Performance Management

The Value of HR in Creating a High-Performing Company

February 15, 2023
November 7, 2023
  —  
By 
Sarah Lindenfeld Hall
Lattice Team

Amid an economic downturn that comes with rising inflation and mounting layoffs, it’s easy for organizations to become laser-focused on the bottom line. The C-suite’s attention may naturally turn to operations and finance teams as they home in on strategies aimed at surviving these turbulent times.

But, increasingly, organizations are adding another player to those deliberations — Human Resources — as they make people management a key ingredient in the creation and maintenance of a high-performing company, even during tough times. Inside the board rooms of top companies, HR is becoming an essential partner in ensuring organizations meet performance indicators and long-term goals.

HR's Role as a Strategic Partner

Even before the COVID-19 pandemic introduced new workplace complexities, some industries had begun to view the HR function as vital to business success, said Michael Martin, global leader of Kincentric’s HR and talent advisory practice. The pandemic only bolstered that view.

“One of the silver linings coming out of the pandemic is most companies wouldn’t have gotten through the pandemic, wouldn’t have done well, without the [Chief Human Resources Officer] and their team being right there, driving through this storm with other leaders to take care of the organization, its viability, its relevance,” Martin said. “The speed with which we saw innovation on all things related to product, supply chain, and people was unprecedented. HR, in many of those examples, was the driver.” 

Now, with a recession potentially on the horizon, new challenges are emerging as executives work to create and maintain that high-performing organization, and talent management is more often part of the conversation. Here’s how HR strategy can drive business success, and how HR can demonstrate its value to business survival. 

How HR Drives High Performance

Year-over-year revenue growth, constant product innovation, and continuous expansion are all hallmarks of high-performing companies. And to achieve those results, top-notch organizations have unlocked the potential of their people, no matter the role, Martin said.

They’ve taken the time, at the C-suite and board levels, to connect their business strategy with their workforce capacity and ensure their people have the tools they need to deliver, he said. “High-performing organizations as it relates to their people are those organizations that have an articulated people strategy, and they invest in executing it.”

Four traits, in particular, drive the success of high-performing companies: alignment, accountability, engagement, and adaptability. At high-performing organizations, people are aligned with company goals and objectives. These businesses prioritize feedback and use data to hold teams, managers, and employees accountable for their performance. They ensure employees remain engaged in their work, always motivated to deliver results. And high-performing businesses are adaptable — providing high-performing teams with the tools they need to quickly pivot.

When HR is aligned with business goals, you'll see a more motivated workforce, better productivity, and more profitability.

The right HR strategy and programs can help companies develop and enhance all of those traits.

“As a C-suite leader, it's essential to understand the critical role that HR teams and programs play in driving business success,” said Shri Ganeshram, founder and CEO of Awning, a real estate technology company and brokerage. “By focusing on key areas such as alignment, accountability, engagement, and adaptability, HR can create the conditions for high-performing teams that can weather any storm.”

Here’s how HR can drive business impact and demonstrate its value in each of these four areas.

1. Alignment

High-performing organizations haven’t just set goals, they’ve aligned those goals to their workforce, clearly connecting teams, managers, and individuals to specific outcomes that will lead to business growth and success. Indeed, according to Gartner research, employee performance rises up to 22% when worker goals and company priorities are aligned.

“HR strategy is not just about filling positions, it's about creating a culture of excellence within your organization,” Ganeshram said. “When HR is aligned with business goals, you'll see a more motivated workforce, better productivity, and more profitability.”

HR’s role in developing alignment is far-reaching. People teams can help establish an organization’s mission and values or design the job architecture and compensation philosophy that will ensure they have the top talent for the job. A company that requires high-level software developers to create a new service, for example, will need to have the job titles, salary, and benefits that will attract the right people to the organization. 

HR also can go as deep as tying each job description to overall business goals and helping to determine what might make job candidates rise to the top and how their performance will be evaluated once they’re on the job, said Tim Toterhi, founder of HR consultancy Plotline Leadership.

Toterhi used the role of a proposal developer as an example. While some people develop proposals at a faster rate than others, what really separates a good proposal developer from a great one? A proposal developer who can not only work quickly but can also effectively partner with sales may bring those extra skills that are required to achieve the organization’s goals.

Once HR has defined “high performance” in each role, every aspect of talent management, which also is under their purview — including assessments, performance reviews, coaching, and promotions — can tie back to that definition, Toterhi explained. 

