Understanding the People and Performance Link

This report, the most in-depth of its kind to date, confirms the powerful relationships between HR practices, employee commitment and operating performance. It is based on a three-year investigation which looked at the HR practices, staff views and performance in 11 large organisations including Jaguar Cars, Nationwide Building Society, Selfridges and Tesco. The study provides answers to why and how people management practices influence business performance - to unlock what has been termed the 'black box'. The key conclusions include: the most carefully thought-through HR strategy is a waste of time unless it is embraced by line managers who have the skills and understanding necessary to engage and motivate employees; where effective HR practices are not in place, levels of employee commitment are up to 90 per cent lower; an organisation needs a clear direction and purpose, beyond the bland mission statement or generic goal of financial returns, which engages, enthuses and unites people. At the Nationwide Building Society this is a commitment to mutuality. At Royal United Hospital Bath it is saving lives. This 'big idea' appears essential in motivating and directing people behind the strategy of the organisation.