Improving business performance through effective people management
by Tom Hadley

During the course of the recent football World Cup in Japan and South Korea, commentators, journalists and self-appointed luminaries from the local bar were all agreed on one thing. This was the World Cup of surprises where well led, dynamic, highly motivated and perfectly organised teams from lesser known footballing nations regularly outperformed the billion dollar superstar brigade.

What we saw was a demonstration of what can be achieved by installing a common purpose through strong leadership and getting the best out of each individual. Within this context, the sporting arena once again provides a useful analogy for the world of business where the question every organisation should be asking is 'how well are we really managing, developing and motivating our people?'.

The dissemination of good practice in people management forms an important part of the CBI  's work. Evidence suggests that there are four aspects that organisations should particularly focus on: leadership & culture, employee development, work organisation and employee involvement. This article examines some of the findings and examples of good practice from ongoing benchmarking activities in these four areas.

Leadership and culture

A recent report from the Chartered Management Institute concluded that high quality management and leadership skills are in short supply throughout the UK workforce.

The CBI's people management benchmarking and evaluation tool HEADSTART has provided some extremely interesting feedback in this area. The tool is based on facilitated discussions with a cross-section of employees, which makes for some extremely lively and informative sessions.  The first questions the group are asked to address focus on the overall perception of the leadership team and on whether there is a genuine strategic emphasis on people management. In a majority of cases the overall feedback is that the right messages are given but not consistently followed through by action and coherent policies.

Evidence of a genuine focus on people management can include board members with responsibility for people management issues; a regular slot on senior management agenda's to discuss people issues and recognition as an 'employer of choice'.

Feedback from the ongoing HEADSTART initiative indicates that internal communication is often one of the key issues together with variable people management skills within the different leadership echelons of an organisation. Certainly, companies are increasingly aware of the need to enhance the people management skills of line managers, for example.

So, how are companies presently identifying tomorrow's leaders at all levels within an organisation? The need to look beyond an individual's current knowledge and experience and focus more on potential for future development is increasingly recognised. For example, is there a propensity to lead, receptivity to feed back, adaptability, an aptitude for strategic and conceptual thinking. A recent CIPD report  - 'Leadership the Challenge For All' - highlighted courage and an ability to inspire as some of the characteristics that employees looked for in their leaders.

The leaders of the future will have to adapt to constantly changing business strategies, increasingly fluid organisational structure and an increasingly global remit. At the same time a sound understanding of people management issues will continue to play a key role in developing, retaining and involving employees in order to enhance organisational performance.

Employee development

How can strategic employee development be achieved? One example is the four-stage process for training and development outlined below which is based on one of the most successful and widely recognised means of achieving effective training and development - namely, the Investors in People (IiP) Standard.

• Commitment: Evidence of this can include a written mission statement, employee bulletin boards, news sheets and the disclosure of training in annual report.
  
  
• Planning: This entails a specific training budget, a formal training plan and individual action plans.
  
  
• Action: This will include on and off the job training, mentoring/coaching, distance learning and employee development schemes.
  
  
• Evaluation: This will include post-training customer evaluation questionnaire, individual learning action plans, appraisal systems and cost-benefit analysis.

In addition to the formal training programmes, organisations need check whether best use being made of other means of employee development. Speaking at the CBI's recent International HR Exchange conference, Professor Paul Evans from INSEAD noted that the one element often overlooked by companies is the need to provide employees with new challenges in order for them to develop. An example of positive action in this area is the increasing use of international assignments as a means of providing this kind of challenge.

Employee involvement

The tangible benefits of a strategic focus on employee involvement include a climate of openness and trust, an understanding of organisational goals and opportunity for employees to influence decisions which affect them.

Perhaps the most important issue for organisational performance is the encouragement of employee-led innovation. Improving the organisation's structure and activities, from day to day tasks to overall business performance, will require a management ethos which encourages employees to play an active part in assisting decision making.

Based on feedback from the CBI's people management tool HEADSTART, examples of good practice in this area include:

• A clear mission statement and information policy, which highlight the company's commitment to employee involvement.
  
  
• Specific information methods such as bulletin boards, newsletters, intranet sites, regular briefings and communication audits.
  
  
• The consultation process involves establishing means of exchanging views at a group/team level as well as through staff associations, elected employee representation and works councils.
  
  
• Employees' involvement in the management of work can include team briefings, quality circles, ad hoc problem-solving groups and formal suggestion schemes - reinforced sometimes by financial rewards such as suggestions bonus and gain sharing.
  
  
• Management feedback and action where appropriate is of course vital in creating a genuine culture of employee involvement.

Overall, employee involvement can result in better ways of working, efficiency improvements and positive attitudes from all employees.

Work organisation

Academic research clearly shows that raising skill levels, focusing on individual job design and effective teamwork are the keys to improved performance. But, perhaps too much attention has focused on using financial reward as a driver for increased productivity and flexible pay rather than on getting the basics right.

The organisation of work is inevitably at the core of effective people management. Key issues include the level of autonomy and employee discretion that is afforded and the necessary physical resources available to enable employees to carry out their work effectively. Flexible working patterns can also improve performance and many organisations are now seeking to implement flexible working time in order both to accommodate the needs of individuals and raise productivity.

The benefits of effective work organisation are often very tangible. For example, if the situation demands it, are your workforce willing and able to take on a wide range of assignments? To what extent do employees 'step in' and assist colleagues without explicit requests from management, ie "go the extra mile"? Multi-skilling is often a pre-requisite.

Beyond the pure 'people are our greatest assets' rhetoric it is clear that an increasing number of organisations firmly believe that effective people management is vital for overall business performance. Within this context, benchmarking and evaluation tools such as HEADSTART play an important role in enabling organisations to 'feel the pulse' of their workforce and to monitor the effectiveness of current policies and practices. Continuous improvement and change management are recurring themes within the business world and one thing that recent World Cup proved is that no team, no organisation, can afford to take anything for granted.

For further information on HEADSTART contact CBI Benchmarking Support on 4 or visit www.cbi.org.uk/probe.