Most organizations have moved up from the first generation of employee survey measurement--employee satisfaction and motivation--to performance-related measures such as employee engagement and customer focus. But now, in this environment of downsizing, M&As, outsourcing and offshoring, there is a growing urgency to maximize the value of people. People Equity is the value that an organization achieves by having a workforce that is highly motivated, intensely focused on customer requirements, and capable of delivering on these requirements.
The increasing levels of global competition have challenged most organizations to achieve more with less. That means squeezing out low value activities in the workforce or in suppliers, and leveraging these resources to the greatest degree possible. This changing environment means that the measures of people need to change’to become more strategic but also more practical in helping managers know where to channel limited resources to most effectively achieve the greatest return on labor investments.
The absolute number of people is now far less important than having the right people in the right roles. And, having the right skills in the right roles does not guarantee success unless people have the right resources, are aligned with the brand promise or customer requirements, and are motivated to perform at peak levels.
Organizations that grow customer equity through stronger brands, closer relationships, and better products outperform their competitors while achieving higher financial equity. Employees and other suppliers help organizations achieve higher levels of customer equity through high levels of employee engagement, alignment, and capabilities. In short, high people equity drives high customer equity.
To achieve peak performance, high levels of engagement, alignment, and accountability are crucial. The problem is that most organizations do not do an effective job in all three areas.
Picture a three-legged stool in which we keep measuring whether one leg is broken, and we keep fixing or improving it over time, but the stool tips over because the other two legs are shorter. There has been much attention on engagement to the exclusion of the equally important elements of alignment and capabilities. To achieve peak performance, organizations must measure all three, and must compare performance in all three to know where to devote scarce improvement resources.
Metrus has developed measurement tools to help organizations quickly identify where they have opportunities to increase people equity, and consequently improve key customer and operational outcomes such as customer loyalty, increased market share, faster cycle time, lower process costs achieved through higher productivity, and more ethical practices that minimize regulatory or public scrutiny. Sounds like a lot? Yes, it is very powerful, yet it can be relatively easy to obtain.
Metrus’ People Equity survey suite includes two sets of people equity diagnostics. The longer version enables organizations to investigate in more detail the various dimensions that comprise People Equity. For example, the Alignment component of People Equity examines: internal brand equity; customer focused goals; and strategy awareness and alignment.
Measures of engagement, alignment, and capabilities alone fail to explain why certain elements of people equity are strong or weak. People Equity is increased or decreased through drivers and enablers.
As the chart indicates, human resource systems, structure, technology and innovation drive People Equity. In turn, supervision, leadership, strategy and values are key enablers. Finally, each organization has its own unique strategy for winning relative to other organizations in the same industry or function. These unique characteristics are best built into the strategic survey and are important in differentiating workforces and successful cultures—even in the same industry.
Metrus People Equity surveys lead to better resource allocation and targeted action because they clearly define the type of gaps—alignment, engagement, or capabilities—allowing management to both evaluate the entire organization for systemic shortfalls and to provide powerful data to managers and coaches to pinpoint local actions based on the specific equity gap identified for each.
This summary chart shows an organization that clearly has strong, reasonably uniform capabilities overall, a major division that is highly misaligned from top to bottom, and pockets of managers with serious engagement issues. This information, coupled with Metrus’ guaranteed performance improvement process, allows this organization to initiate limited corporate wide initiatives, focus energy on re-aligning one of its major BUs with the strategy, and invest in managerial coaching and skills training in pockets where it is most needed. It also allows the organization to review prior or ongoing initiatives for their expected impact on engagement, alignment, and capabilities. The result is significant performance improvement across the organization.
For more information, contact us:
- Read our white paper, People Equity: An Innovative Approach To Managing and Measuring Human Capital
- by e-mail or by phone (908) 231-1900.