Manage
HR
It
is the quality and the standard of the human resource recruited
that plays a key roll in differentiating between a successful
organisations and a "run of mill" organisation . In
this section, we will discuss the issues relating to this valuable
resource through a series of articles. And yes, we are open
to contributions from masters of this Art ... Are you one?
Hitting
bottom line
HR
has always been seen as the "cost centre" of an organisation.
However studies reveal that in today's business world, HR practices
does churn revenues. Its all about how you invest in your human
capital.
Let's
assume that you are assigned Rs. 10,000 per employee to spend
on human resources for the year but your CEO demands that you
spend it in a way that would fetch the company big bucks!!! What
do you do? Do you spend it on training? Perhaps a new HR information
system? The bigger headache is explaining how your investment
is going to have an impact on the company's profit.
True
enough, you believe that HR contributes to profit, but business
doesn't run on that does it?Executives
want proof of the pudding!!
Well
there is good news for HR experts. Studies suggest that not only
is Human resource the most valued asset of a company, but there
also proof that investing in HR does produce returns.
According
to a study conducted by the Center for Effective Organizations
at the University of Southern California, "employee-involvement
practices such as information sharing, skills training, rewards
programs, and empowerment efforts -- all of which fall squarely
into HR's domain -- show a significant bottom-line return".
Companies
who have followed the employee-involvement practices have produced
a 13 percent higher return on equity.
The
study suggests that HR doesn't have a direct impact on the revenues
generated by the company and neither does it seek new business
opportunities-- But it certainly "improves the effectiveness
of the organization" which in turn helps the company to find
new markets.
Keeping
in mind HR's role in boosting the company's profitability; there
are two ways of tackling the issue:
1)
cutting costs
2) helping to generate revenue.
Cost-cutting
always the easier way out and quick on boosting profits. This
is normally the first tactic an HR professional adopts. Using
technology has been the most common method of cost cutting. Unfortunately,
instead of cutting costs it has increased it on an average of
16 percent since '98. Moreover, even if there is saving through
cost cutting, it is not the most effective way to build value
over a long term period.
The
idea is to shift focus from cost cutting to effectively investing
in human capital. Here are some ways you can support bottom-line
goals.
Communicate
well
