Human Capital Metrics: A Catalyst For Change*

By Lauri McBassi & Dan McMurrer

----------------------------------------------------------------------
Over the past decade, we have been working with colleagues from around the globe and from a variety of disciplines to quantify human capital management and use the resultant measures to predict future organizational performance - both financial and non-financial.

Our intent is to provide a critical missing link for creating and sustaining competitive advantage for organizations operating in an increasingly knowledge-intensive, global economy-and in so doing, serve as a catalyst for change.

Here's a summary of some of what we've learned to date:

There is a core set of "human capital drivers" that predict organizational performance across a broad array of organizations.

These drivers have the following properties:

• Predict variations in financial performance both across organizations and within organizations
• Also predict a broad array of non-financial outcomes
• Are not all equally important across organizations, or even within a single organization over time

Using relatively straightforward statistical tools (comparable to those used in six-sigma analysis) it is possible to drill down into human capital drivers to identify the specific factors that are the most important drivers of a particular organization's performance at a particular stage in its evolution.

It is possible to quantify the quality of leadership (and management) and identify its impact on organizational performance.

The factors that determine employee satisfaction and those that determine organizational productivity/ profitability may be very different.

WANT TO KNOW MORE? More detail on this topic can be found in our new white paper, available at www.mcbassi.com/pdfs/HC+OrganizationalPerformanceWhitePaper.pdf.

*Reprinted by permission of McBassi.com