Investors
in People has just celebrated its 10th birthday but will it prove effective in
helping UK employers become more productive over the next decade? Paul Nelson
reports
Investors in People has just celebrated its
10th birthday, but there is still debate over how valuable a tool it is for
employers.
Education
and Skills Minister Estelle Morris told the IIP’s 10th anniversary conference
that the standard lies at the heart of the Government’s plans to close the
productivity gap.
In
the past decade nearly 25,000 organisations have achieved the standard, which
aims to improve business performance through effective people management.
Almost a quarter of the UK’s employees now work for an Investors In
People-accredited employer.
But
critics still feel the accreditation is too bureaucratic – that it focuses too
much on processes and not results, while having no effect on the bottom line.
Research
by the Institute of Directors last month finds that the use of IIP cannot be
linked to profits or productivity. Only 15 per cent of 275 company directors
polled believe that it has increased company profitability, while just a
quarter feel that it has enabled them to improve productivity.
Richard
Wilson, business policy executive at the IoD, said, "Its contribution to
the bottom line, in particular its impact on profits, is limited. IIP will not
give directors the Midas touch."
Another
study by Warwick Business School based on responses from more than 6,000
companies also claims that IIP has no impact on the bottom line.
And
research by the Open University Business School concludes that organisations
place too much emphasis on winning the accreditation and don’t consider the
cultural benefits of the process.
The
in-depth study of six firms which have earned IIP status finds that
measurement, badge collecting and hard learning can dominate the process,
making managers’ sole aim to satisfy the assessment criteria.
Ruth
Spellman, chief executive of Investors in People, admits it can be difficult to
prove the link between IIP and business performance but she has no doubt about
the overall value of the standard to employers.
"IIP
accreditation is an incentive for companies to aim for. It encourages companies
to improve their HR processes, leading to improvements in staff attitudes and
productivity. This has a positive impact on customer satisfaction and retention
as well as improving service delivery.
"The
real benefit of IIP is that it doesn’t tell companies how to train staff but
allows them to link it to business objectives."
Spellman
highlights a CBI survey of 1,200 organisations which shows two-thirds of
companies see IIP as a major part of their growth and development policy.
Eight
out of 10 employers questioned believe that the standard delivers bottom-line
results, with 57 per cent citing better business performance.
Meanwhile,
the IIP’s own research reveals a fifth of the 15,000 employers polled say that
the commitment to staff that is required to achieve IIP has significantly
increased the productivity of their people and the organisation.
Alan
Jones, chief executive of haulage firm TNT, has no hesitation in linking the
distribution company’s recent success to the role of IIP.
"TNT
is thrilled with the standard. In the UK we have doubled our profits in five
years and globally this year we have reported results up by 35 per cent,"
said Jones.
The
CIPD believes the IIP has reacted to criticism positively. Jennifer Schramm,
training and development adviser at the institute, said, "It is now trying
to focus on results and not the process to get the results, which is a big
change. It is too early to see if these changes will have any effect.
"The
institute’s view is that the IIP is good as it encourages organisations to look
at training and development in a strategic manner. It is a good exercise and
the take-up shows that it has some success."
Spellman
stressed that IIP is not resting on its laurels. In April it attempted to
reduce the bureaucracy involved in achieving IIP by getting the assessor to
conduct interviews with employees and not rely on written documents.
While
next spring the IIP will introduce a benchmarking tier aimed at senior managers
and leaders.
This
voluntary upper level to the accreditation is for companies which have already
achieved IIP but want to continue the process and test their HR management
skills against their competitors.
"We
are looking to promote the best people management practices in organisations.
It is important that companies train and then keep employees, which is why we
are looking at management and leadership as tools to do that," said
Spellman.
Ann
Bailey, head of education and training affairs at the Engineering Employers’
Federation, said that its membership is convinced that IIP provides real business
benefits.
She
said, "Last year we asked IIP-accredited companies if they believe it had
improved the bottom line. The overwhelming answer was ‘yes’ – in fact we had no
negative comments about it."
Steps
to achieving IIP status
Investors
In People recognition is based on assessment against a series of 12 indicators
that reflect the four main principles of the standard – commitment, planning,
action and evaluation.
To
gain recognition the organisation must provide evidence in 33 fields, in the
form of a documentary portfolio that demonstrates the assessment criteria has
been met. An external assessor who must establish if the standard has been
reached then carries out an evaluation in the form of interviews with staff to
see if the company has met the criteria.
Interviews
were introduced in April 2000 as an alternative to paperwork in a bid to
address the bureaucratic claim.
Achieving
the standard can take anything upwards of two months depending on the training
processes already in place at an organisation.
Being
recognised as an Investor in People involves:
–
Understanding the standard and its strategic implications for your company
–
Undertaking a review against the standard to identify gaps in practice
–
Making a pledge to meet the standard and communicating that to staff
–
Taking action to bring about change
–
Bringing together the evidence for assessment against the standard
–
Achievement or recognition as an Investor in People
–
Keeping the culture of continuous improvement alive
