Measuring the Added Value

Based on the last post, we defined adding value as how an individual increases the efficiency and effectiveness as well as ultimately the profit of an organization through his or her personal contribution.  Although most of us measure the efficiency and effectiveness of our organization in some manner, rarely do we have a complete causal “picture” of what drives the various components of efficiency or effectiveness.   Similarly, most of us can identify the characteristics that should enhance the probability of positive outcomes, but we may not be sure how best to assemble them to maximize the results.

Given these limitations, what are the three things that we need to know in order to measure those characteristics that add value?

  • Know the characteristics
  • Identify the impact of each
  • Know How to Build on Them

Know the Characteristics

What are the characteristics that lead to an employee increasing value?  Most of us would agree that showing up, being ready to work, and having the necessary skills are all part of being successful as an employee.  Empirical research on value adding characteristics has revealed that certain personal characteristics correlate with job success. In most research, the characteristics fall into three categories: abilities, behaviors, and skills.  Some organizations test for these attributes as part of their hiring process, but few buy into the notion that once a person is on staff he or she can develop these traits.  As a result, most organizations look to their most successful employees and create an inventory of characteristics to use as their standard for hiring.

Identify the Impact of Each

Figure 1: Value Adding Characteristics

When reviewing current practices among a sample of organizations in different industries, 25 characteristics appear the most often.  Figure 1 summarizes most reoccurring and the relative importance of each characteristic based on a survey of 250 organizations conducted by HCS in 2010.  Customer service, professionalism, and accountability are the most common appearing in tools of 80 percent of organizations. Communication, job knowledge, punctuality, and reliability occupy the second tier followed by adaptability, compliant, decision-making, initiative, interpersonal skills, problem solving, and team orientation in 60 percent of surveyed organization materials.  Physical ability is the least occurring which coincides with the changes that are occurring in the US labor market.  An interesting observation is that the list does not include motivation or engagement as separate characteristics since the focus is more on the associated sub-factors.

Know How to Build on Them

The list in Figure 1 holds a number of skills that could be improved with an internal investment of time and training.   Most organizations offer professional development related to job knowledge, communication, adaptability, decision-making, problem solving, teamwork, and interpersonal skills.   However, before making an investment to build these characteristics, an organization should determine an individual’s current ability, which change in characteristic would result in the largest valued add, and how to transition the individual’s performance.

Most organizations are taking the first step to finding what leads to value, where it should be applied, and how it can most benefit the organization.  In order to remain competitive in the future, value management is only going to become more important.

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