Today there is much talk about profits being the focus--the "bottom line"--for organiztaional endeavors. There is another conversation, though, that has been emerging in the past few years, and is getting stronger. It is a conversation about people being a central value of the workforce, and how its treatment is related to an organization's performance.In The Human Equation: Building Profits By Putting People First (1998) Jeffrey Pfeffer contends that people--the workforce--greatly matter, must be valued, and must be compensated appropriately. He states that "high commitment management approaches" in organizations can enhance organizatinal performance. This occurs since:
- People work harder, because of the increases involvement and commitment that comes from having control over and say in their work.
- People work smarter; high performance management practices encourage the building of skills and competence and, as importantly, facilitate the efforts of people in actually apply their wisdom and energy to enhancing organizational performance.
- High commitment management practices, by placing more responsibility in the hands of people farther down in the organization, save on administrative overhead as well as other costs associated with having an alienated workforce in an adversarial relationship to management (p. 33).
Organizations can be profitable while putting people first. Such organizations have the following characteristics:
- Employment security.
- Selective hiring of new personnel.
- Self-managed teams and decentralization of decision making as the basic principle of organizational design.
- Comparatively high compensation contingent on organizational performance.
- Extensive training.
- Reduced status distinctions and barriers, including dress, language, office arrangements, and wage differences across levels.
- Extensive sharing of financial and performance information throughout the organization (p. 65).
For Rodd Wagner and James Harter (2006) of the famed Gallup Organization, the "heart of great managing" is not merely about expertise and skill.
The managers who are the best at getting the most from people
are those who give the most to them. Those who create the greatest financial
performance start with the least pecuniary motivations. They work hard to do the
right thing for their people, and they end up doing well. (12: The Elements of Great
Managing, p. 203)
For Wagner and Harter employees want and need:
- To know what is expected of them and that their ideas and perspectives count.
- A welcoming and caring work environment where they can utilize their talents and grow as a professionals, where their colleagues are competent and strive to do quality work, and where all have the needed resources to do their job.
- To do their best in a friendly, engaging workplace that challenges, encourages, and enables them to both do well and expand their knowledge and skills.
To explore their notion of enagagement more fully, see their 12 elements posted on the Gallup website.
Lastly, Lynda Gratton (2000) in Living Strategy: Putting People at the Heart of Corporate Purpose holds the following hope for management and human resource practices:
For organizational leaders:
- Dream collectively about the future of the organization and world in which it operates.
- Balance the short term with the longer term, understanding the past history and present situation of the organization, and where it can go.
- Build an organization that values people.
- Understand the reality of the organization.
For human resource management professionals:
- Build the business case for people where "soft measures" such as trust and commitment are understood as integrally related to "hard measures" such as company performance.
- Create a compelling people strategy.
- View the organization as a complex system.
- Create just and fair practices.
- Create a capacity for the organization and its workforce to revitalize (pp.204-209).
So, from your professional experience...
- How do you understand these ideas and perspectives?
- While they all are based in emperical research, are they realistic and viable perspectives?
- What are the importance and ramifications of these ideas for successfully managing, as well as operating, a successful enterprise in today's competitive environment?
