In business there are two very necessary and very different forces which must be balanced so that business will perform perfectly - people and processes. But far too often they are not in balance.
CEOs are ranking people issues as one of their major concerns in 2005 as they struggle with productivity, profits, and labor shortages. Robert A. Cameron & Associates takes a new approach to quantifying and solving this growing business issue.
This is a critical issue as people have a very real financial impact. Even if you have every process of your business working perfectly, people problems can still be the difference between profit and loss.
Thats exactly what a summary of eighty-five years of research has shown very clearly. Frank Schmidt and John Hunter two of the foremost experts in personnel productivity and psychology reviewed dozens of studies on the impact people have upon the success of organizations. One of their most interesting findings is related to productivity.
What their research showed them was that for every job they reviewed, about 16% of the people in any job fall into the superior category, 16% in the poor performer category, and that the vast majority of people were average performers. However, the most significant finding is the difference in employee productivity. It ranges from a 38% boost from a poor to superior performer in an unskilled position to a 98% boost from poor to superior in management positions.
Robert Cameron examined how the differences in the productivity in each category affect a company financially. Using a company size of about 75 people, his conservative estimate of the cost of having average versus superior performers is around $800,000 per year. What is the easiest strategy to improve the bottom line?
First, do whatever it takes to move poor-performers out of that category and into the average category. Your second objective would logically be to start moving your average performers into the superior category. And then your focus should be ensuring that you do all that you can to maintain the situation where all of your workers are in the superior category.
This approach provides you with a firm framework for effectively managing one of your largest investments your human capital in a manner that ensures that return on your investment are maximized through focus on clear measurable objectives.
To avoid unnecessary people costs, you must be sure that every time you make a people decision whether you are hiring someone new, moving someone from one job to another, promoting someone, or investing in training or development you are doing so with a view to achieving superior performance in the target position.
But how do you do this and why do some people perform at a superior level and some dont? That factor is Job Match.. It has to do with matching people with work that fits who they are; their unique combination of abilities, temperament, motivation, and other intangible human qualities.
To achieve a good job match you should use employee assessments to improve your selection process. The cost of using assessments is offset many times over by the gain in employee productivity. Hiring more people like your best people gives you more superior performers, and greater productivity and profits. |
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