Most business owners think profit is the most important indicator of success. But what matters to become profitable is not how much money your company makes but how well your team works together.
To archive corporate success, employees are your single most important resource.
Nevertheless, human resource management is the forgotten zone in many companies. But why is it so bad for your business if you don´t invest in your team? And how to find human resource problems in your company and learn how to build a successful team.
Why are companies failing without investing in their team?
The importance of human resources (HR) is acknowledged but rarely appreciated. Often business leaders ignore team issues and focus more on cost efficiency. But it´s a crucial element to determine if your company will grow and thrive.
This is why you need to know what’s good and what’s not in your personnel management strategies.
Organizations that constantly improve personnel strategies do better than businesses that ignore them. If an organization wants to be truly successful, it needs to integrate HR planning in the organizational strategy. Every company has to build a strategy to archive goals, and for this, a business needs available resources.
Here is where the human resource management comes in because employes are the most important resource of an organization. No HR departments are not only hiring and firing employees. The HR managers are responsible for much more like acquiring, training, appraisal, and composition of a companies employees. They also deal with health and safety concerns.
Businesses depend on both quality and commitment to employers, which makes it important to not only know the connection between effective marketing and revenue decisions. But also the link between human resources and financial success. So if you integrate human resources in every decision, you can improve your financial performance.
Figuring out the real problem
For measuring success, most companies simply look for data. But to learn what your human resource problems are, your company needs not only to look for numbers also for some deeper issues.
So if you want to make better decisions, you need to find the issues behind the numbers.
Understanding LAMP (Logic, Analytics, Mesures, and Process) means you have to discover the logic behind a problem by searching for a way to measure it and analyze the data and creating a process to respond to issues that you´ve found.
You need to identify the cause and consequences of certain problems in your business. When you view the numbers, you see some employees often get sick. But not all people are missing have personnel illnesses, which is why you need to look deeper. Factors like family and personal problems, stress, and or other mental issues contribute to a high absence rate. But to know if these elements are important, you need to establish a logical framework to understand the gravity of the problem.
As an example, employers that are missing at work can´t complete their jobs, so other employees have to fill in. It either reduces overall productivity, or it results in work not getting done.
What does this mean? Of course, uncompleted work means higher costs for you. So if you reduce the absence rate, you also have lesser costs. It shows that it is logical to look for the bottom absenteeism.
If you found your HR problems now, it´s time to start measuring.
A data without analysis isn´t a good assumption as well isn´t useful for a great HR strategy. You shouldn´t make conclusions too soon because a quick look at the data might misleads to establish wrong insights. These mistakes can cost your business a lot of money.
When data shows that stores with happy, cheerful employers are in correlation to higher sales. You might think about to reproduce this in other stores by investing in a training program to improve employee attitudes.
The program might be expensive; the effect is worth it because it will boost your sales. Right?
Not really. It can be that employee’s morale is high in certain stores, but this is only the case because customers in specific places spend more. Which in this example, your training program would be expensive and wouldn´t impact your sales.
So it is important to do a proper analysis before you take action. This can often be a complex and detailed analysis that only be made by a specialist. All HR manager must have a basic understanding of the analytical method. Any specialist you hire for this process needs to know the necessary background information of your company like structures, what certain employees do, and changes that have not been considered before.
There is a whole range of metrics for human resources, but managers need to keep in mind what the problems are.
A goal that decreases employee turnovers will be something worth archiving. Employees will be more experienced, and lesser time and money are needed to find and train replacements.
However, only measuring turnover rates won´t give many insights.
A simple plan is to decrease this rate by lowering the required skill level for a company position. It will help that more candidates will apply for this job and become more desperate to stay at your organization. But is the right strategy?
No, you can´t create a better strategy with one simple data point. If you want to understand the issue, you´ll to measure more carefully. For the turnover problem, it is more efficient to calculate turnover rates by the department and by position.
It gives you far more interesting results when you measure more targeted.
A conclusion could be that larger turnover rates of higher-level positions are hurting the company more. But for a lower level, these rates aren´t as important, as it might be because new employes earn lesser money and have fewer holidays when stating.
With this knowledge, you can improve the conditions for a more valuable position and investing lesser resources in the rest. However, what really matters is if this will keep all employees happy. Probably not.
When you have found a good mix of logic analysis and measurement tools, you are on the right track to solve human resource problems.
After the research, you need to ensure your business benefits from the newly gained insights. All company managers have to be on board to make the HR process a success.
When you make decisions with these insights, you have to keep in mind the focus and priorities are different for each branch.
For a sales team, the sales numbers are important while the production department is more interested in efficiency and reducing waste. Team managers also have different processing and understanding of information in terms of job priorities.
If you introduce a new program that guarantees to increase sales, you get the attention of your salesman. But when you showcase that customers are equally important, your sales team might lose interest.
You and your company manager need to actively engage and communicate with focusing on what is best suited for their knowledge. Build on what your team already knows.
As an example, many managers use a lot of their energy on profitability and costs. Why not make a pitch by using analysis for the cost you have when you produce bad quality products.
This might grab their attention, and when they are hooked, you can introduce more complex analytical data that they are maybe less familiar with.
For example, you can outline a basic turnover cost analysis to your audience; it will help managers to understand the link between decisions made in Human resources and the company results.
And when you make this breakthrough, you explain in more detail the logical measured analysis you performed. So each team learns why the new strategy is a win for them.
