How closely do you manage your team’s budget? Most managers keep a pretty close eye on their financials — probably evaluating costs quarterly or even monthly. How about your bills? When a bill comes in, it’s likely that you pay it promptly.
When you’re on top of your budget and bills, everyone is happy. Your vendors get paid. Your team gets the tools they need. Things stay on the predicted path, providing stability to the organization. Importantly, you can evaluate your efforts in the language of business — value, return on investment, and costs. Now, what If you managed your people with the same frequency and attention you apply towards your financials?
It sounds like a really good idea on paper, but this approach can be a little tricky to implement effectively. People are more than their salaries, and provide more value to their team and company than usually meets the eye. Here’s how good managers measure their employees’ value, incentivize positive changes, and review their human capital “portfolio” with the same interest as their financials.
Gauge Your Employee Talent Value
Employee value is often measured in salary. Human value, however, is not an easy measurement to enumerate. Even the most siloed teams provide value to other teams, so you will have to find the additional benefits they might bring to the organization. Do these individuals boost co-worker morale? Are they flexible and accommodating to management? Are they driven and do they show initiative?
All of these factors add invisible value and would need to be measured objectively if a valid comparative metric were to be developed to reveal value in monetary terms for each employee within your organization.
There are tools to help you, For instance, EVP (Employee Value Proposition) will help you to monitor and review performance constantly, providing you with an accurate picture of what is happening within the organization. Having a clear understanding of human value will give you a far better idea of what your productivity output should be in relation to your talent pool.
Commit to Human Capital Investment
Now that you have a baseline measurement, invest in your people. When you show your employees that you are willing to invest in their skills development and overall career growth, you are more likely to end up with an employee who is willing to do more than just the bare minimum of their job role. This may not always be the case, however, but the chances of inspiring your employees to greater levels of productivity and job satisfaction are much higher when there is a perceivable and measured investment made in their training and betterment.
This is also a good way to retain highly skilled members of your team, as training and upskilling can be negotiated into a formal contract, which could reduce that employee’s later desire to explore the job market. Imagine investing considerable funds into developing your own in house software development team, only to have them leave your company and form a rival operation. Restraint of trade and other legally binding measures can also be employed to keep your staff within your organization,
Review Performance Constantly
You wouldn’t let your investment sit in a portfolio without oversight or supervision, especially when changes within the market start to influence its overall value. The same is true of your business’s financial accounts, you always want to have a real time monitoring and control over these facilities, so why wouldn’t the same apply to your human capital?
People make up the majority of your company’s expenses if you look at salaries and benefits, so why wouldn’t you want to make sure that your investors were getting the best value for their money? Measuring tools become vital if you are to extract value from your human capital, as you need stringent metrics to work from if you hope to see what is happening with your employees.
Performance reviews are required on a constant basis, and daily and weekly sessions can make all the difference. These impromptu meetings can really help to bring both negative and positive aspects to an employer’s attention before an official quarterly performance appraisal. This gives your staff all the time that they need to institute corrective action from one-on-one sessions, instead of being blindsided in the actual meeting.
These techniques will help you to unlock the potential of your human assets within your business, or at least guide you toward a more value-driven people methodology. Not all approaches will work in all industries, but with a bit of research and practice, you can find just the right balance between managing your employees within the traditional paradigm and handling your staff in the same way that you manage your finances.