice.

Too often, we keep seeing HR bodies and top employers dishing our statistics about the rate of their attrition, and how well it is contained or well within acceptable standards or international norms. One always wonders if there are any stated accepted norms which say so much % of employee attrition is healthy for the competitive survival of the organisational animal.

Here, is’nt it important that for competitive survival, rightsizing attrition would be a more appropriate and relevant objective. We must be hearing HR people and employers state that, for this fiscal we have achieved the goals of rightsizing the attrition which will have a positive contribution to the top-line and bottom-line of the organisation.

With right-sizing as a HR and organisational objective, the tasks also get inseparably tied with the performance management process, putting in place the systems for an effective performance improvement program (whatever be your organisational nomenclature) – one that is clearly focused on measurably improving individual contribution, and then planning the exit management of those whose goals and skills are not in alignment with the organisation goals.

Assuming that the Jack Welch theory on  the effectiveness of people in the organisational pyramid stands, the minimal healthy attrition rate is 10-15%, depending upon factors like the type of industry, skills sets, engagement factors and so on.

When right sizing attrition is in play, with the combination of all HR factors and tools, on the bottom percentile of non-performing or under-performing employees, the HR program interventions make some % of this bottom to move up one notch – make them  as acceptable level of performers.

Then, the resulting attrition related information gets stated like this – In our employee strength of so many people, about 200 were seen to performing below acceptable standards; thanks to our effective HR programs and interventions, we could move 70 of them into the ‘desirable performance zone’. By this, we could rightsize attrition to so many percentage, which we deem as desirable owing to factors that are unique to us an as employer!

The rightsized attrition figures also give a whole different perspective to the way attrition is looked at, from the organisational perspective.

Lets now on get to right-sizing attrition that the usual fight to bring down attrition.

 

 

HR professionals – Brand Managers! (repeat)


For so many years, it has been oft-repeated that the contemporary HR professional must be multifaceted, possess an understanding of cross-functional aspects in the organization, provide strategic direction, intent and inputs to the line managers, be capable and competent to sit on the board – in a nutshell, be not just a leader in HR, but a strategic think-tank that most across the organization can really look up to.

Times have changed, and here is the need for the new age HR professional to be a great brand manager.

A brand manager, who can clearly lay down the attributes that the organization stands for, craft a communication plans around that, and constantly iterate it, to the organization and to the outside world, which is populated by the target audience – prospective employees (internal clients), the external clients at large, and all those who matter.

Most of all, the crucial hat that the HR pro must be able to don with ease is that of a Brand Manager….  Unless he or she can be a smart and seasoned brand manager, it will be almost next to impossible for the HR Professional to win the war for talent and also sustain existing talent within – all this, amidst the intense fight for scarce talent, and a mad rush & scramble to recruit, retain, re-train, de and get the best out of people, here and now!

Creating the organizations brand value proposition can no more be just a role that the internal/external marketing team will do… the content which is so crucial for the success of any marketing program must come in from the top leadership, and it is only the HR professional who commands a place on the table, owing to the sheer cross functional value he can add, – who can drive the organizational marketing from within.

To re-phrase this, the core of the marketing program – that drives the BRAND of the organization – MUST be the onus of the HR leader in the organization.

For this, the HR leader must be one who can craft, articulate and strategize all branding efforts of the company, around the core values and messages that the organization stands for.

This besides, as for any product or service brand, the HR team must bear in mind that there is a need to reposition, re-package and re-invent the organization brand, time and again.

Its imperative to understand that the brand life cycle – call it, how much tangible and intangible results that communicating the brand can actually produce – is limited to a life cycle – as in PLC. At the laggard end of this cycle, like almost any PLC, the brand needs to re-invented, repositioned, or even completely re-launched…. This, by ensuring that the brand/organization reflects endearing values/benefits and at the same time, making the right brand noises in the right place (there is no great difference – for the outsider, a new Liril and a rejuvenated Infy or Wipro, could stand to communicate the same brand strength, energy and longevity!)

Who else but the HR leader know the so many P’s of the organization brand better than him or her….   While the internal marketing/branding team can go about the task of implementing the branding exercises, the strategic insight for the program must come in from the human resources head and the core HR team.

P for Product – the organization itself – encompassing its values, vision and mission – what the organization intends to be, and what it delivers end of the day – delivery of  not just the product or the services, but things like re-plough profits to be, the CSR program et al, the green commitment and so on.

P for Place  – the facilities, the infrastructure etc, the ambience, the kind of work culture, the hygiene issues which are unique to the company, how it can be a great place to work for a whole generation of employees.

P for performance – the performance of the organization measured by revenues and profits, can at best be the sum total of individual performances. It’s the HR’s onus to craft performance management programs across the organization to ensure the goals are achieved.

Akin to this, pick up any P component of the marketing pie, and one can clearly see the crucial role the HR leader can play as a branding professional.

As in marketing/branding any conventional product/service, promotion is the crucial P that determines win or otherwise for the marketing/branding efforts… and the promotion is continuous and consistent…  these could the the tangible and intangible benefits that the company can proffer to the current/prospective talent pool.

Besides this, branding is also about having great employee engagement tools – call it innovation in branding – how each organization has its unique EE programs in place.

The raison d’être of the HR professional as a brand manager is to create, sustain and re-create an endearing brand value proposition in the mind of the prospective buyers – here the employment market, and the employee pool, and the team within.

So, HR professionals as HR leaders in organizations are passé.  This is a new world in which every good HR professional is a marketing/branding specialist as well!

Whats your “human-stock” value?


As human resource professionals, the constant question that lingers in many of our minds is – what is this value of people and people practices that we keep listening to, in any HR meet worth its salt.

You also have a ton of theory that advises the HR professional in each one of us to use HR and financial data of the organization vis a vis the best comparable players in the industry. The constant suggestion is to do this over a period of a few years, and see what kind of value the people at the top add to the organization.

It may sound complex – but in simple parlance, the import of such analysis will be felt with this analogy-

Suppose that the market capitalization, which is the sum public stock value of the company today, is USD10b for Imaginary Inc. Assuming that this evening a couple of your senior management folks decide to call it quits and join the competition, how much will the market stock take a beating tomorrow morning when the bell rings. If the mark-cap of Imaginary Inc will be beaten to USD 9b, then, clearly that is the kind of human capital value of the person or persons whom you risk losing in a whiff.

The same can be done not just for a person in the board or senior people, but even who is perceived as a crucial human capital asset across levels.

HR leaders will do well to devise what they think are appropriate metrics to value the people, in comparison with standard industry information. This can be stock market performance over a period of time, market share of similar players, the annuated growth rate of the top 5 in the space…. The choice of data is endless, and depends on the ease plus accuracy in using them for analysis.

Using such tools will not just enlighten the HR leaders on the value of their human capital, but will also make them contributors to any people decision in the board-rooms.

Post Navigation