"Maximizing Your Return on People"
Harvard Business Review
March 2007, pp. 115-123
Over the past ten years, the authors of this article have developed a set of 23 "Human Capital Management" (HCM) elements that predict performance across a broad array of organizations and operations. These elements fall into five major categories: leadership practices, employee engagement, knowledge accessibility, workforce optimization, and organizational learning capacity. A survey (included in the article) has been designed to assess an organization on its "maturity" in each of these 23 elements. Empirical research has shown that different elements have varying degrees of importance in different companies.
Under "Leadership Practices", the elements are:
- Communication—the extent to which the communication of management is open and effective;
- Inclusiveness—the extent to which management works collaboratively with employees and seeks the employees' input;
- Supervisory skills—the abilities of Supervisory management to provide feedback, remove barriers, and inspire confidence;
- Executive skills—the abilities of Senior Executives to provide feedback, remove barriers, and inspire confidence;
- Systems—the effectiveness of leader development and transition systems.
Under "Employee Engagement", the elements are:
- Job design—the extent to which the work taps the skills of employees and is well-organized;
- Commitment—employees are recognized, their jobs are secure, and the possibility for advancement exists.
- Time—Employee do not regularly suffer from quantitative work overload so they can do their jobs well and have work/life balance;
- Systems—There is a continuous evaluation system for employee engagement.
Under "Knowledge Accessibility", the elements are:
- Availability—Job-related training and information can be readily accessed;
- Collaboration—Teamwork is encouraged and enabled;
- Information sharing—Best Practices are shared and improved;
- Systems—There are good systems for collecting and disseminating information.
Under "Workforce Optimization", the elements are:
- Processes—Well-defined work processes and effective training;
- Conditions—The physical and social environment supports high performance;
- Accountability—High performance is expected and rewarded;
- Hiring—Skill is the primary hiring basis; new hires complete a thorough orientation;
- Systems—There is an effective employee performance management system.
Under "Learning Capacity", the elements are:
- Innovation—New ideas are welcomed and encouraged;
- Training—Training is practical and supports organizational goals;
- Development—There are formal career development plans for employees;
- Value and support—Leaders show through their actions that learning is valued;
- Systems—A learning management system automates aspects of training.
Findings from the survey can be used in conjunction with performance measures to identify the HCM factors that are most important in driving business outcomes. The organization should focus its HCM development efforts in these areas.
Back to top of page
