Business performance is one of the top priorities of many companies. Combining management and system analytic processes, companies constantly strive to drive business performance to achieve their predetermined mission, vision, goals, and objectives.
Business performance management (BPM) managers need to know several key points in order to effectively manage and drive the company’s performance forward. Many of these key points can be collaborated with Human Resource strategy so that a more efficient and seamless process can be employed.
It’s important to understand the key tools in BPM before a manager can incorporate Human Resource strategy to drive business performance to greater height.
Business Performance Key Tools
1. Planning and Budgeting
To understand the capacity of the business, a manager should closely draw out a plan of the company’s directions, areas of development as well as budgeting for the coming year.
This planning and budgeting normally covers a period of 12 months where annual reports are generated for BPM managers to make comparison and improvement where he or she finds necessary for the business’ future performance.
The plans and budgets that have been drawn can be subjected to changes throughout the fiscal year of an organization. However, many BPM managers do not make this a practice where if needs arises, company’s plans and budgets are often revised at a quarterly interval.
2. Key Performance Indicators (KPI)
Having clear and definitive key performance indicators (KPI) is crucial to make sure the company’s performance stays on track. It serves as a navigation tool to tell the company whether it’s on the right path or it’s wandering off course.
These KPI are often communicated to the employee at the start of an employee’s introduction to his or her own work unit. Due to the existence of various departments in one organization, KPI are often categorized into two sections, where one is on organizational level and one is on process level. Employees of the organization need to satisfy both KPI categories.
3. Balanced Scorecard (BSC)
This management tool was designed to communicate strategic business’ objectives and place it alongside the workforce’s performance measures as well as action plans. The purpose of BSC is to make sure that the business strategic objectives can be executed and will achieve its intended purposes.
BSC is used to align a company’s business activities to their vision, mission, goals, and objectives. Through this tool, processes and procedures are streamlined so that management is more “balanced” throughout the organization.
4. Business Excellence Model
Using the non-prescriptive framework for business excellence that is developed by the country’s national agencies will help to keep companies up to par with business quality standards.
The business quality standards will vary according to country. For outsourced companies, the business excellence model is based from the country of origin, but with additional business standard according to the outsourced countries.
5. Six Sigma
Six Sigma’s DMAIC (Define, Measure, Analyze, Improve, Control) is one of the most efficient tools to drive business performance. Proven to be effective by many companies that have employed, it, BPM managers can rarely go wrong with this.
The usage of Six Sigma can be applied to any level of the process in an organization, making it the tool preferred by many management boards. Every employee is able to be apart of Six Sigma and this is an excellent way to encourage positive workplace environment among the workforce.
Knowing what are the key tools in Business Performance Management is only half of the equation.
In order to ensure that the workforce of a company is on the same page with the management, there are several other things that can be done. It is important to ensure that every staff employed is aware of the company’s mission, vision, goals, and objectives in order to navigate the company in the direction that will not only return revenue, but also one that can sustain itself in the future.
Through Human Resource strategies, business performance can be improved so it can be driven forward to fit seamlessly into the organization’s operation.
So how does Human Resource Strategies help a company to drive its business performance?
Using Human Resource Strategies To Drive Your Business Performance
Human Resource Strategy is the development of strategies that will not only help to support, but also build a company’s business and organizational success. Through careful planning and capacity management, HR strategies can help to realize the company’s goals and objectives.
Incorporating these strategies to augment business performance is a step that proved to be a wise and beneficial one, not only to the business, but also to the workforce. Understanding the business needs, assessing the workforce capacity, and analyzing gaps in the organization can all contribute towards an excellent business performance.
Based on the key tools stated above for Business Performance Management, we will look into how to incorporate Human Resource strategies into these tools so that a more dynamic BPM module can be constructed.
1. Planning and budgeting through capacity management
Capacity development and planning is crucial for any business, as it serves as an assurance of the ability to commit the organization to the business. It’s not only vital to the sustainability of the organization, but it’s also important to be aware of the supply and demand throughout the business so that future gaps can be filled.
Assessing the current capacity of an organization will allow the flexibility and readiness to search for the optimal solution should any of the gaps forecasted happened. Taking into account the workforce, finances, and surpluses, Human Resource can make sure that the organization’s plans and budget schemes are well within parameters and only incur affordable loss.
