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The Question of Accountability

Guest post by: G.J. Miller

Article Overview: Human Capital is the only asset that has the potential to appreciate in value whereas most assets depreciate over time. There two key groups that impact the value of your people and both must be business savvy in order to understand how to leverage this asset for the best results possible. They are Managers and Human Resource Professionals.

The Question of Accountability

What is the biggest cost in your business? PEOPLE

Who is accountable for this cost? PEOPLE

How do you ensure accountability for the biggest 'bang' for your buck? STRATEGICALLY MANAGED METRICS

Human Capital is the only asset that has the potential to appreciate in value whereas most assets depreciate over time. There two key groups that impact the value of your people and both must be business savvy in order to understand how to leverage this asset for the best results possible. They are Managers and Human Resource Professionals.

People as Assets

Your Human Resource Professional should be involved in the development of the business strategy, contributing by pulling together an HR strategy that will complement the business strategy and overarching goal achievement required. HR and managers must identify key changes required in the people contingent in order to prepare the workforce to deliver. This encompasses such things as a workforce plan (ensuring the skills required are hired or 'ready' when needed), training, compensation plans (salary, incentives, stock options), program design that will motivate (performance coaching, benefits, paid time off) to name a few. The actions required should be translated into a cost/benefit business proposal for senior executive approval each year.

HR must partner with managers to design and develop the programs needed. If we assume managers have the technical and behavioural skills to lead, and your Executive has created the overarching business strategy and goals, managers become responsible for rolling out the plan, implementing new policies, programs and practices, motivating, removing barriers for their staff and monitoring. They become the coach for their team.

Developing Key Metrics For Those Impacting Employees

In keeping with the philosophy of “you get what you measure”, people responsible for people need to be held accountable for their results. Metrics can be developed that will clearly demonstrate the success achieved in managing your most valuable, and expensive, asset for managers and hr professionals.

Here are just some of the metrics organizations use to hold managers and hr accountable – and reward their good work.

Time to Hire

How long does it take HR to bring candidates and managers to make a decision? It costs the organization money for every day a hire is not in place. Determine the daily salary of the leaving individual and add lost productivity or lost sales costs for each day + daily cost of recruiting for each position (postings, advertisements, recruiters) * the number of days a position is vacant.

Turnover

The annual turnover rate as a percentage = Number of Separations within th eyear/average number of employees during the year * 100. This calculation can be done for the overall company, and can be calculated for key groupings such as top performers, key skills groups, those leaving within one year of employment, reason for leaving and department. Some organizations choose not to include retirees in the calculation, as retirement is more often planned than not. No matter how you break it down this is a key indicator. Each department or functional manager should be accountable for his/her own groups turnover rate broken down in the ways described above. HR could be assigned the metric of those leaving within one year if it was a poor culture fit or mismatched skill set.

Performance Management

Statistically, it is impossible for each and every employee to exceed all expectations and goals. Some do but most do not. Performance generally follows the bell curve with most people performing just below, at or exceeding some goals and meeting others. Individual salary increases should reflect and differentiate between performance levels. Holding managers accountable for performance ratings and salary increases that are equitably distributed motivates employees and keeps costs within budget.

Setting goals and tracking results on an annual basis for employee performance, development and costs for managers and human resource professionals is just good practice.

Employee Communication

All the best programs and good intentions lose their effectiveness if employees don't know about them or understand them. Helping employees understand corporate culture, strategy and goals – and how they can impact their success (their own personal metrics) makes for successful and motivated employees. Having a good communication strategy that HR and Managers are accountable for delivering on keeps the organization running at a high performance level.

All of these areas can be measured mathematically. Other alternatives are employee satisfaction surveys and exit interviews. For example, incorporating data from these sources can not only indicate issues by department but provide insight into whether the programs you have in place are working well or valued by people.

No matter how you do it – doing it will only contribute to your company's success.

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Article Tags: accountability, human resource professionals



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