Odds are your organization is either just coming out of- or soon entering- performance review season.
If you’re doing things right, this performance management cycle is but one milestone in a series of steps your organization takes to manage its human capital.
But let’s be frank shall we? For many, performance management is the most despised and undervalued organizational process around.
But why? Really — why?
If you’re like most companies, 53% of your expenditures are on salary and benefits (US Bureau of Economic Analysis). That’s a massive amount of operating capital. Spent on humans.
Those living, breathing folks that walk in and out of your doors every day. The people who engage with your customers, collect your receivables, build (or in some cases are) your products, bring them to market and so on.
Yet there are managers, and — dare I say it — entire leadership teams that cannot stand the thought of spending a few weeks reflecting on how they are managing their human capital, the lion’s share of their organization’s capital. And reviewing how that “human capital” is performing for the company.
I say forget the “few weeks.” That’s tantamount to a once a year performance review. Why aren’t they spending a proportionate amount of time managing that 50+ percent of your operating expense, to maximize your rate of return? Now that’s human capital management.
It’s not just about benefits, payroll, pension, time and attendance or employee data administration. True human capital management encompasses all the time, effort, systems and management strategy required to ensure your people are aligned, engaged and delivering optimum results.
Sound reasonable? Do we really need to re-hash how your people are your most important asset? I didn’t think so.
Let’s paint a parallel picture to drive home the importance of what happens when you neglect human capital management.
Now, if your management team cannot show you what they’ve done to ensure that 50% of your budget expenditures — the capital invested in your people — are yielding results, are you going to let them off the hook? No way!
But there’s a bigger question to ask you, the HR professional:
Is your organization doing all it can to ensure your people leaders have the right tools to manage your company’s human capital?
No more excuses. Human capital management needs to be one of your company’s biggest areas of focus this year.
If you want some great resources to improve your human capital management practices in 2013, do a quick search “Human Capital Management” in our HR blog search tool and get insights from dozens of great thinkers on the topic, created for you in an instant.
You can also read more about it in our Center of Excellence: The business case for talent management.