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MAXIMIZING YOUR RETURN ON PEOPLE

Summary :
Over the past decade, a system/framework has been developed to assessing human capital
management (HCM), benchmark organizational HCM capabilities, identify HCM strengths and
weakness, and link improvements or backsliding in specific HCM practices with improvements
or shortcomings in organizational performance.
Measuring Management
There is a survey to measure employee and management used by organization that categorize
HCM drivers into five major categories: leadership practices, employee engagement,
knowledge accessibility, workforce optimization, and organizational learning capacity.
Proof in the Performance
1. Improving sales and safety at American Standard Companies;
2. Raising test scores in South Carolina schools;
3. Increasing returns in financial services.
Assessing Yourself
The HCM evaluation approach is used iteratively: An initial assessment indicates the HCM
changes that should positively affect performance; performance responds to the changes;
HCM practices are reevaluated, leading to further rounds of suggested changes; and so on.
As organizations and their environments evolve, the key HCM factors that drive performance
may shift. It’s important to regularly measure and adjust HCM practices and correlate them
with organizational outcomes.

Two types of data are necessary in order to perform such an analysis: measures collected
through employee and management surveys that can be used to quantify HCM performance
and measures of organizational performance.

HCM data capture and analysis proceeds in three steps :


Step 1. Employees and managers are surveyed to quantify variations in HCM maturity across
functions, business units, regions, and job categories and also to document
organizational HCM strengths and weaknesses.
Step 2. Variations in HCM maturity are linked to variations in key organizational outcomes,
either financial or nonfinancial. This step identifies which HCM factors are most
critical to organizational performance.
Step 3. Findings from the first two steps are then used to identify the HCM factors that
significantly drive organizational performance as well as those that also represent
areas of relative weakness. The results of this analysis will highlight where the
organization should concentrate its HCM development efforts.