HR can add significantly to the profitability and value of an organisation, particularly if it can provide solutions to vexing questions around culture, people and profitability, writes Damien Berglas
HR can add significantly to the profitability and value of an organisation, particularly if it can provide solutions to vexing questions around culture, people and profitability, writes Damien Berglas
My wife (Jane) was telling me recently that our childcare centre was seeking parents to join them on a policy committee. We thought that this was an excellent idea, however, Jane also mentioned that the person chairing the committee was quite proud of the fact that she and her colleagues had spent two hours ensuring that the exact wording of a particular line in a policy was correct and could not be misconstrued.
Whilst it was laudable that they strove for accuracy and it may’ve been important to ensure an unambiguous and considered policy, I had the feeling that they were trying to micro-control rather than provide guidance and encourage their staff to use judgment and common sense. If my suspicions were correct then their focus should have been on ensuring that the overall goals and objectives of the centre were reflected in their processes rather than prescriptive detail.
From this proposed policy committee, I thought of my own work policies and procedures. Have they remained simple, factual, and not attempted to micro-manage? Had they met legislative requirements in tone and detail? Did managers use the policies and procedures or were they sitting on an electronic shelf gathering dust? I think for the most part we have tended to provide useful guidance in our policy documents, however, I have also noticed the tendency for our policy manual to grow rather than shrink as time goes by. Does this growth make our businesses more efficient or cost effective?
Policies can also have many unforseen behavioural effects. For example, one services organisation I am aware of recently used their salary review process to state that anyone that did not reach a chargeability level would get a poor performance rating regardless of circumstance. The unforseen effect was reported to be that staff completed chargeable tasks in twice the time that it normally took them to ensure that their chargeability targets were met. Result: margins went down. Morale was also affected as those staff that had worked hard on short-term projects, but not for the whole year, also received poor ratings.
Focussing on chargeability also had the perverse effect of reducing the incentive for staff to perform when, at the beginning of the subsequent year, they found themselves ‘on the bench’ for a period of time. What was the point of excelling in the latter part of that year when they would only get a poor rating again due to the lack of work at the start of the year!
Staff in a service-based organisation need to ensure that they are profitable and productive when placed on assignments, however assessing their performance based on a single metric that they may not be able to control, has muddied the distinction between individual performance and the viability of the position.
I have no doubt that we can all relate corporate blunders from our own businesses. How can we avoid them? How can we provide the best environment to ensure maximum productivity, profit, growth and enjoyment?
Economies of scale do not always apply successfully to service organisations. As they get bigger, autonomy and control often appears to move away from the line to corporate areas – bureaucracy grows rather than efficiency.
Companies where responsibility and decision making authority happens at the work group level may be more efficient, cohesive and focussed, particularly if they can control rewards as well as costs. Flight Centre has espoused a concept that people are basically ‘tribal’ and will work hard for a small work group, whilst belonging to a larger ‘whole’. What structure do you need in place to achieve this whilst ensuring that poor performers are managed appropriately? How can you establish this in non-shopfront environments?
I have recently read a suggestion that companies should focus on their best and brightest and set up small teams to go and find novel solutions to specific company problems. The approach sounds great, so long as you are on the team and the results are applicable to your set of circumstances. Perhaps if the organisation allowed groups greater autonomy, including responsibility and control of their P&L, provided excellent communications channels and stated clear organisation goals, staff may be able to work out for themselves what were the most efficient and best methods to ensure profitability and growth.
Here are some other suggestions which may have a positive impact on service-based organisations:
1. Focus on providing relevant processes, with an enthusiasm to review and remove them once they are no longer relevant.
2. Promote an environment where managers are encouraged to use their judgment, with an understanding of policy, to focus on an equitable outcome for the individual and company.
3. Everyone makes mistakes, environments where the focus is on outputs and not errors may foster a more considered approach to risk.
4. Companies that use a reasonableness test tend to need fewer policies as context allows managers to provide equity rather than equality.
5. Managers and HR that take the time to know their staff and value their ideas tend to have lower churn and create more cohesive and productive work environments.
6. As Libby Sartain suggests, “Hire great people with great attitudes, give them a chance to succeed, grow and build their personal future within the company…”
7. Staff generally have an idea of what is expected of them (via job descriptions, stated company goals and so on) and in the first instance, want their companies to grow. They will try to put in 100 per cent and accept that salaries and roles reflect individual ability, knowledge and skill. Some staff, such as sales, require targets to be met. However, for the most part objectives are self-evident.
8. Aggressively tackle performance management to ensure that staff are given feedback quickly so that they can understand what behaviours need to change and an opportunity to discuss, modify and move on.
I believe that HR can add significantly to the profitability and value of an organisation, particularly if we can provide some solutions to the vexing question of how we get large organisations to be nimble, profitable and enjoyable places to work.
Damien Berglas is people manager for QCOM Australia. Email: [email protected]
Comments? Suggestions? Email: [email protected]
The views expressed in this opinion are those of the author and do not necessarily reflect the views of QCOM.
