What’s in Your Human Capital Management Strategy? Driving Business Solutions with Performance-Based Outcomes, Part 1 of 2

By Kim LaFevor

Are We Satisfied with our Business Outcomes?

Are you fully satisfied with the level of performance you see in your own organization? Does your organization have what it takes to perform at the highest level within your market segment? Would it surprise you to learn that if you answered these aforementioned questions to the affirmative, your organization would be on a short list? We have all heard it said that if we do not like the results we are getting in our organizations, change our approach. We have also heard that one step from insanity and chaos is doing the same thing repeatedly and expecting a different result. If we know this, are we using this knowledge to challenge ourselves to reflect and assess our chosen business practices and identify how to improve?

There is a great deal of hype in today’s business landscape about one emerging business trend or another that promises to deliver better results, but are we tempted to buy in to these new models and techniques or do we step back and place these ideas in a broader perspective? Some assert the key to operational is performance-driven leadership. The suggestion of this premise is that organizations can perform at the highest level possible to the extent the organization is being steered in the right direction in its market space and people are managed in a way that motivates and inspires them to act favorably in that given direction. But not everyone agrees with this contention and that business success is fundamentally about how work gets done and what is measured. To this point, there are those that believe that the quality framework of an organization’s policies and practices and the extent to which they are universally and consistently applied result in a performance management culture. Yet, others, find that the level of employee involvement and level of engagement contributes to favorable outcomes, while others maintain that business success is essentially dependent upon meeting operational and financial targets, as well as the ability of the organization to establish, track, and provide a continuous feedback loop for ongoing improvements to these metrics. While these aforementioned divergent views contribute to differing operational and strategic approaches chosen by organizational leaders, the reality is that any of these absent another presents limiting views.

After all, as business professionals and HR managers we can all agree on one aspect of operating a business—we want continuity and sustainability. In other words, we want to see our organizations thrive. We want to draw upon our skill sets and serve an instrumental role in navigating our organization in a way that leverages its core competencies for a distinct competitive advantage. I think we can all easily agree that no one wants to be associated with mediocrity. This is different and distinct from those that accept mediocrity in their own individual performance, but that is beyond the scope of this article and can be saved for another review. Rather, we all want to be associated with excellence and the “winning team.” If one wants to test this theory, just watch what happens in collegiate and professional sports when fan bases miraculously grow exponentially when a given team is winning or conversely wanes when a team is having a lackluster season. Therefore, although divergent views about what constitutes a path for a successful organization exist, everyone has the same desire for organizational success (Risher, 2015).

What are Performance Driven Organizations?

Reality is that performance-driven businesses require more than one quick fix or another, they require a comprehensive solution. And, sometimes, this means getting back to the basics of what we know are solid business practices, and in some instances strategically replacing or refining others. This suggests that we must consider the integrative nature of our business practices and what are the key drivers of human capital effectiveness. If we subscribe to this holistic solution, then we have to ask ourselves one more fundamental question: Do we have a Human Capital Management Strategy (HCMS)?

As HR professionals and managers in the workplace, when we think about performance management, we typically think of historical models and their related integrative systems that include performance standards, performance measurement, quality improvement processes, and measurement of progress in their utilization. Such an approach does not fundamentally address the interdependent nature of human resource practices and measureable business outcomes. Too often, CEOs also fail to realize at the center of this debate are managers who are engaged in a philosophical battle about whether human resource practices should focus on performance or accountability (Mann & Darby, 2014). Is this a trick question? It should not be. In reality, it is both. This is like asking someone if they are ‘compliant ‘ or ‘committed’ to their work responsibilities. Are employees just doing what we ask them to do only while we are looking? Or are employees doing what we need them to do in our absence? We all know we want employees to be both taking responsibility for their assigned work tasks, but also actively engaged in ensuring the work reflects the impetus of the organization’s mission and values. We want to see the demonstration of an unwavering commitment by an organization’s employees to ensure the work is of the highest quality, produces the most favorable outcomes, and instances where it does not, recommends solutions and actions to make it so (Ellis & Normore, 2015; Smythe, 2008). However, what are we doing to make sure we drive ‘commitment’ to the right business outcomes? It is not a simple undertaking.

What does an Effective Human Capital Management Strategy Look Like?

A truly effective Human Capital Management Strategy calls for a comprehensive and integrated approach to all business practices. If we know that there is a much larger framework from which to build our human capital management strategy, the question becomes what does it look like? There should be a game plan, a charted path on how to get there, and a clear idea of what success looks like so we will know when we have arrived. In the second of this two-part article next month, I will describe four key components of a well-designed and comprehensive human capital management strategy. We will also examine how to implement this holistic approach in your own organization to drive improved operational performance.

Page38 Photo LaFevor Head shot

Dr. Kim LaFevor, DBA, SHRM-SCP, SPHR Dean, College of Business Athens State University General Motors Labor Relations (ret) kim.lafevor@athens.edu