Employers have a unique opportunity to shape government guidance aimed at helping organisations prove the link between their people management policies and the bottom line.
Denise Kingsmill, who has been leading the DTI's Accounting for People Task Force, urged Personnel Today readers to respond to its consultation paper published today, which will try to aid employers in measuring the impact on performance of their HR policies.
She hopes the finalised guidance will help firms prove the business contribution of indicators such as training, diversity, remuneration, retention and staff turnover.
The best practice guidance will also will help large employers meet new performance reporting procedures, called Operating and Financial Reviews, which are expected to be introduced in the forthcoming Companies Act.
Kingsmill was asked to set up the taskforce in January this year by DTI secretary Patricia Hewitt, following her experience running the Kingsmill Review on Equal Pay in 2001. Kingsmill said the equal pay review showed that UK companies are generally very weak in the area of human capital management (HCM). She believes the UK will only bridge the productivity gap with its main competitors if employers start to take this issue more seriously.
"On the whole, the standard of people management in this country is very lacking. There are some brilliant exceptions, but in general it is poor. Companies typically say that people are their greatest asset, but then do nothing about managing this asset in an appropriate way," she said.
"Too many employers do not treat people in a way to motivate them to contribute to business success."
Kingsmill said the consultation was an opportunity for HR professionals to boost their profile by taking the lead in trying to prove the contribution towards organisational performance of effective people management.
"It is a great concern that out of the top FTSE 250 companies, only 20 have the people function on the board. This does not reflect the importance of people management to performance," she said.
By Ben Willmott
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