Mike Hohnen

A growing body of evidence points to the financial benefits of superior human capital management practices. Russell Investment Group has tracked the stock price performance of publicly quoted companies on Fortune’s 100-best list for several years, and its findings are persuasive. Someone who invested equal dollar amounts at the beginning of 2005 in the stock of publicly traded companies on the list would have ended the year up 12 percent, versus 4.93 percent for the Standard & Poor’s 500-stock index.

Over the longer term, the link between a high-quality working environment and stock market success is even more compelling. Russell found that the 100-best portfolio, adjusted annually to reflect changes to the list from 1998 to 2005, provided an annualized return of 15 percent, versus 5 percent for the S&P 500.

European companies were also scrutinized to see if there was a correlation between good employment practices and a consistent margin of outperformance in the stock price. Russell showed that if an individual had invested £100, or $175, over five years in the publicly traded companies on the 2005 list of the best workplaces in Britain, this investment would have produced nearly double the return on investment than the FTSE all-share cumulative index, or £157.48 versus £83.48.

“Companies that devote resources to their human capital have a competitive advantage as a result of the high trust relationships between employees and management,” said Ann Watson, head of human resources at Russell. “This advantage manifests itself in higher levels of cooperation, greater commitment, lower employee turnover and improved customer support.”

IHT

Training experts say companies continue to repeat old mistakes. They offer off-the-shelf courses or seminars that aren’t aligned with employees’ everyday responsibilities. They schedule classroom training when the trainer is available rather than when employees need to enhance their skills. They offer lectures, even though adults generally fare better with interactive learning.

They pluck trainers from within the ranks, even though these subject experts are unlikely to be skilled facilitators. They allow managers to skip the training sessions offered to lower-ranking employees, which means they won’t know how to reinforce what their employees have learned.

Worst of all, companies don’t follow through; they offer a training program, check the task off their list, and forget about it.

“Organizations do that all the time,” says consultant Marc Rosenberg of Marc Rosenberg and Associates, in Hillsborough, New Jersey. “They launch programs or events with great fanfare and then say, ‘Well, we delivered it, we gave them a feedback form, and they liked it.’ Then people go back to the same bad work environments, where they don’t have the tools or reinforcement they need to carry what they’ve learned over to their jobs, and no experts to turn to if they have a problem. Those organizations are not designed or structured to support what employees have learned in class.”

It doesn’t have to be that way. Training professionals have plenty of experience with what does and doesn’t work, as do many companies. General Electric Co.’s management training program is legendary. (Action Learning Based . Ed)

CFO.com