There are many pillars of capital in a business, but the primary four pillars of capital in any
successful business are Finance, Intellectual Property, Physical Assets and Human Capital. It is
like a table with four legs, if you remove any of them the table will fall down. Businesses typically
tend to focus on the first three, however perhaps the most important is Human Capital, the people
who operate the business, without them there can be no company.
Ownership of the company is responsible for managing all four capitals simultaneously through
their organizational structure, and the HR Management (HRM) team is responsible for precisely a
quarter of the business capital. Frequently businesses do not recognize the importance of the
Human Capital and the “people problems” are often relegated to HRM, who then become
expeditors of company policy rather than the drivers of growth. This must change, and in order for
that change to happen there must be a high level conversation between business owners and the
people responsible for people: the HRM team.
Here are our top 5 thoughts for 2019 HR Management teams to think about:
1 Effective Communication Process
HRM must drive an effective communication frame of reference within its organization. They must
ensure that there is a proper system of communication meetings and a process for ensuring
implementation of decisions taken at meetings, at all levels of the business.
Mission, Vision and Values must exist and be living, credible documents within the company. It is
HRM’s responsibility to ensure that these documents are an integral part of the operating practices
of the business. With these in place then an authority matrix must be developed to ensure clarity in
all decision making issues, and from there onwards a structure of communication meetings must
be implemented. The key communication meeting is an executive meeting, which ideally takes
place once per week at a fixed and inflexible time. The executive meeting is the mechanism
through which the mission, vision and values are constantly shared with the leadership team.
Each business is different, and frequently the executive committee process is relegated to second
place in the light of operational needs. The weekly executive meeting is not an optional extra but
an essential necessity. HRM must ensure that a weekly executive meeting is instigated and
maintained, irrespective of the operational activities. It must consist of a leadership team and
designated deputies who may step in during the absence of any one of the team. The meeting
must include the chief decision maker, the financial controller/CFO, HRM, Sales & Marketing
Management and Operations Management. HRM is responsible for ensuring that there are
minutes of the meeting with each point in the minutes having a person responsible for ensuring
execution and a due date. HRM must circulate this information before each meeting and follow up
on the day of the meeting with an after meeting action list. HRM is also responsible for ensuring
that each member of the Executive Committee conduct a similar meeting within their own
department each week where they communicate the relevant sections of the Executive Meeting
with their management team, and finally, that each of those meetings have a similar method of
sharing an agenda and follow-up report for their department. The Executives populate the Excom
Meeting with their feedback from their team meetings.
2 Human Capital Development Plan
Every business must have a growth plan for every employee. At the Excom level HRM is
responsible for developing a quarterly program for Executives to grow and learn. This type of
growth should be driven by bringing in external experts who can provide learning experiences for
the senior team. External learning opportunities for executives have never been more available,
and the choice of programs for executives is wide. Certifying executives with EMBA’s and similar
high level programs is a prerequisite for having a professional, expert team guiding the
organization.
Department heads are often overlooked in terms of their personal growth. HRM must ensure that
departments heads are learning new skills at least twice a year. These managers are the ceiling of
the performance of the company, as they manage the day to day operations and are the true
problem solvers. By engaging department heads in learning and growth programs the organization
thrives and the managers’ intellectual capacity is constantly improving, ensuring better maturity of
decision making and a culture of ongoing growth.
Training for front line and operational employees is vital to excellent customer service and smooth
operational practices. Through an ongoing training plan each employee feels a greater sense of
commitment to the company and an increased level of participation in the performance of the
business. Front line employees should be integrated into an overall development plan that focuses
on raising up new leaders from within the organization.
3 Relevant Performance Management Process
For the past century companies have evolved using a template of annual performance reviews.
This is now outdated. No one should wait a year to know how their performance is perceived. They
need up to date instant information about their contribution to the organization. Most HRM throw up
their hands in horror at this suggestion because they come from the general school of thought that
we must measure everyone once a year. The primary purpose of annual reviews was created to
drive the payroll decisions about increases. This is outdated. Constant ongoing reviews are in
reality already an existing part of management, if your performance is flagging someone will say
something right away. The disciplinary process in most companies is well established, with
managers instantly correcting employees who fall short of expectations. So what would the annual
review show that an employee is not already aware of? The typical annual evaluations ask such
questions as “commitment to team goals”, “overall effectiveness”, “ability to work in a team” etc.
We all know these measurements by heart. They are useless. We do not need to measure these
once a year, we need them to be living values that employees work to every day. Anyone not living
out these values will immediately be noticed by their manager and corrective action will be taken
instantly, not at the end of a year.
So what should we do? Make sure that we have an effective system for encouraging employees
for doing good work as and when they do it. This raises the question of how we should tackle
employee increases. At Done! We recommend that employees receive an annual raise on their
birthday. This annual raise recognizes the length of time they have committed to the company and
results in across the board standard increases each year. Generally, employees are obviously
performing their work acceptably well, otherwise they would have been subject to coaching and
counselling, so we suggest that every employee will get an increase on their birthday each year
that rewards their ongoing commitment to the company and that falls in line with company
performance.
Ongoing performance goals for each manager that are measured against their ability to attain
goals is the best way to evaluate their contribution. If a proper communication system has been
implemented where each manager owns action points from their weekly meeting, then these tasks
can be measured. By accumulating the tasks required from each manager on an ongoing basis,
and his or her ability to deliver quality results on time, then we will have visibility on the ongoing
effectiveness of managers and be able to coach and guide their contribution to the organization.
Therefore evaluations are ongoing, negating the requirement for annual reviews.
4 Outstanding Rewards Program
There are employees who provide outstanding results. When they do, they should know it and be
rewarded for it. This takes effort to provide a great rewards program for employees. Employee of
the Month is a dead concept as it is very subjective, and often excellent employees will win it
repetitively and poor performers will be discouraged. Create a rewards program that is related to
employee tasks. Remember, there are multiple employees who are performing their work in non-
visible roles; such personnel are often overlooked for their wonderful daily performance by virtue of
the fact they are unseen. Creating great team reward programs that include all team members are
a way of encouraging everyone to contribute at the highest level. Maintenance team members,
production team members, admin team members are all integral to the success of the business but
frequently not recognized. By creating team rewards for successfully delivering work will ensure
that each person in an organization is part of the team performance and gains meaningful reward
for their tasks. Team outings, team parties, can form part of these rewards.
5 Efficient Policy Making Process
Missing processes cause the most pain in organizations. The one policy that must be first and
foremost in HRM work is to ensure that there is a process for creating policies. This process must
be able to accommodate the changes and growth of the company by facilitating the ability for all
senior team members to instigate new policies. It sounds simple but rarely exists. Email
notifications and Whatsapp messages/groups are not efficient ways of creating sustainable policy.
Whenever a new policy is required HRM must encourage the rapid creation of the policy.
Frequently great ideas get lost because a decision maker procrastinates. This destroys the
organization from the inside. A visual diagram for how policy is created in an organization should
be created by HRM and made available to all managers enabling them to grow and develop the
entire organization instantly from the inside out.
HRM, your role has never been more important. We urge you to take control; take action and grow
and develop your people, so that they grow and develop your company.