People-power gurus get their rewards

Human resource managers are winning recognition at last, writes Philip Schofield

Truth has at last dawned on employers. The weary cliche: "Our people are our most important asset" is actually correct. Managements are having to accept the conclusive evidence that the most important factor affecting profits is the way in which employees are managed. The result? The corporate spotlight is focusing on the Human Resource Management (HRM) function.

The problem is that while growing numbers of employers want to adopt "best practice" in the management of their people, many are unsure exactly what that is. Fortunately, then, an initiative by Martin Leach, an independent publisher and one of the subjects of Charles Handy's new book The New Alchemists, has opened one way to measure best practice.

Having successfully launched the award-winning Human Resources magazine, Leach has devised and organised the HR Awards. He explains: "Four years ago, there were no quality awards for human resources at all. The Institute of Personnel and Development has `Personnel Manager of the Year', something done for an individual in an organisation, but there was nothing that measured the HR function. I felt that there was a gap in the market for something that pushed quality and excellence forward ... there was no way for human resource people to measure how well they were doing or get some kind of recognition."

Drawing on the experience of last year's HR Awards, Shaun Tyson, professor of human resource management, and Noeleen Doherty, senior research fellow at the Human Resource Research Centre, have described a framework for HR best practice in the Human Resource Excellence Report. The report defines the parameters of best practice at a strategic, operational and process level within an organisation.

The authors' central tenet is that there should be a "fit" between the HR strategy and the business strategy. "HRM should help to deliver organisational performance objectives through HR programmes and policies ... HR activities should be integrated with line management, and there should be integration within the policies to give coherence." But they do not advocate a single "ideal" approach.

The model they developed for the awards follows criteria found in both the Investors in People (IiP) programme and in the European Foundation for Quality Management's model for business excellence. At a strategic level, it proposes that HR strategy fit into the business or organisation strategy and be designed to deliver against business objectives. The HR function should be seen and understood as integral to the team responsible for the major change processes.

At an operational level, the model is competency-based. The authors define competencies as "strategically important attributes which give a competitive advantage", which they say should be identified by research into successful performance and an analysis of future manpower needs in the organisation.

Recruiters should seek out these competencies in the job market and bring them into the organisation. Employment contracts should be attractive and competitive. Employee development needs should be met as part of the needs of the business. Appraisal and performance systems should be linked to organisational objectives and to personal development. And reward management systems should deliver against corporate objectives in terms of motivation, recognition and retention.

Finally, at a process level, relationships should be managed with perceived fairness, involving employees collectively and individually in those decisions that affect their work. Recognition should be given to the different stakeholder relationships, which may include customers and suppliers, and the management approach should be inculcated through an appropriate organisation culture. Employee creativity and innovation should be developed. There should be an organisation-wide approach to learning and change-management. There should be systems to facilitate two-way communication. The physical and mental well-being of employees should be central to organisational life, and recognition should be given to the significance of the home/work life balance.

"This may seem a counsel of perfection," admit the authors. "However, there is no `right' way, and what is appropriate depends on the strategic objectives at a corporate level ... our concern is with what is appropriate for the organisation."

The 51 organisations entering the 1998 HR Awards clearly saw themselves as models. Commenting on their HR strategies, which were often tacitly expressed rather than formally stated, the authors observe: "As a generalisation, the greater the clarity of the human resource vision, the better. Straightforward, well-grounded visions seem more likely to be achieved."

n `Human Resource Excellence Report', by Shaun Tyson and Noeleen Doherty, is published by Financial Times Management