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Human capital, the key to success

Ahmed Al-Nouri with Kuwait Times reporter Ben Garcia.

Ahmed Al-Nouri with Kuwait Times reporter Ben Garcia.

KUWAIT: The human resource function has a critical role to play today in creating and operating high performance culture in an organization, said HR specialists Ahmed Al-Nouri, Chris Macklin and Jeff Wolfers from the Kuwaiti Consulting firm Wolmac & Partners.
"Attracting and keeping the best people that are the right fit for a company - people who can thrive in a high performance culture - is quite a challenge - and it's getting tougher as competition gets tougher within Kuwait and elsewhere in the region," they said in an exclusive interview with the Kuwait Times. Excerpts:

KT: Ahmed, many organizations see their HR functions little more than administrative - hiring, firing, and paying people. Based on your experience, what's your view?
Al-Nouri: All companies have to compete against stiff competition. They look at many ways to win - it might be through innovative products, superior service, or on price. But all of these can be copied by their competitors. What makes a real difference is the quality of people and the contribution they make. If firms can excel in this area, they can beat the competition in the long-term and make the company successful for all stakeholders. It's about creating a permanent high performance culture. The HR function has a critical role to play in this.

KT: How can the HR department help?
A: Attracting and keeping the best people that are the right fit for a company - people who can thrive in a high performance culture - is quite a challenge - and it's getting tougher as competition gets tougher within Kuwait and elsewhere in the region.
Paying more than the competition just creates a salary war. Companies have to do more to create the right kind of environment where people want to work and contribute over the long-term.
That means ensuring that great performance is recognized and rewarded, opportunities for long-term career growth are in place, and employees who have potential are identified and given the right kind of development to reach senior positions in the organization. This is particularly important for growing strong Kuwait talent.
These are all critical ingredients in making a company the 'employer of choice' that attracts and keeps the best people in any country or industry,

KT: So it's not just about being the best payer?
A: No, not at all. Of course paying competitively is important but there is evidence that some of the best performing companies in the world pay less than some of their competitors. What talented people want is plenty of choice in their careers and an environment where they can grow and flourish.

KT: Chris, how do companies go about achieving this?
A: There are five essential building blocks that need to be put in place.
1)A Talent acquisition program which identifies and correctly assesses potential hires who are the right fit for the organization - based on well-designed competencies that reflect the capabilities the company needs.
2) Performance Management process which is commercially focused, giving people clear objectives, with effective performance monitoring processes, and achievements linked to reward. Of course this needs to include mechanisms to deal with nonperformance.
3)Reward planning with compensation which is market competitive, and rewards strong performance every year balanced with longer term rewards to encourage retention.
4)A talent development architecture which identifies a pipeline of high potential talent for career development and succession, emphasizing local (Kuwaiti) development which provides focused development plans to prepare talent for the future. Importantly, these development plans should challenge top talent with responsibility for stretching projects - key programs that are important to the company and visible to all employees.
5)Employee communication processes to ensure employees are in tune with what the company is trying to achieve and feel proud of being part of the company's mission - and which also give management feedback on employee attitudes, concerns and motivations.

When employees see these processes operating well, they tend to be strongly motivated to make the best contribution they can and to work hard to succeed in the organization. They want to stay with the company, they want to emulate top talent and so the high performing culture gets reinforced.
These kinds of companies get a reputation for having good people. And good people attract more good people! It's a kind of virtuous circle on the journey to becoming the 'employer of choice', with company performance getting stronger and stronger.

KT: How do companies know that such arrangements really make a difference?
A: You just have to look at some of the best performing companies in the world, like GE, HSBC, Volkswagen, and in the region Emirates Airlines. All of them have robust human capital processes in place such as those I've described.

KT: This sounds like a huge agenda, Chris. How can companies cope?
A: I think there are several points here. Firstly, many companies sensibly get consulting help to design these initiatives and also to help implement them - it's important to get expertise at this stage to ensure that what is put in place is right for the organization.
Secondly, these initiatives are most effective when they become 'owned' and operated by the management team and employees. So training employees about the purpose, value and technique is vital. It's sometimes surprising how motivated and fulfilled managers and employees feel when they have the confidence and skill to do these things well.

For example, it's easy to provide a company with a performance management task list. Managers can carry out the tasks, tick the boxes and feel it's done. But it's not! The real value is giving managers and employees the skill and confidence to engage in a quality performance discussion - ensuring that both have a shared vision of expectations, clarity on what is expected, and openness to recognize good performance or to discuss how to get performance back on track if it's weak.

Thirdly, 'core' processes need to be put in place so that the activities can be easily executed and become a regular part of 'doing business'. This should include good governance with key data on activity and progress visible and reportable right up to Board level, giving the Board some important indicators about performance, talent, succession strength, competitiveness/cost and the 'employee climate.'
All of this helps to institutionalize human capital activities and build a high performance culture.

KT: Jeff, what other strategies can firms deploy to ensure efficiency and cope with the workload?
A: The hardest thing to do in business is to grow. More customers means more staff to cope with the increased volume and more products means more staff to design and deploy those new products. But it's impossible and it's not affordable to simply keep adding administrative staff, including HR staff to cope with an ever larger organization. So what to do?

Improved technology can often be the answer to managing growth affordably. Modern HR systems can for example smoothly manage the recruiting pipeline by eliminating paper processes; they can manage and track employee performance management as well as training and development.
Streamlining internal processes by eliminating paperwork, improving data quality, and demonstrating to your staff that you are serious about training and career development, management can "walk the talk" and reinforce the notion of a high performance culture.
HR systems are no longer just about processing payroll they can play a strategic role in managing the entire enterprise and delivering on the employee promise.

A second area of opportunity is outsourcing. Many executives complain that they spend too much time worrying about internal issues, including the increasing demands placed on IT and HR service delivery, to focus on customers and revenue growth. One answer is to outsource. There are world class BPO (business process outsource) consultants and firms that will take on your back office problems, sort them out and have you running smoothly and more cost effectively than it was possible to do with in-house staff. Relieving you of the day-to-day operational headaches allows you to focus on your customers and their needs without having to worry about back office issues.

Technology and outsourcing are two critical areas of opportunity for all business today.
*Ahmed Al-Nouri is chairman of Wolmac & Partners, a Kuwait-based consulting firm specializing in the design and implementation of international standard Human Capital, Technology, Corporate Communications and Outsourcing practices. Jeff Wolfers and Chris Macklin are Managing Partners with extensive experience of designing, implementing and managing world class processes in both global and regional organizations.

By Ben Garcia

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This article was published on 26/10/2014