Organisations
are being encouraged to come up with their own solutions to prove how their HR policies
affect performance, by the woman leading the Accounting for People Task Force.
The
taskforce, which launches its consultation paper today, is to produce best
practice guidance, enabling organisations to demonstrate the value of their HR
policies.
Chair
Denise Kingsmill stressed the taskforce is not attempting to come up with a
‘one-size fits all’ approach, but wants employers to come up with ways of
measuring human capital management (HCM) to suit their individual businesses.
"I
think businesses in this country can be pretty creative when they understand
what is best for them and I hope they will figure out what is the best way of
doing this," she said.
However,
the document, based on the latest research on HCM and discussions with experts,
does provide some suggestions for how companies can start to measure the
effectiveness of their people management.
The
consultation paper finds there are two main ways in which HCM can enhance
performance. One is through raising the skills base of employees via appropriate
recruitment and retention, training and broad-based developmental activity; the
other is by enhancing employee motivation and ability to use their skills
through measures such as the design of their reward system, participative
problem-solving and team work.
The
consultation document also identifies the need for some standard reporting in
areas such as workforce profile, labour management relations, retention,
training, and remuneration.
Consultation
will remain open to mid-July when the taskforce will start processing
responses. Kingsmill plans to report to trade and industry secretary Patricia
Hewitt in October.
The
subsequent guidance will enable large employers to meet new performance
reporting responsibilities under the forthcoming Companies Act.
The
reports, termed Operating and Financial Reviews, are expected to be published
along with company annual reports.
Organisations
will have a duty to report on all factors material to their future performance.
However, Kingsmill emphasised that businesses will have the freedom to decide
whether these ‘factors’ include their people.
"It
is up to each company to decide for themselves what they report on and if they
think people are material to their success. Obviously I think they are,"
she said.
Send
your views to the Accounting for People Task Force, at Room 493, DTI, No 1,
Victoria Street, London. SW1 0ET or by e-mail to: [email protected]
By
Ben Willmott and Quentin Reade
Employers need to ask:
1. Do we believe our people and HCM practices have an impact on
performance?
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2. Do we believe our board should try and understand the link
between these practices and performance to ensure our HCM strategy complements
and supports the business strategy?
3. How can we demonstrate to our own and our stakeholders’
satisfaction that this is happening?
