Top firms emphasize ‘people, service and profitability’

By Bill Leonard

The most successful companies follow the credo of “people, service and profitability,” according to Chapel Hill, N.C.-based consulting group Best Practices LLC, which recently performed an intensive benchmarking study of the business practices of 10 top U.S. firms.

“The thinking is, if you place people first, then good customer service and profitability will follow,” said Keith Symmers, vice president of the firm, which published the study, “Optimizing Human Resources Organizations: Managing Staffing, Roles and Budgets.” This philosophy has definitely worked for companies such as Southwest Airlines and the other highly successful organizations that were examined, Symmers said.

Symmers said the study was launched when a client asked his firm to benchmark the business functions of highly successful organizations. Symmers added that the HR practices portion of the research produced some of the most compelling results.

“Employer interest in good HR practices is definitely on the increase,” Symmers said. “In the past, benchmarking HR practices was usually an afterthought. Employers just didn’t place a high priority on HR, but that has definitely changed. Businesses are becoming more and more attuned to the critical role that HR has in improving the overall performance of an organization.”

Organizations with model human resource practices typically emphasize excellent communication with employees. Good communication is more than providing newsletters and corporate intranets; it requires HR to define its role within an organization and to ensure that employees at every level understand, accept and support the role of HR, according to Symmers.

“We found that best practices in HR management just naturally flow from excellent corporate communications,” he said.

The companies studied were Coca-Cola Corp., Congentrix Inc., Constellation Energy, Dow Agro Sciences Corp., Entergy Inc., the FPL Group, Hayes Lemmerz Inc., Mirant Inc., Orion Energy Inc. and Progress Energy Inc. According to Symmers, the companies were chosen because of their success and reputation for excellence within their industries.

“It has always been difficult to measure and link HR practices to an organization’s profitability,” said Symmers. “But an increasing number of employers now understand the effect good HR practices have on corporate performance. This study clearly shows that businesses which ignore or shortchange their HR elements will eventually find they are back of the pack and can’t compete with organizations that have developed and invested in good HR practices.”

Source: www.shrm.org July 2005