Power to the people

Click to follow
The Independent Online
THE MOST successful companies are those that view their employees as their best asset - and invest in them accordingly. A happy workforce is a productive one. This is the conclusion of an examination of the correlation between company growth rates and people development practices.

A new survey by Deloitte & Touche shows that the scope of the rewards from sound human resource practice may have been underestimated in conventional business wisdom. Of companies with a growth rate of over 25 per cent, the vast majority put resources into actively managing their culture.

Effective communication strategies play a key role in the success of HR management by making staff feel they are a necessary and appreciated part of the organisation. The formal communication of the company's business strategy to its employees is crucial to achieving this.

The report emphasises the weight which must be given to allowing for individuality. Personal development plans and individual objective setting are ways of tailoring targets and thus of fostering commitment among staff. "Processes like these help define what's expected of employees," said Philip Heaton, the management solutions HR practice leader at Deloitte & Touche.

Handing initiative to staff fosters individual motivation. Increasing the decision-making responsibilities of teams, their performance-monitoring role and innovative capacity all generate higher levels of commitment. The majority of companies growing by over 5 per cent a year use these methods of self-management among staff.

It would seem logical for the department managing the company's "greatest asset" to be involved in formulating business strategy. At present, however, the companies which say their HR department performs this function are in a minority.

"If people and the HR function really are seen to be making a difference in business performance, then many firms have a long way to go," said Mr Heaton. Although "some of the major themes of people management of recent decades do appear to have taken hold widely, just as important are the lost opportunities for individuals to contribute, develop and gain higher levels of satisfaction from employment. To achieve business success, companies need to recognise that highly committed and high performing employees have to know what is happening in the business and to be involved in and able to identify with its operations."

The survey 'Business Success and Human Resources' was published by Deloitte & Touche on 28 October.