HR managers have to stay up to date on best practices by reading relevant publications regularly.
When you use the LAMP framework, you ensure you find the right problems in your overall human resource strategy. Using the logic and considering the metrics to get relevant data and powerful analytics will find you the solution you need. With the right human resource strategy, your company will see a difference in productivity and profit levels while keeping your employees more happy and healthy.
There are times an HR manager needs to fire people. It is a good idea to make sure the employees know the reason when its poor performance or behavior let them know it will help the person a chance to improve in future jobs. Follow the standard procedure of organization if you fire someone to avoid claims of violation of a contract.
Finding the right people for your team
If found your human resource problems, it maybe is the case you need to hire new employees for your company.
A human resource department will generally get a hefty budget from the company to spend on things like salaries and benefits. But if a business fails to integrate its HR planning in the overall strategy, arching broad success will be hard.
Though when a business, for example, hasn´t made a strong benefits package for both current and future employes, there might be a struggle to find the high-quality talent the is needed.
However, updating HR on all organizational targets will help the department understand what roles different employees have in archiving the goals. It is the first step to know whether if your company has the right people or who is missing that need to be hired.
Nowadays, you have to keep your competition in mind when attracting job applicants. With the internet job, seekers have much wider access to open positions, which they also can see offers from the competitions when a person searches for a job. And even bigger selection have employment on platforms like monster.com.
So one way or another, you have to deal with your competition as you need to think about why job applicants should choose your company over someone else. It means you have to clearly show the benefits you offer and outline exactly why working for your business is great.
Once you get applications, you have to decide who you want to invite for an interview by looking and reviewing through resumes and comparing them to specifics of the position. And maybe do a short interview over the phone.
It is important that you understand the position you are hiring for it means to know what is expected from new applicants, what goal they need to archive, and what skills are essential for the job. When you covered this basis, you can determine important requirements like the applicant’s qualifications and what salary he might expect.
Of course, when they don´t meet the basic condition, it may not be the right person for an interview. But even if the candidate doesn´t have all the qualifications, it might be someone to invite to your company as you never know how it turns out when you talk in person.
When you found interesting job candidates, you can conduct a behavioral interview. This type of interview is for learning about applicants’ past performances; it is the best indicator of how they do in the future. You need to formulate questions that give you an idea of past performances and show if the candidate is a good match for the position or not.
If you want someone flexible and adaptive, you can ask: did you ever changed rapidity between tasks, and how do you handle it?
Make sure to use a place for an interview where job candidates feel pleasant and comfortable and carefully inspect the environment the applicant is walking into.
What happens next when you found the right person for the job?
When you hire a new employee, you should always make a good first impression as this will last.
A new employee needs to learn the basic facts of what your business does to know what work he is hired for. The orientation isn´t just a short overview of the company; rather, it showcases several key objectives. Make sure the new person understands the organization in terms of its history, corporate culture, and vision. And in a more detailed sense of how certain departments operate and how specific processes work.
Incorporate the new hire into the company and make sure he’s onboarded properly, and the employes feel welcome in your organization. This will increase the chance that the person stays at the organization.
Another fundamental step in the hiring process is training; it is essential for both the business and its employees. There different methods and forms depending on the needs of a specific position. For a company, it important to invest in all types of training to improve employee’s professional skills.
A new job candidate needs to acquire the knowledge necessary for the organization at this moment. For a service responsive, it could be how to provide effective and friendly customer support.
While people that work for a long time need additional training that adapts new changes, and behaviors the business needs, it might be something like training a group employees to be better team players.
It is recommended to track the training program in term of effectiveness, which can be done with the four-level model:
- Level 1 reactions. Identifying the responses of employees to the training if they liked the material and how relevant it was.
- Level 2 learning. Is skill increased with the help of the program? This can be archived by making pre and post-tests to see if there is any change.
- Level 3 transfer. Finding out how much new skills can be transferred to the work of the employees.
- Level 4 results. What are the results of the training? In terms of increased quality, sales, and any other measure that can be tracked.
Even if the learning program was ineffective, you can change and improve it the next time.
Also, monthly employee evaluations, when done correctly, are huge benefits for your company and teams. But what do you need to do?
Firstly start by telling employes about the new organization’s goal it can increase their productivity. The sense of purpose and vision can motivate.
This review will also be useful for management skills and to build a better connection with the companies staff. And finally, it gives employees the idea of how they´re doing and what changes they can make to improve themself.
To do a performance evaluation correctly, you´ll need to give both positive and corrective feedback.
Positive feedback should be given out with accuracy and with specific information at the right time. So not on the way to lunch or a meeting.
Corrective feedback is a bit more challenging, but it gets easier if you use the acronym BEER (Behavior, Effect, Expectation, and Results).
Start by addressing what exact behavior is problematic and explaining why it has a negative effect on the company. And what you expect instead. To close this constructive criticism, you can tell the employees positive results will come if he changes this behavior.
Make sure to find human resource problems by using the LAMP framework to know what needs to be improved. This will help you to integrate human resource in every company decision.
When human resource management becomes a core aspect of a company and is integrated into daily work, the business will thrive and get more profitable and successful.
Of course, true success comes only if the organization invests in good work culture to archive more happy and motivated employees. This is why it is a good idea if you need to hire new talent to ensure everybody feels welcome in your business regardless of their culture, knowledge, skills, and abilities.
It will also help to become more sustainable when the focus is not only on the economy but as well on society and environment because this is what makes a company last for generations to come.