You are on page 1of 1

PUTTING PEOPLE FIRST FOR ORGANIZATIONAL SUCCESS

Building a business is similar to building a house. You need a very good foundation. Although a good foundation is vital, alone it is not sufficient for business growth. The quality of business products and/or services is also important. However, we can have a great product or service, and still fail to thrive. Because there is another essential element - People. In an article titled Putting people first for organizational success, Jeffrey Pfeffer and John Veiga discussed the imperative role that people play in business success. According to the authors, some organizations in todays competitive market, more typically pursuing a labor-cost minimization strategy rather than a people-first strategy by the means of 1) Cost-cutting measures. 2) Reengineering processes. 3) Substituting temporary workers for full-time permanent staff etc. Organizations with problems typically look to staffing cuts as a first response. However, there is a substantial and rapidly expanding body of evidence that demonstrates the strong connection between how firms manage their people and the economic results they achieve. Microsoft, Google, Hewlett-Packard, Lincoln Electric, and Starbucks pursue peoplefirst strategies. Evidence suggests that successful organizations put people first. Employees are a companys only true competitive advantage. Competitors can match most organizations products, processes, locations, distribution channels but cannot match the skilled people. So, we know that investing in people is an effective way of building a business and increasing profits, but exactly how is this done? In his book, Pfeffer identifies seven dimensions that characterize most of the systems producing profits through people. They include: 1. Employment security. 2. Selective hiring of new personnel. 3. Self-managed teams and decentralization of decision making as the basic principles of organizational design. 4. Comparatively high compensation contingent on organizational performance. 5. Extensive training. 6. Reduced status distinctions and barriers, including dress, language, office arrangements, and wage differences across levels. 7. Extensive sharing of financial and performance information throughout the organization. Although some of these may seem contradictory to conventional wisdom, research and experience have found they can be very effective in increasing profits. However, as with any type of effort to improve organizational effectiveness, these have to be implemented in the right way.

You might also like