Improving organizational success through human capital investment

By - August 3, 2017

What is the purpose of having initiatives geared towards an individual employee’s performance? Often, the immediate answer is, “to improve the skills and knowledge of employees,” however that is only part of it.

The bigger answer is “to improve the performance of the organization as a whole.” In order to attain that goal, an organization must be disciplined in their approach. This post outlines how to design an intervention or practice that has a greater chance of yielding those desired results.

The first step is to determine the core competencies that employees need to possess to carry out the organization’s mission. Core competencies may be: Effectively communicates with customers and team members, provides effective coaching, understands and balances customer concerns with business needs. For the core competencies to be useful and add value, they must be observable, measurable and job specific.

The next step is to focus on career development. Many companies encourage employees to develop their skills for the good of the organization as well as career advancement. Tying development efforts directly to strategic business objectives will align employees with the future needs of the organization. By shortening the learning curve through training and career path preparation, companies are able to realize an immediate return on investment rather than waiting for the newly appointed manager to “grow into” their responsibilities. In all, successful career development requires support from top management, motivated employees, rewards and recognition for skill acquisition and clear connections between the training and core competencies.

Lastly, performance management is probably the most difficult process that can be used to improve organizational success, and yet it offers the largest potential return for the company. In addition to its labor intensiveness and threat to users, most performance improvement systems are not directly linked to business strategies or objectives and that is where companies are missing the point. By basing these measures on the business strategy, you can measure success and reward those who are adding value to the organization. Just as important, if these performance expectations are not met, the managers need to understand what training and development opportunities are available to help improve their performance.

Using this strategic approach to performance intervention allows an organization to focus on business strategy, as organizations are consistently linking activities to core competencies that are necessary for business success. By taking the time to be diligent in identifying your core competencies and linking them to the business strategy, you will gain support from top management and increase the impact of your efforts on the company’s overall efficiency. To learn more about how RSM can assist you with your other business needs, contact RSM’s management consulting professionals at 800.274.3978 or email us.


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