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Only after you've identified your critically important jobs can you determine how to improve the performance of people holding those roles. "The quickest route to increasing shareholder wealth is to increase employee performance in strategic positions," the authors say. It does not pay to put a lot of effort into improving the performance of people in positions that don't create wealth for your firm.
Two groups are responsible for managing and developing the workforce: line managers and human resource leaders. Line managers need to be "accountable for their workforce just as they are held accountable for other resources," the authors say. Line managers must communicate the firm's competitive strategy and its business issues, and be sure that employees have a solid understanding of their customers and their needs and how they can help fulfill them. "At Zingerman's restaurants," say the authors, "even the dishwashers know the firm's operating profit and how they can improve it."
For many companies moving to a differentiated workforce strategy requires a big change in mindset for HR. Instead of a view that says all employees should be treated equally, they now need to shift to the perspective that all employees are treated equitably. There are four key distinctions between a differentiated approach and a conventional one, the authors say. They are: "a focus on equity instead of equality; a focus on engaging the right employees, not necessarily all employees; an emphasis on hiring choice employees, not becoming the employer of choice; and a focus on earned increases, not entitlement."
You may think that implementing a differentiated workplace strategy would cause tremendous angst among your employees. The authors say that in their experience this is generally not the case-although they note that HR managers may be more resistant than other employees. "Employees are very aware that 20% of the jobs create 80% of the value in most organizations." They say you can expect resistance from your bottom-third performers and generally enthusiastic support from your top performers. Which is, after all, the group most valuable in meeting your strategic goals.
Reprinted by permission of Harvard Business Press. Excerpted from The Differentiated Workforce: Translating Talent into Strategic Impact, Copyright (c) 2009 Brian Becker, Mark Huselid and Richard Beatty; All Rights Reserved.
Also of interest:
- Book: Beyond HR: The New Science of Human Capital by John W. Boudreau and Peter M. Ramstad, published by Harvard Business School Press, June 2007.
- Book: The Workforce Scorecard: Managing Human Capital To Execute Strategy by Mark A. Huselid, Brian E. Becker and Richard W. Beatty, published by Harvard Business School Press, March 2005. How to create a Workforce Scorecard that identifies and measures the behaviors, competencies, mind-set, and culture required for workforce success and reveals how each dimension impacts the bottom line.
- Book: Moneyball: The Art of Winning an Unfair Game by Michael Lewis, paperback published by W.W. Norton & Co., April 2004. How the Oakland A's used analytics to win a strategic advantage.
CIOZ Question: Are annual compensation changes significantly different for high performers and low performers in your organization?
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