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Human Resources in Practice

MEASURE YOUR EMPLOYEES' POTENTIAL

A dedicated workforce is more important than ever, as the relationship the business has to its customers is critical to its success. Of course, quality and prices are still selling points, but if you do not realize the quality of your workforce then the customers might go to your competitors where they enjoy better atmosphere and service. It is the qualities of your employees what really creates a bond to your customers.

"What is not measured is not managed"

How come some employees are happy to stick with the same company for years while others look for a change? Some companies know how to take good care of their employees. Dedicated employees knows perfectly well what is expected of them every day at work. A safe, healthy and happy workplace will ensure that your employees feel at home and will stay with your for a long time. They feel good about being there. They are challenged to prove themselves and grow along with the company.

For building up a good team will your company need people with different competence and level of competence. You can compare the workforce with a football team where success is dependent on each player's role and strength. A poor defender can in fact turn out to be a good attacker. A poor marketing consultant can turn out to be a skillful strategist.

But how to select the right people, the ones that add value to our company? And how do you acquire and retain valuable employees? It definitely requires your skill and focus.

Your employees' qualities and competence are decisive for how your company will be able to realize its visions and goals. Therefore are acquiring and retaining employees among the most important tasks for the organization.

Also the employees have demands and expectations to the positions they are offered. They wish to use their competence and develop their potential, and when you recruit and select new employes it is a „must“ that both parties' interests are met.

Changes in an organization's inner and outer environment make recruitment and selection of employees difficult. The business contributes to and benefits of the society, and the society regulates the frame conditions for employers and employees. The organization's success with recruitment and selection of employees will both affect and be affected of what happens in its internal and external environment.

Recruitment

Recruitment is not successful when it is solely based on the number of people who apply for a position. On the contrary – because if the candidates are not qualified for the position then the number of less qualified candidates will be both time spending and expensive for the organization.

Qualifications

A great deal of important factors are decisive for selecting the right person for the job, for the organization's satisfaction and for the possibilities the organization has to offer the candidate.

  • Type of organization, service or know-how establishment
  • Type of organization (High/Low Hierarchy? Matrix? Project?)
  • Business culture
  • Management type
  • Size of business
  • Economy
  • Physical and psychical working environment

In addition, the question will always be what the working market has to offer. Are well qualified candidates for this particular job difficult to find?

The organization's choice of strategy for survival and positioning in the market will also have high impact on the recruitment process. If the organization wish to improve its ability to compete through reduction of costs, will it mean strict resource economy and control which may lead to tighter frames for the employees' development in their job. Does the organization wish to gain a higher market position, develop higher quality of products and services, must the internal structure and culture as well as the materiel beneficial the organization offer be found attractive by highly qualified and motivated candidates.

External or internal recruitment?

Basically, it is a personnel political decision whether the recruitment shall be internal or external.

A recruitment policy based on internal recruitment does not mean that you can to replace one employee with any another just for filling up an available position – but it means that you have to follow a recruitment policy, and that demands active engagement from you and the organization through further training, development, job rotation and job descriptions.

Both external and internal recruitment represent advantages and drawbacks. Be aware of the fact that internal recruitment often leads to highly motivated employees. You on your side know what the candidate is good for if you choose one already among your employees. In addition, internal recruitment will secure a more stable work force – meaning a reduction in turnover. On the other hand is internal recruitment time consuming and can lead to higher training costs. A position filled by an internal candidate may also create confusion through the whole organization system; „who will be the next to get a higher position?“ A high level of internal recruitment may also create a rigid working culture and environment.

Internal recruitment suits organizations that are relatively huge, when technology makes it ease to change working tasks, when the employees have potential for further development, when the organization has developed programs for training and development, when the organization keeps the employees informed about new job possibilities, and most important – when the organization has worked out methods for realizing the potential of their employees.

HOW TO MEASURE YOUR EMPLOYEES' POTENTIAL

Define your people through your goals

In all relations where to or more people are involved will mutual appraisment be created. We valuate other people's behavior and reactions, and through our perception we create an opinion of others.

Our appraisment is the expression of our personal values and preferences. Some of these values and preferences are we aware of, others are we less aware of, and based on them will we create an intuitive appraisal which will have a great impact on our behavior towards people around us.

Within the walls of an organization will we also find informal appraisment as parts of the system. The bigger and more complex the organization is, the more difficult it is to experience and valuate your employees' potentials and working abilities. Huge organizations will therefore use formalized valuation systems for realizing the employees' potential.

„What is not measured is not managed“

The valuation of employees serves many purposes

  • Recruitment and selection, planning of carrier, promotion, placement and replacement
  • Planning and strategies of the organization
  • Mapping of competence
  • Control of efficiency
  • Increased quality of efficiency and production through motivation, training and development
  • Stipulation of wages
  • Evaluate the potential of potentially new leaders
  • Evaluate the relations between the employees and the working process
  • Evaluate stress and health
  • Turnover

With such a wide specter of areas for valuation of employees is it obvious that you will have to work actively with many tasks. Among the most central are psychology, sociology, occupational health, safety and security, and economy. You will find a lot of theories, methods, techniques, points of view, and perspectives defined differently, as the value of these methods and techniques are based on specific needs.

A systematic personnel valuation serves many purposes

Demands to a valuation system

  • it must be fair, relevant, valid and reliable
  • it must be adapted to the needs of organization
  • criteria for position and efficiency must be specific, detailed and clear, and accepted by both parties
  • an open and good social climate in the organization

How to predict efficiency and potential?

Focus on 3 main areas of your employee; results, behavior, potential and personality.

Criteria for valuation: Psychological – physical – economical

  • Psychological – demands to the employees intelligences, personality, motivation, ability to manage and delegate, e.i
  • Physical – reaction, strength, endurance
  • Economical – related to factors as performance, efficiency, sale, measurable in economical terms

Choose the right people for your goals

You need a strong dedicated workforce to achieve your goals and realize your strategic outcomes. Therefore, focus on your company's primary vision when you hire people. Make a list of knowledge, skills and abilities, the competences you will need your employees to exhibit. Do not forget to consider competences that your investors might be seeking, because investors often look for businesses with a workforce that demonstrate market knowledge, innovation and resiliency.

Once you have your competency list, decide which part of your workforce should exhibit which skills. In order to drive performance, it is important that you have set clear goals and measure them up against competences and performances.

The lower down in an organization hierarchy a person works, the easier is it to find satisfactory qualitative goals for his/her performance, and it will be relatively easy to find criteria for valuation of performance, efficiency, service mind, absence .e.i.

On a higher position level are there more criteria needed for defining the quantitative performance, as a higher position demands several forms of qualifications and abilities – relations that makes it more difficult to valuate.

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