Thursday, April 2, 2009

Our Employees- " The Most Valuable Intangible Assets "

1st April - Corporate India is heading to yet another Financial Year beginning! Companies across India would have finished their stock taking (measuring the quantities of stock held) of raw materials, semi-finished goods, finished goods, capital goods etc. on 31st March. This stock will find a place in the last years Financial Statement as Closing Stock and current year Financial Statement as Opening Stock.

While starting the journey to another financial year, let me raise an interesting question to the Corporate world- along with the stock taking of our physical goods, don't you feel its important to take the stock of skills level of the most valuable asset in our Organization - the Human Asset?

It goes with out saying human asset is the key intangible asset for any organization. In today's dynamic world, it is the human assets and not the fixed or movable assets that differentiate any organization from its competitors! If so,during last financial year ending, how many of us have taken the stock of skills level of our human assets?
" Our ASSETS walk out of the door each evening. We have to make sure that they come back the next morning," says Narayana Murthy, Non-Executive Chairman and Chief Mentor of Infosys. In today’s knowledge economy, the single most important and powerful factor that differentiates one organization from another is the Human Resources (HR) or Human Assets.

While humans can be physically replaced, the skill-sets and knowledge of a person leaving an organization cannot be exactly replaced by the successor. It is widely held among business decision-makers that the skill of employees account for 85% of a company's assets. Employee skills determine the speed and success of organizations.

Most of our employees are hired to do specific functions based on current need. As the strategic direction of our organization changes, these employees (human assets) yield less and less. In other cases, employees hired for a specific function never have their full capabilities assessed or explored. Further, there is a general inability to quantify the capacity of human resources. Consequently, the organization cannot effectively determine when it has reached its affordable human asset capacity level.
It is also important for us to understand that the skill sets of our employees helped us to reach certain targets during the last financial year. It is obvious that we will set an ambitious target during this financial year probably with the same set of employees. Remember, the skills level of our people enabled us to reach here but is it enough to take us to the next level? Should we take the stock levels of skill sets they possess and address the gap if any? I believe performing a skill gap analysis will help organization to understand gaps in performance and possible areas for training and development.
Once the benchmark of critical and preferred competencies is established for the role, the employee and the manager can assess the level of proficiency for each competency. According to Joni Rose, a skill gap analyst, this can be accomplished using one, or preferably a combination, of the following techniques:

Performance Reviews
– a standard performance review usually includes a discussion between the employee and his or her manager to assess the competency proficiency. A strategy for professional development to allow the employee to improve their performance or improve their chances of a promotion can be included in the review.

– interviewing managers and employees with open ended questions allows for qualitative data to be accumulated. Resistant attitudes, misconceptions and other barriers to good performance may be revealed using this methodology that may not be revealed during a manager-employee performance review conversation.

Customer Feedback
– if customers or stakeholders can be surveyed or interviewed they can be a great source of feedback on the performance of a group of employees or individual employees.

Performance Tests
– certain skills can be tested using standardized tests and metrics can be measured to provide quantitative data (multiple choice, fill in the blank etc.) of performance levels.

– A checklist of operational standards can be made and employees can be checked against the list.

Once the skills gap have been identified, strategies for closing the gaps can be determined. Strategies include training (if a lack of knowledge is apparent), job role reassignment (transfers, portfolio changes), allocation of new resources, improvement of rewards and incentives, goal setting, or termination (if the fit can not be corrected by other means).
As our employees talent, ability, and grasp of the business improve, some group members are likely to realize their own high growth potential. We will probably suffer minor setbacks when losing a valuable team member to a better job or even another company. Be happy; this is one of the best indications that we are giving our employees important skills.
By helping employees to scale up their critical skills, we will be able to establish skills accountability and foster continuous learning - a key strength in today's marketplace of constantly changing environment. Lets create and promote a culture of knowledge and innovation in our organization, and respect Human Asset - the most valuable Intangible Asset.
While wishing you a successful financial year ahead, let me remind you to take the stock of skills level of your employees and fill the gap if any! Do visit my website for more!


Anonymous said...

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Our 50% of problems are due to Acting without thinking & rest 50% are due to thinking & not acting.

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Anonymous said...

Very true shammem. Seldom we think about our employees as our most valuable assets. Thanks for reminding the same and keep writing. K.Rao,Singapore

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