By: Morné Stoltz, Head of MiWay Business Insurance

The success of a business depends on many factors, but there are good reasons for arguing that a company’s people must be regarded as a critical lever for success. Consequently, smart business means smart people management.

The notion of the six capitals captures the idea that business does not only require financial capital to deliver returns. It also needs manufacturing, social and relationship, intellectual and human capital —not forgetting the natural capital on which everything depends.

This being said, human capital is rightly regarded as somewhat special for several reasons:
• It has agency. Human capital is the only capital that has a mind of its own. If employees are not happy, or get a better offer, they will simply leave your employ.
• It costs a lot to acquire and maintain. Human capital is expensive to acquire, and must then be trained regularly. It also requires benefits like canteens, medical aid, pension, holidays and so on. It thus represents a cumulative investment, and we all know that investments need to generate returns or they are not worth making.
• It can be a value multiplier. Properly trained and fully engaged employees deliver more than just output. Their contribution also includes building relationships with clients and business partners, collaborating with and motivating colleagues, acting as a repository of institutional memory, and coming up with innovations that save money, improve sales or open up new opportunities. In this way, employees can add tremendous value to your business, and their potential to do so increases the longer they work for you. Alternatively, getting an employee to the point at which he or she is capable of adding significant value is a long and costly journey.
And, of course, your star performers are most at risk of being poached by competitors, who thus stand to benefit from your investment in that person—adding insult to injury!

So, if your employees are such a valuable asset, how do you maximise their contribution?

Star performers are always innately motivated people. To take advantage of that, you need to recognise that highly motivated people need affirmation that their contribution is valued, and to be doing something that is worthwhile. Managers thus need to provide positive feedback and acknowledge achievement.

And take a leaf out of Google’s book: it mandates that employees spend at least 20% of their time doing “what they believe will benefit Google most”. Such projects typically yield huge dividends for the company, and ensure that employees remain engaged.

More generally, research shows that employees find it extremely demotivating not to understand the big picture into which their work fits and not to have any control over their work schedules. Other big employee turnoffs include intrusive or punitive rules, such as overzealous attendance policies or appropriating employees’ frequent flyer miles. Rules like these work against the kind of collaborative atmosphere that nourishes high performers.

Collaboration is also hampered enormously by an office atmosphere that is characterised by conflict with other employees and, of course, any kind of prejudice.

Companies should also think carefully about how they treat employees. It might seem fair to treat everybody equally, but in fact that ends up discriminating against those that work harder and smarter. The flip side of the coin is that poor performers suffer no consequences – even though it is their colleagues who have to pick up the slack.

These are general points, but employees are individuals whose preferences are likely to change as they get older. Smart employers who understand the power of an engaged and experienced workforce will put a mechanism in place for asking employees regularly how they want to work and what they like or dislike about their current work conditions.

For example, somebody who is motivated mostly by good benefits might, once his or her children are grown up, become more interested in working on projects that have a specific focus.

Some food for thought in parting, everything one reads about employee motivation mentions fun. Avoiding the pitfalls mentioned above will go a long way towards creating a pleasant and productive workplace that people want to visit, but the odd bit of fun is also necessary. Everybody has his or her own idea of what constitutes fun; again, and this should be your watchword, ask your employees.

MiWay is an Authorised Financial Services Provider (Licence no: 33970).