There’s been a shift from calling employees a company’s greatest “asset,” as if they were possessions, to something of much more value — equity. Dr. William A. Schiemann, CEO of Metrus Group, shared his company’s research which found that top-performing companies have high People Equity.
In my work with the workplace research firm Metrus Institute, I discovered a concept we coined “People Equity.” It has been powerful in helping us to understand how well people and their talents can be optimized in organizations — in other words, being all they can be.
People Equity is composed of three factors that are crucial to optimizing talent in organizations — abbreviated as ACE (Alignment, Capabilities, Engagement).
- People who are aligned with the organization’s goals, its values, its customers, and others with whom they work.
- People who have the “right” capabilities — the competencies, information, and resources — to meet or exceed customer or client expectations.
- People who are engaged with the organization — and are willing to put in additional effort as needed to accomplish goals, willing to recommend the organization as a place to work, and willing to volunteer for special projects at work, or in the community.
When an organization has high People Equity, the Metrus Institute has found that:
- Organizations are more profitable or reach their goals more effectively.
- Customers are more loyal and buy more.
- Employees stay with the organization longer.
- Quality is higher.
The organizations that achieve high People Equity (high alignment, capabilities, and engagement) share a distinct advantage over their competitors because they have discovered a way to optimize the talent of people in their organizations. And the individuals also win.
What Happens When ACE is Low?
Another way to think about how ACE affects us is to consider what happens when ACE is low. Low ACE leads to many dysfunctional consequences such as overstaffing, burnout, high rework, and low productivity.
These aren’t just corporate problems — they are individual concerns as well. People lose energy, stress levels send them over the edge, and they begin to unravel in both their work and home life. Individuals who are in situations with higher conflict and lower teamwork, face monotony or frustration due to more rework, deal with increased stress that can lead to burnout, have low energy levels, and many become apathetic or cynical. Those we have interviewed over the years describe coming home drained or overwrought, often leading to strained relationships with spouses or children. Some who can will leave the organization, but that also can create family and career disruptions. In short, low ACE hurts both the organization and the individual.
In addition to assuring human resources, senior leaders and managers are all on board; adequately recognizing and incentivizing employees are proven ways to help them reach their full potential.
Read the entire article from Northstar Meetings Group.