What's in Your Human Capital Management Strategy? Driving Business Solutions with Performance-Based Outcomes Part 1 of 2 By KIM LAFEVOR Are We Satisfied with our Business Outcomes? Are you fully satisfied with the level of performance you s see in your own organization? Does your organization have what it takes to perform at the highest level within your market segment? Would it surprise you to learn that if you answered these aforementioned questions to the affirmative, your organization would be on a short list? We have all heard it said that if we do not like the results we are getting in our organizations, change our approach. We have also heard that one step from insanity and chaos is doing the same thing repeatedly and expecting a different result. If we know this, are we using this knowledge to challenge ourselves to reflect and assess our chosen business practices and identify how to improve? There is a great deal of hype in today's business landscape about one emerging business trend or another that promises to deliver better results, but are we tempted to buy in to these new models and techniques or do we step back and place these ideas in a broader perspective? Some assert the key to operational is performance-driven leadership. The suggestion of this premise is that organizations can perform at the highest level possible to the extent the organization is being steered in the right direction in its market space and people are managed in a way that motivates and inspires them to act favorably in that given direction. But not everyone agrees with this contention and that business success is fundamentally about how work gets done and what is measured. To this point, there are those that believe that the quality framework of an organization's policies and practices and the extent to which they are universally and consistently applied result in a performance management culture. Yet, others, find that the level of employee involvement and level of engagement contributes to favorable outcomes, while others maintain that business success is essentially dependent upon meeting operational and financial targets, as well as the ability of the organization to establish, track, and provide a continuous feedback loop for ongoing improvements to these metrics. While these aforemen- tioned divergent views contribute to differing operational and strategic approaches chosen by organizational leaders, the reality is that any of these absent another presents limiting views. After all, as business professionals and HR managers we can all agree on one aspect of operating a business---we want continuity and sustainability. In other words, we want to see our organizations thrive. We want to draw upon our skill sets and serve an instrumental 38 www.HRProfessionals Magazine.com role in navigating our organization in a way that leverages its core competencies for a distinct competitive advantage. I think we can all easily agree that no one wants to be associated with mediocrity. This is different and distinct from those that accept mediocrity in their own individual performance, but that is beyond the scope of this article and can be saved for another review. Rather, we all want to be associated with excellence and the “winning team.” If one wants to test this theory, just watch what happens in collegiate and professional sports when fan bases miraculously grow exponentially when a given team is winning or conversely wanes when a team is having a lackluster season. Therefore, although divergent views about what consti- tutes a path for a successful organization exist, everyone has the same desire for organizational success (Risher, 2015). What are Performance Driven Organizations? Reality is that performance-driven businesses require more than one quick fix or another, they require a comprehensive solution. And, sometimes, this means getting back to the basics of what we know are solid business practices, and in some instances strategically replacing or refining others. This suggests that we must consider the integrative nature of our business practices and what are the key drivers of human ◄ Virtual Campus 11:00 PM Sat Jan 4 HCMS LaFevor Article Part 2 of 2 April 2017 Issue HR Professional Magazine.pdf What's in Your Human Capital Management Strategy The Game Plan, the Path, and Achieving Organizational Results that Matter Part 2 of 2 By KIM LAFEVOR Drawing a Picture of an Effective Human Capital Management Strategy I think we would all agree that in today's current business climate and notable variance among adopted business practices, there remain opportunities for the design and implementation of more robust human resource models of performance management. However, we have to start thinking about performance management in a much broader framework of operational performance and business outcomes. In practice, current employed organizational approaches generally treat perfor- mance management as a distinct process managed apart, but parallel to, organizational processes. Performance Management is not an appendage. It is not tied to business practices that only HR needs to think about and have responsibility. Herein is the problem. While there is a gap that exists between current performance management practices and their affiliation to desired organizational key perfor- mance indicators, there lacks a good game plan for an effective Human Capital Management Strategy. It is a necessary means to a desired end in performance management and organizational performance. When we think about performance management and the key drivers of human capital effectiveness, it does include HR practices, such as recruitment and retention initiatives, talent development, inter- national workforce planning and global mobility, elevated levels of employee engagement, enhanced organizational change agility, and a pipeline of mission-critical talent. However, there often remains some disconnect between these initiatives and actions and a connection to the bottom line. There is a need for congruency between human resource practices and accountability for organizational key performance indicators (KPIs). What's the recipe for an effective Human Capital Management Strategy? Figure 1 depicts the four primary components of a comprehensive human capital management strategy: 1) performance leadership, 2) performance management, 3) employee engagement, and 4) culture of accountability (see Figure 1). This holistic view provides for a more complete identification of the needed character- istics of human resource practices that directly connect to organizational outcomes. This represents a shift from the historical literature that describes loosely connected integration of human practices to one that involves and interdependent set of transformational practices (Liff, 2015). Poor management practices can cost businesses billions of dollars each year. According to one recent Gallup survey, one of the most critical decisions an organization can make is in the selection of managers with the right knowledge, skills, and abilities to execute such an integrative system. This research concluded that managers are responsible for as much as 70% of variance in employee engagement towards organizational goals. Only three in ten managers have basic or advanced talent management skills, yet these small groups of managers are responsible for 48% of higher profit (Beck & Harter, www.HRProfessionals Magazine.com 22 2014). By selecting managers that have the right fit, it can provide a clear path for organizational operational and strategic goals to be met, create and administer human resource policies that will enable employee engagement and establish a culture of accountability through communi- cating and measuring employee performance against key performance indicators and business outcomes. Therefore, performance leadership is the first of the primary components of an effective human capital management strategy (Beck & Harter, 2014; Groscurth, 2015). Human resource systems must work in tandem to realize both operational and strategic goals (Gurbuz & Mert, 2011). Human resource policies should support culture, mission, and business plans of the organization. There should exist well-designed performance standards and human resource practices that institute individ- ualized training plans to achieve identified goals, continuous feedback, and consultation when performance does not meet expecta- tions. Rewards, inclusive of merit, benefits, and promotion, should be leveraged to continuously reinforce excellence in performance. Employees should be involved in decisions that affect them to solidify higher levels of engagement. These aforementioned human resource practices work interdependently to contribute to favorable levels of employee engagement. This is an underlying distinctive competency that contributed to a fundamental difference between organizations that excel compared to those with lackluster or underperforming outcomes. Employees define and organizations towards goal attainment. While every organization has operational data and strategic objectives by which success It has been estimated that as little as 30% of employees are actively engaged and committed to organiza- tional success. When organizations can increase these levels of engagement, organizational performance can also be improved. While 30% of employees are engaged, 70% of employees are disengaged, either not engaged or actively disen- gaged, resulting in lower levels of performance or disruptive performance (Beck & Harter, 2014; Adkins, 2016). on enable Finally, creating a culture of accountability is realized when an organization is anchored performance leadership, performance management, and employee engagement human resource practices that are measured against key performance indicators (KPIs). To achieve higher levels of accountability, these measures must be tied directly to an employees work and defined outcomes. Performance targets should be clear and have at least one single point of accountability, and be relevant and attainable by those tasked with the tasks (Ridler, 2014).