The Mobile MBA

Human capital

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Introduction 66

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Dealing with HR professionals 66

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HR strategy and minimising the cost of production 67

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HR strategy and the quality of production 68

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HR strategy: enabling growth (or decline) 73

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HR strategy: compensation 74

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Organisation culture and what you can do about it 75

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Organisation culture and how to change it 76

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When to fire someone 78

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Ethics 79

4

THE MOBILE MBA

66

INTRODUCTION

Firms like to say ‘people are our most important asset’. But in too many firms,

loyalty is a one-way street: you have to be loyal to the firm which will be loyal to

you for as long as it is convenient. And yet the underlying sentiment holds true:

people make the business succeed or fail. As a manager, you will have responsi-

bility for making sure that your own team stays in the performance zone: above

the comfort zone but beneath the stress-out and burn-out zone.

Across the organisation, there is a much greater challenge: how do you help

everyone stay in the performance zone while maintaining the economics of the

business and respecting the career ambitions and development needs of all

your staff? Inevitably, you cannot achieve all of these objectives: if you have 5,000

people wanting to become CEO, you will end up with many disappointed people.

This is where the role of HR (Human Resources) becomes important. The HR

function has endless different names, but a common purpose: make the most

of our people. How this works varies by type of organisation, but the principles

remain the same. The purpose of this chapter is to explore the principles behind

making the most of your people.

DEALING WITH HR PROFESSIONALS

In the past, firms used to have a personnel department that looked after matters

to do with personnel. Nowadays we have the strategic human capital division.

So what do they do? Look after matters to do with personnel. Whatever they call

themselves, treat them well. Managers do not need enemies, let alone ones in

the HR department.

People matters fall into two categories: operational and strategic.

Operational matters include things like payroll, PAYE, employment law

and regulations, and are normally outsourced to payroll firms, accountants

and lawyers.

Strategic matters are the ones to which managers and HR have to pay atten-

tion. There are three strategic goals for any staff strategy:

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minimise the cost of production

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maximise the quality of production

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enable growth (and occasionally enable downsizing).

Inevitably, these three goals are often in conflict, and different parts of the firm

will be pulling in different directions, so HR has an important job to do.