Do HR Innovations Help?

Flexible hours, working at home, job sharing and training popped. Some of these practices are still used, but not to retain staff. Nowadays, it’s more likely they’re brought into play to keep employees from drooping into deep despondency brought on by the flat economic landscape and the continual belt-tightening.

But do these HR practices actually do anything for the bottom line? As an article in the November Stanford Business magazine says, “After all, you’d never spend money on a machine tool or computer unless you had good reason to think you could demonstrate a reasonable return on your investment.”

The article reports on the work of Kathryn Shaw, who took a deep look at the steel industry. After months of observation, Shaw found “that plants that used the most innovative human resource management system were rewarded with a gross annual payout of $2.24 million more annually per line than those with traditional systems.” She also found that quality was enhanced and not compromised, while quantity was thus increased.

Flash that down the executive table if complaints about your team’s flextime crop up. Her conclusion isn’t that everyone should do as steel mills do (and she is currently studying the high tech industry), but they should find the “right” HR practices for their situation. In a paper from the study, The Effects of New Information Technologies and New Work Practices on Establishment Productivity: An “Insider” Econometric Analysis, she also finds that IT helps productivity and helps measure productivity and HR. “We have seen from talking to companies that IT measures things that couldn’t be measured easily before,” Shaw told Stanford Business, “and that feeds into selection of optimal HR practices.”

Oh, on the topic of productivity. This blog has been in a slow cycle because of geared-up production of the blog for CIO Executive Program’s conference CIO|05: The Year Ahead. You can still check out the doings of that event in the archive.