HR is not shaping up to its responsibilities

Denise Kingsmill, chair of the Accounting for People Task Force, had some
harsh words for the HR profession when Personnel Today met her last week.

She believes HR is not shaping up to its responsibilities, which is why few
companies report with any rigour on their people policies tied to corporate
strategy.

Kingsmill is passionate about making the link between people and performance
visible and available to all organisation stakeholders. She is worried about
HR’s capabilities in this area, and has called for the Chartered Institute of
Personnel and Development (CIPD) to develop more training around business
partner issues and corporate objectives.

Such frustrations might have been aired by Kingsmill as a key speaker at the
annual CIPD conference in Harrogate had she not been sick and unable to attend.

But in the run up to the launch of her report, she had another opportunity
to state that standards of people management across the country are generally
poor. "There are some honourable exceptions, but on the whole, the
personnel profession is going to have to seriously raise its game," she
said.

"It needs to familiarise itself with corporate finance and strategy.
The people at the top of organisations have got it, but there is a big gap on
implementation. Some companies are doing human capital management (HCM), but
overall, it’s not done very well.

"You don’t see [many] HR people in business schools," she added.
"There’s too much focus on employment law, and a sense that HR is
something that high-flyers don’t do. We must change that. It is vital for the
performance of British industry.

"People are the biggest factor for high-performance companies, so we
must make sure that those people charged with managing them are highly regarded
and well-trained themselves."

Despite her concerns, Kings-mill is a strong advocate for HR and ethical
business practice. In the New Year, she will be visiting her native New Zealand
to spread the word about the importance of human capital management.

By Jane King

Organisations are wary of measuring human capital

Last year, a study by Personnel Today
and Deloitte found that although organisations saw the measurement of human
capital as potentially very useful, there were significant barriers to doing so
successfully.

The survey found many businesses and HR leaders did not appear
to be using tools that enabled them to evaluate either the human capital in
their organisations, or the way it could impact other assets. Basically, the
study found approaches to measuring human capital were unfocused and limited.

Respondents were asked which methods they used to measure human
capital and whether they viewed them as effective.

Only 39 per cent of respondents identified a way in which
management behaviour had changed as a result of using a measurement approach.
The most frequently noted change in behaviour was "an acceptance of HR as
a key business area". This, however, was only identified by 11 per cent of
respondents.

How do you measure HCM?

Economic value added approaches                   64 per cent
HR practice effectiveness                                  63 per cent
HR benchmarking & HR metrics        
              51 per cent
Balanced Scorecard  methodologies                  46 per cent
Accountancy-based  valuation models
              47 per cent

Source: Personnel Today and
Deloitte

Denise Kingsmill’s expectations for a slow-burning revolution

The recommendations made in the final
report of the Accounting for People Task Force give the HR profession the
opportunity to play a far more significant role in the development of corporate
strategy than before.

Human capital management (HCM) is not merely an issue of
corporate social responsibility (CSR); it relates directly to the performance
of companies and organisations. Success, whether measured in terms of profits,
competitiveness or customer satisfaction, is built on the good management of
all the assets at an organisation’s disposal, including its most important and
often neglected one – its people.

The recommendations on HCM reporting, developed in consultation
with a wide universe of stakeholders, encourage a far greater focus by senior
management on HR policies.

We do not expect an overnight revolution, but rather a change
of emphasis within organisations, placing increasing store on the evaluation,
training and motivation of all their people.

HR has a tremendous opportunity to play a key role within these
organisations, educating other disciplines such as finance and sales about the
importance of effective HCM, and fostering environments where these
considerations become integral to both strategic and day-to-day management
practice.

I would like to thank all members of the taskforce for their
contribution, the Advisory Forum, the many people we consulted during the
preparation of the report, and the taskforce staff.

We believe that effective management of human capital will, in
time, enhance the commercial performance of all organisations in this country.

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