Some important research currently being conducted at Birkbeck College , London , by David Guest and his colleagues, adds to the weight of empirical evidence that supports our intuitive insights. Guest's research builds on earlier work by Malcolm Patterson et al which concluded that HR practices can improve performance by developing skills, increasing motivation and job satisfaction, and enabling individuals to make full use of their abilities.

Marc Thompson of Templeton College , Oxford , recently published research in the aerospace industry which showed that modest reforms in HR policies and practices can deliver considerable business benefits. Thompson discovered that it is both the number of HR practices introduced, and the proportion of employees affected by these practices, that are key differentiators between successful and less successful organisations.

David Guest's work forms part of a larger research programme that will be continuing to report its findings over the next two years. The bad news from Guest's survey of more than 1000 CEO's and HR Directors/Managers is that few business leaders are taking the evidence seriously enough to put people management on a par with other investment decisions. (Only 10% of CEO's agreed that people are a top priority ahead of finance or marketing). This is in spite of the fact that most CEO's in the survey acknowledged the link between HR practices and business performance. Perhaps this apparent paradox has something to do with the way HR effectiveness is perceived by business leaders (see the final paragraph of this article).

There is general agreement then, that good people management practices can make a difference. A main issue at hand is how the difference can be achieved. In particular, the challenges seem to lie in understanding how to effectively translate strategic intent into practical implementation, and why a particular course of action might be successful in one situation but not in another.

Research findings are invaluable in convincing business leaders of HR's impact, but they will only be useful if we are able to place them into the context of individual organisations and identify practical actions to be taken which are directly relevant to real business issues. The Chartered Institute of Personnel and Development (CIPD) has reviewed a wide range of international research with the aim of identifying the areas within which practices need to be developed in order to achieve improved business performance. In this regard, the findings indicate four main areas of people management are of critical importance:

• Identificat ion of the knowledge required to meet the organisation's goals and to satisfy its customers.
• Investment in people by introducing and encouraging learning processes designed to increase capability and align skills to organisational need.
• Definition of the behaviours required for organisational success, and action to ensure that they are encouraged and rewarded.
• Capturing the commitment of people to the organisation's mission and values.

However, it is not enough simply to identify the key high performance factors. The impact of these factors depends entirely upon how they are implemented and used practically, and how they relate to other strategies and practices. The CIPD analysis indicates that these HR practices need to be:

• integral to business operations.
• designed to complement each other.
• capable of presenting a credible and flexible approach to people management.
• capable of creating business opportunities.

The evidence doesn't support the idea that a single specific group of practices is associated with improved performance in all contexts. There is no one-size-fits-all solution. Integration and fit, between HR practices, and with other business strategies, is an important factor to consider in the people-performance relationship. It is important to identify a range of practices that can be used flexibly to deal effectively and efficiently with the needs of employees.

There are many various factors that influence employee effectiveness including the diverse needs and expectations of the workforce. An implication is that organisations should not expect to improve performance by a simple, one-off change. Rather, a complementary and contextually appropriate set of changes, not the latest fad , should be sought. In order to achieve this, there is a strong argument for people management practices to be facilitated by an HR function whose members work proactively as strategic business partners and who can lead discussion on how best to organise and implement its strategy. This has implications for the level of competence required by HR business partners.

In Conclusion
HR professionals need to familiarise themselves with the current research supporting the argument that HR practices impact on business results. They need to take confidence from this and be able to speak credibly to their business leaders and line managers citing the evidence in support of their contention. They need also to see that it's not so much the HR vision, and focus areas at a strategic level that make the difference (although these are obviously important) but rather the practical application adapted and integrated into specific organisational contexts that will have the desired result.

It's interesting to note one of David Guest's findings that, in general, CEO's and HR Directors/Managers gave a low rating to the performance of the HR department and to the effectiveness of HR practices in their companies. HR professionals need to be seen as a real “value adding” business partners equipped with the concepts and practical tools to enable the organisation to achieve its objectives.

This, of course has major implications for the levels of competence required within HR circles and the way we train and develop our HR professionals of the future.