HBR

Hr’s vital role in how employees spend their time, talent and energy

by Eric Garton

February 1, 2017 | 9:57 am
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The value and efficacy of human resources are frequently debated in business. Complaints include weak business partnering, poor talent recruitment and development, and time-wasting processes. But hating HR can be bad for your company — it should play a vital role in making the best use of your organization’s human capital.

Human, not financial, capital is today’s scarcest resource. It can be measured in three ways:

— TIME: the hours that employees work

— TALENT: the skills and ingenuity they bring to their jobs

— ENERGY: the level of engagement, passion and focus they have

These factors and the interactions between them are how human capital is converted into productivity and economic value. My colleagues and I measured how effectively companies use their human capital. Our research concluded that the best companies, the top quartile in our study, generated more than 40% more productive power than the average of the bottom three quartiles. For the best companies, this benefit compounds over time, allowing them to build a massive productivity advantage over competitors.

Our research demonstrates why HR plays a vital role in helping enterprises stop wasting these resources.

For example, the average company loses 21% of its productive power to time-wasting interactions. The best companies reduce this loss by nearly 50%. The causes of time-based losses in productivity are part structural and part behavioral. From a structural perspective, HR helps leaders develop effective organizational designs by addressing time-wasting

routines in their operating models, including hierarchies, processes and systems. To address time leakages driven by behaviors, companies must examine decision-making norms, governance forums, and values and feedback systems. HR can highlight factors that create time losses.

Now consider talent. The best companies get a 29% boost in productivity from their top employees. We found that more important than the number of these A-players is how effectively a company deploys them for business-critical roles and initiatives. Talent led by an inspirational leader who knows how to get the best effort from his team members is a productivity multiplier.

Finally, for the average company, energy is the single largest source of productive power. Our research indicates that the most energetic employees were more than twice as productive as a merely “satisfied employee” and 50% more productive than an “engaged” employee. While the path to employee inspiration requires multiple dimensions, HR can take three immediate actions:

— Eradicate the factors that steal time from employees and make it harder for them to do their jobs.

— Redefine ways of working, and create an environment that balances the performance-enhancing goals of accountability and autonomy.

— Help employees link their roles to the company’s customer mission.

HR can play a critical role in unlocking the energy of the organization. But it will need to rebrand and reorient itself first.


by Eric Garton

February 1, 2017 | 9:57 am
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