Human Resources 101

Lessons from some of the world’s best companies

by John H. Fleming, Ph.D., and Jim Asplund Excerpted from Human SIGMA: Managing the Employee-Customer Encounter (Gallup Press, November 2007)

Rule 1: You can’t measure and manage the employee and customer experiences as separate entities. Because you must manage these human systems in tandem, you may need to reorganize.

Rule 2: Emotion frames the employee-customer encounter. It’s important not to think like an economist or an engineer when you’re assessing employee-customer interactions. Emotions, it turns out, inform both sides’ judgments and behavior even more powerfully than rational or dispassionate thinking.

Rule 3: You must measure and manage the employee-customer encounter at a local level. Though companies can manage many kinds of organizational activities effectively from the top down, the employee-customer encounter is an intensely local phenomenon that can vary considerably from location to location within the same company. Because of the variability in local performance, you must measure and manage it locally.

Rule 4: We can quantify and summarize the effectiveness of the employee-customer encounter in a single performance measure — the HumanSigma metric — that is powerfully related to financial performance.

Rule 5: Improvement in local HumanSigma performance requires deliberate and active intervention through attention to a combination of transactional and transformational intervention activities. Measurement by itself is never enough to improve performance. Creating organizational change is hard work and requires active and disciplined intervention.

Five New Rules for Management.