Putting people first for organizational success

Summary:

Although there is data that demonstrates that motivated, committed, well trained and well paid workers are an important source of profitability and those companies that focus on the well-being of their employers perform better that those who dont; management focus on financial performance applies cutting costs measures such as downsizing, outsourcing, which leave aside the human aspect in the organization. There are seven people-related practices that according to literature are responsible for organizational success: 1 .Employment security 2. Selective hiring Focus on cultural and value fit, and not only in qualifications 3. Self-managed teams and decentralization of organizational design Increased sense of responsibility increases initiative Lean structure by absorbing layers of hierarchy and administration 4. Comparatively high compensation contingent of organizational performance 5. Extensive training 6. Reduction of status difference 7. Sharing information Since Jeffrey Pfeffer and John F. Veiga had done extensive work in evidence-based management (EBM), it is no surprise that the first subsection of the article, Show Me the Evidence relates hard facts to support the articles theory. The first example is Apple Computers (The Apple Story), in which Apple seriously downgrades its workforce numbers to try to regain their market leadership in the personal computer industry. Instead of increasing their profitability by decreasing labor costs, Apple made its employees insecure about their futures and became less engaged. In turn, this has led to nearly irreparable damage to the companys image in the minds of its employees. A study done of the five-year survival rates of initial public offerings shows that companies who put people first have a 7.05% decrease in turnover, a $27,044 greater return on sales per employee, $18.461 more in market value per employee, and $3,814 more in profits per employee. More research presented in the article shows that the five-year survival rate of another study of companies in non-financial sectors cited employees as an important source of competitive advantage.