A lot of companies are already doing quite a lot internally to measure their management of people. They are not opposed to having to report these things formally, but would like to do it in their own way.
I think this inquiry and report will be the beginning rather than the end of a process. But it is interesting that there has been hardly a word of dissent about it. There has been a loss of confidence in the old business models, in the wake of corporate failures. Investors, stakeholders and business leaders want to know what the real drivers of business success are. What does drive long-term sustainability?
This is really about performance. Its not just about putting people on the balance sheet. It is about finding a clear way of reporting how people contribute to corporate performance. And this means it is a great opportunity for the HR profession. How will HR professionals shape business strategy? Can they move away from the unfair image of being only concerned in the soft areas to show they understand business issues and are clear how their work can contribute to it?
Denise Kingsmill will reveal exclusive early findings of her report to Human Resources magazines HR 100 Club Forum on 17 July.
Karen McLeod, head of human resources, Rio Tinto
What are the characteristics of a truly competitive workplace? That is a question we spend a lot of time thinking about. And it helps you to measure the important things. We need to understand what drives performance and not just report numbers that have no real bearing on it. We mustnt confuse lag indicators with drivers.
We also need to be careful here not to underestimate the complexity of workplace interactions that create a safe and productive work environment. People are not a simple physical asset, and they cannot be reduced to that in balance-sheet terms. But it may be useful to ask in what way people are different from financial assets and account for that. There is nothing wrong with measurement, in fact I am a positive advocate for measuring organisational health. It sharpens managements focus on what makes a difference in the workplace and encourages accountability at all levels. But you have to measure the right things. And the measures that are useful to a company like ours may not be relevant to others.
Claire Sutch, finance and HR director, Virgin Student
I think a lot of businesses will welcome some guidance in this area from the Kingsmill inquiry. More and more people are recognising that there is at least as much value in staff as there are in traditional assets. For example, we dont actually produce a physical product all the value of this business is in the people we have. But when it comes to actually quantifying this value it has always proved difficult. The risk is that whatever you do to measure the contribution of people will be very subjective. How easily could you compare it with what other businesses
were doing?
Im not surprised that companies are saying they dont want a one-size-fits-all recommendation from the committee. People wont want to be forced into adopting specific measures that may not have a lasting benefit for them.