Capacity assessment doesn’t only cover business finances and execution; it also involves employees’ skill sets. These parameters are crucial for BPM managers to gain an understanding of the business’ capability to grow. Human Resource strategies can fit into this through by assessing the current capacity and tie that into the projected plans and budget schemes to make sure that the company’s plans and schemes are viable and measurable.
Without an accurate assessment of capacity, business performance management will not succeed in its effort to drive the organization forward.
2. Aligning Human Resource KPI to the company’s strategy
Operating as an entity that provides guidelines and support on practical policies, operational procedures, and support to the workforce, Human Resource stands by its KPI to align itself with an organization’s mission, vision, goals, and objectives.
In order to drive business performance forward in an efficient way, it’s imperative to make sure that the Human Resource KPI are aligned with that of the organization’s. Through transparent policies, Human Resource’s KPI can be synchronized to adapt itself into the business performance management’s KPI and modules.
This step is imperative in making sure that the business performance direction is synchronized with that of Human Resource’s so that HR strategies are able to support and improve the organization’s KPI.
3. Using BSC to communicate performance management
Human Resource has the responsibility to bring new hires up to par with the company’s mission, vision, goals, and objectives so that new employees are able to assimilate into the organization’s objectives and work culture.
Many managers choose to present the BSC to the employee during performance appraisal to drive home to goals and objective of the business. Through this, the employee is aware of the expectations placed on him or her. Additionally, setting clear and transparent direction will encourage the right employees to strive forward in helping to drive the business’ performance management.
When it was first introduced, BSC was only used as a performance management tool to ensure the workforce of an organization stays within the accepted standard. But now, the Balanced Scorecard is being used as a tool of full strategic planning of an organization. Far from being just a tool to measure the business and workforce’s performance, BSC now helps BPM managers to realistically measure areas of development that require improvement.
4. Employing business excellence model through compliance
Compliance team of Human Resource must be able to understand and adapt into the country’s business quality standards if the organization is going to grow and expand its brand.
It’s important for a company’s business excellence model to be consistent with the company’s compliance. Conducting the operations based on these guidelines and benchmark, a company may able to drive its business performance forward.
BPM managers are also required to know and understand the legal aspects of a business in terms of federal, state, and local requirements. Using an business excellence model that is compliant to the nation’s standard will ensure smooth operation and safety in conducting a business.
5. Six Sigma training
It’s crucial for the right people to be hired by Human Resource. Hiring the right people the first time is essential in making sure that the right kind of people joined the company that can help to ensure its consistency and quality. Even with the right recruitment, Human Resource and the organization need to be ready and further develop the talent acquired.
Through training provided and conducted by the Human Resource department, every member of the organization is able to be equipped with the right knowledge and skill sets to understand Six Sigma. The more employees who are trained in Six Sigma and more aware they are on how does Six Sigma helps the business, the better prepared the organization is for changes to drive the business performance.
Six Sigma belt holders can train employees of an organization. The majority of companies have in-house Six Sigma trainers who are certified to not only conduct training sessions, but also to lead improvement projects for the company. However, many companies also bring in external Six Sigma trainers, especially Black Belts when there are major projects required for the business.
Incorporating Human Resource strategies into a company’s business performance management will produce a more efficient and effective business excellence model that will work into bringing in higher revenue. Furthermore, having an efficient business excellence model in place will help to sustain the business well into the future. Through close capacity assessment and careful planning, a business can achieve excellent business performance.
However, it’s also vital to remember that the company is only as strong as its workforce.
Human Resource should serve as a fair, honest, and non-partial entity that focuses on the workforce’s merits to complement the company’s mission, vision, goals, and objectives. By making sure that the employees are well taken care of, especially through Human Resource Maintenance efforts and programs, it would be much easier for an organization to drive its business performance further.
It’s worth to remember that in a company’s efforts to drive business performance forward, it should neglect its most important asset – its workforce. It’s highly recommended for organizations to center its business excellence model/s and business performance management around its workforce so that it would be able to make full use of its most valuable asset.
Choosing to incorporate Human Resource Strategies into business performance management can prove to be a wise and advantageous decision for an organization. With careful planning, constructive discussions, and mutual agreement, you can drive your business performance further with the support of Human Resource Strategies.