The People Factor
The people factor plays an important role in business, though only few understand its real significance. Business strategy too is a mere word, without the right people bringing it to life. It is hardly possible to achieve the real potential of a business, unless the organization gets the people factor right. And to attract, develop and retain talents, organizations need to focus on the people factor. Companies need to provide what their frontline employees need to deliver stellar service.
Studies confirming the people factor
To ensure the vital role played by the people factor in organizational success, let’s consider the research conducted by the Hay Group. The research confirmed that the leader’s skills to manage people contribute up to 70 percent of the aspects determining organizational climate. It also adds around 25 percent to business returns. Similar research was conducted by the Gallup Organization, which linked people management to productivity, profitability, customer satisfaction, and employee retention. Another study conducted by David Maister illustrates that the attitude of the people are correlated with organizational financial success. This study further confirmed that higher levels of the people’s commitment demonstrate a measurable improvement in the organization’s financial performance.
Why organizations fail to focus on people factor?
In spite of the studies confirming the role of people management, many managers hardly find time to focus on the relationship aspects of leadership. They, however, recognize these issues and understand the necessity of people management for overall organizational success. People management is broadly defined as managing the skills of the people for building positive working relationships, high performing teams, and motivating and influencing employees. However, people management skills are becoming more complicated these days due to the increasing complexities of organizations. In fact, only few organizations provide necessary resources to managers for acquiring these skills.
Moreover, there is considerable tension between organizations and managers, when it comes to factors contributing in effective people management and team’s success. In most cases, it has been noticed that line managers favor a balance between team effectiveness and task achievements whereas; organizations focus more on task achievement. Also, managers often complain that organizations lack in good techniques and measures to evaluate team performance.
To deal with the people factor, organizations need to spend more time, effort and money in mining the potential of their Human Factor. It is also crucial for organisations to look inward just like they look outward. They need to encourage and foster a work culture based on performance, transparency and openness. And to build a culture of transparency, organizatuions need to analyze the performance of each employee. With transparency comes trust, which helps the organizations to gain competitive advantage for sustainable success. Apart from fostering a culture of performance, transparency, and trust, organizations should also focus on meritocracy, which helps in eliminating discriminatory practices within the company.