Paying attention to people WILL pay off: How to get that link between better people management, increased productivity and profit.

“People are our greatest asset”: How many times have we heard that? I know from my own experience that good people management makes for good business but how many employers out there are wondering what the evidence is before they take the plunge?

There is a good deal of research that has been done to find the evidence, and it is definitely there. One particular UK study* of 67 manufacturers (average 253 people) showed a predictable improvement of close to 20% in both profitability and productivity when a range of integrated people management practices are improved.

The two key areas of people management practice they found to be significant predictors of profitability and productivity as:

1. Acquisition and development of skills – Having the right skills and abilities for your business, the right people capability and an approach/ attitude to developing capability. See learning & development as way of improving morale, job satisfaction for your staff as well as way of improving the way they do their work.
2. Job design – Thoughtful job design that provides meaningful work where possible, opportunities to take more responsibility when ready, seeing a job through from start to finish and getting a sense of achievement from work done.

Both these areas underpin what Frederick Hertzberg and his famous theory on motivation, would call intrinsic motivators:  a strong universal human need for purpose, achievement, challenge, learning and satisfaction.

The great thing about both these two key areas is that they don’t cost much. To design and implement, they require thought, planning and possibly some change to your business but not necessarily much in the way of extra dollars.

Acquisition and development of skills

The simplest form of business learning is to review business progress regularly with your staff – how did we go this week? How did we go with that new client? What worked and didn’t work? Have a regular process for review and a way of harnessing the learning and making changes to business processes that improve the whole business.

Encourage people to learn on the job, learn from each other, learn from outside – courses, visits to other businesses and learning through networking.

For acquisition, take a considered approach to recruitment, think carefully about what capability you need for now and for future and recruit accordingly . Think about how you bring new people into your business and show them how to do the job, and how to offer every opportunity for your staff to learn and to stretch their abilities and their existing knowledge.

Job design

Think about having job roles that encompass a bundle of connected responsibilities and tasks that people can say “That’s mine – I am responsible for that” and have the satisfaction of seeing an entire job done and finished. This doesn’t mean that people don’t continue working together as part of a team: even team workers have specific roles.

If you as an employer take the time to clearly spell out why we are all here (purpose of the business), organize the work (clear roles and structures), give staff some autonomy and integrated opportunities for everyone to stretch and grow. All are guaranteed steps in the right direction for happy workers, higher productivity and a profitable business.

What’s your experience? I’d love to hear from you…..

* MG. Patterson, M.West, R.Lawthom, S.Nickell (1997) Impact of people management practice on business performance Institute of Personnel and Development (IPD), UK.