People Power - 5 Steps to Increasing Employee Value
by Denise R. Chachere
Today’s labor economy faces new challenges unlike those of the past. With aggressive downsizing, increased international outsourcing of labor and burgeoning technology, the challenges of staying competitive and managing your workforce have become nearly daily media topics.
Business leaders often hear about workforce and employment issues related to expenses—e.g., “the increasingly high costs of employing Americans.” Leaders must transform how they treat human resource management and turn this negative view into a positive one where they make investments to infuse value into every decision and sustain a competitive advantage.
Last month, best-selling author and internationally recognized management consultant, Dave Ulrich (www.rbl.net), outlined the action plan during the Human Resource Management Association (HRMA) of Greater St. Louis’ strategic symposium. Using his latest book, “The HR Value Proposition,” as a backdrop, Ulrich discussed how human resource professionals can add substantial value to the accomplishment of their organization’s overall goals.
Ulrich, who has worked with many Fortune 500 companies to assess and improve their effectiveness, engaged the audience in a discussion about the most prominent challenges facing businesses. With these in mind, he focused on the understanding of value, how it is defined and achieved. The fundamental messages were that “value is defined by the receiver more than the giver,” and that all business decisions, particularly those relating to human resource management, should be made within the context of creating value for all stakeholders.
He provided an overview of the HR Value Proposition Model, outlined the five factors for creating value and reinforced how to manage the most important asset—people.
1. Knowing external business realities—Put human resource practices in context, tie them to competitive challenges and relate them to concerns facing your managers. These factors include, but are not limited to, technology, regulatory and economic dynamics, demographics and globalization. Ulrich recommends that HR professionals learn their business from the perspectives of the other disciplines leading the company in order to be real—not declared—business partners.
2. Serving external and internal stakeholders—Value is defined by the receiver—customers, investors, line managers and employees—of human resource efforts. Deliver what matters most to stakeholders—deliverables rather than activities. An effective HR function:
* Increases customer value by building long-term connections with target customers.
* Helps managers deliver on strategy by building workforce capabilities.
* Establishes a clear employee value proposition and improves individual abilities.
* Builds shareholder value through intangibles by managing expectations and employee engagement
3. Honing HR practices—Create practices around people, performance, information and work flow to help an organization shape its identity and culture. Such practices will deliver value to internal and external stakeholders when they are aligned with the organization’s goals and stakeholder expectations. For example, an effective HR function manages:
* Performance practices by setting standards, allocating rewards and providing follow-up and feedback. Make sure you reward the behavior and results that matter long-term for your organization.
* Information processes and workflow design consistent with adding value.
4. Building HR resources—Think of your human resource function as if it were a business within your business, Ulrich says. Create an HR strategy that will turn business goals into HR priorities. Organize the HR function so it aligns with the organization’s goals.
5. Ensuring HR professionalism—For organizations large enough to have a dedicated human resource function, each HR professional must play his/her role, master competencies and deliver value. The roles are what people do; competencies define how they do it. Through investments in training and development experiences, demonstrate the right HR competencies such as:
* Personal credibility—achieve results, be effective and possess excellent personal communication skills.
* Strategic contribution—affect culture, respond promptly to change and employ strategic decision-making.
Now, more than ever, business success comes from the workforce, and the recipe for human resource management success is the value proposition. Ensure that all stakeholders are impacted positively in every interaction with your organization to keep them coming back with open wallets to buy products and services and/or make investments in the organization.
Carnival of Careers in Middle Age #3 has chosen this article as one of its “best of the week” (May 20th) picks. You can see it and many other wonderful, inspiring and informational articles at Wesley Hein: Lifetwo.
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