Is HR Strategy People Strategy?

As we approach the holidays, our thoughts are naturally focused on people – family, friends, neighbors, and co-workers. Relationships are important to us and we gravitate toward community, even us introverts. But relationships can deliver both positive and negative energy and we each have to individually work to maximize the positive and minimize the negative.

?So when we talk about “people strategy” from an organizational perspective, are we only speaking of creating a good place to work with respect, collaboration, and courtesy? And is the correlation between a good place to work and stronger performance validated?

Many say yes, that creating a strong culture and respectful work environment has been proven to result in stronger results. Great Place to Work (GPTW) may be known to you as their certification of being a “Great Place to Work” has become a goal for many companies. But GPTW is also a company that conducts research and sells services to measure and improve workplace culture, and in 2021 they were acquired by UKG, the tech company created when Ultimate Software and Kronos Software merged. So, according to GPTW, there are direct results between a strong people strategy to create a great place to work and performance. And content on their website lists 5 factors:

?1.??? Great workplaces have higher retention rates.

2.??? Great workplaces have lower levels of burnout.

3.??? Great workplaces innovate faster.

4.??? Great workplaces rebound faster from a recession.

5.??? Great workplaces have higher stock returns.

?I agree that workplaces that are considered “a great place to work” by employees tend to perform better. But I don’t necessarily agree with GPTW’s math. Based on my experience, measurements of all five factors are heavily influenced by the management of a company at all levels - from executives to the front lines.

If managers are toxic and/or incapable of managing teams in a collaborative and “manage for results” environment, retention rates will be high. Management training needs to do more than train new managers for a day or present management training once a year. Management needs to be supported through continuous improvement, toxic screenings, employee surveys, and 360 degree feedback throughout the year.

Burnout occurs when jobs and workloads are poorly structured and management is not driven by managing for results. When a manager doesn’t know what results to expect for high performance in any position within their scope of management, they tend to manage based on “butts in the seat.” If you’re here and you look busy, you must be working. If no one is complaining about you and you aren’t missing deliverables, you must be performing. This is lazy management.

The ability to innovate is driven by the ability to respond to a new business requirement, need or market condition. It means having the flexibility, attention and tools to create something new. Again, management creates the openness and the fertile ground to allow people to create. A newer company is innovating constantly because they are new in the market. As the company or organization ages, it becomes more process driven and standardized. This is a natural tendency and necessity as the volume of work increases. At this stage – it is the management that will create the opportunity to innovate within their own sphere.

If management has built success in factors 1-3, rebounding from a recession faster is a byproduct of the stability of the teams and internal operations of the organization. Having the ability to assess and respond to the current conditions and needs of their customers – both internal and external – is easier because time and effort are not wasted on poor practices and toxicity. Through factors 1-3, management has gained respect and exhibited leadership to teams and stakeholders. To move faster is a byproduct of respect and trust.

Finally, higher stock prices are not necessarily correlated to a great place to work. They are a product of many different variables. But if management succeeds at factors 1-4, then performance becomes more reliable and predictable. As Warren Buffet once said, he looks at the management of a company when he considers whether or not to purchase their stock – is the organization well run? Do they have a strong management team?

In all factors, to me, focusing on the people strategy is only a part of the plan – and actually a smaller part. To create performance, you have to DELIVER on the components that create a great place to work and those components require a lot of operational nuts and bolts. If you build your plan by recognizing and resolving issues within your operational foundation, then the organization has more trust and respect from the workforce and more bandwidth and tools to implement cultural goals.

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