Simply put, he said, “I can’t be a high-performance organization if I don’t know what high performance looks like.” 

To ensure alignment, HR leaders and programs play another important role by prioritizing transparency and helping to communicate goals, expectations, and those definitions of excellence. 

“High-performing teams run on transparency,” Toterhi said.

2. Accountability

Employees can have the skills required to reach an organization’s ambitious goals, but that doesn’t necessarily mean they’ll deliver. That’s why accountability is so critical — ensuring that outcomes and outputs are constantly evaluated. HR programs and strategy play another vital role here.

"Effective HR programs are critical in building a culture of accountability,” Ganeshram said. “By setting clear expectations and providing regular feedback, HR teams can create an environment where everyone is held accountable for results."

HR can lead talent management programs that include creating a company culture that values authentic feedback through regular one-on-one meetings between managers and direct reports. They can guide managers in the crafting of performance plans, so employees know where they stand, how they can grow in their career, and what skills need boosting.

And, by deploying HR tech solutions, people teams can help managers track both qualitative and quantitative measurements to monitor the productivity of teams and individuals, the cadence of check-ins, retention rates, time to hire, pay equity, and other metrics. The answers to all of these questions can help organizations spot trends and address issues, helping organizations create and maintain high performance.

“All of these things now can be measured,” Toterhi said, “and you can make really good decisions.” 

High-performing HR has listening strategies in place so they can very quickly understand the pulse of the organization.

3. Engagement

Employee engagement has a direct connection to high performance, including better financial performance and a healthier work environment. According to a 2020 Gallup meta-analysis of 456 research studies, highly engaged employees boost business outcomes in a variety of ways — including an 81% reduction in absenteeism, 23% more profitability, and 18% to 43% less employee turnover. 

HR teams and programs play a primary role in driving employee engagement. They can develop listening campaigns with employees to uncover concerns, launch engagement surveys to track workforce motivation at specific intervals, and schedule pulse surveys to measure the effectiveness of new programs.

“High-performing HR has listening strategies in place so they can very quickly understand the pulse of the organization, engagement, sentiment, culture,” Martin said.

But, to truly engage the workforce, companies shouldn’t just listen. They also need to act — creating action plans to address issues that cropped up in conversations and surveys, whether it’s ensuring a particular manager is holding one-on-ones with team members or rolling out new benefits that workers proposed.

HR can support those actions too, building the policies and procedures to ensure workers’ needs are being met. That could include investing in an HR tech tool to encourage more frequent conversations between workers and managers or updating the compensation philosophy to include the reasoning behind those new benefits.

When companies listen to employees and take appropriate action, they’ll build something else that’s critical to engagement: trust. “The most important thing an HR team can do as it pertains to engagement is to build trust with teams at their company,” Ganeshram said.

At the C-suite level, HR leaders can be a constant reminder to an organization’s leadership that employees want honesty and accountability around issues. “It’s very easy for other leaders to often forget about the whole people part of an organization and just think about the business implications, which can be very short-sighted in terms of the long-term success of an organization,” he said. HR brings the needs of the people to the table. 

4. Adaptability

Working toward goals — whether through OKRs, KPIs, or another goal-setting strategy — is a proven way to build a high-performing culture and organization. But business needs, customer expectations, and supply chains can quickly shift, especially in a volatile economy. High-performing organizations must be nimble and ready to adjust those goals and expectations.

McKinsey & Company, the consulting firm, calls it future-proofing. Yet, many companies aren’t doing the work to ensure they are ready for what’s ahead. According to a 2020 reskilling survey by McKinsey & Company, 50% of leaders surveyed said they are facing business challenges because of unexpected skill gaps, and most believe upskilling and reskilling initiatives will solve the problems. But only 13% feel confident that they can implement those initiatives. 

Right now, “there are a lot of challenges to be solved for,” said Hemant Varshney, founder and CEO of DigiCom, a growth and acquisition marketing agency. “And if you’re not adaptable, you run the risk of burning your team out. You run the risk of losing performance or maybe not even operating as a business because you’re not adaptable with what your business needs to do to survive.” 

HR teams and programs, again, play a pivotal role in building that adaptable workforce. They can create goal-setting policies and procedures, use data from people management solutions to guide decision-making, and develop training programs and development opportunities, so workers can upskill and reskill as needed.

“HR can help build out what that looks like,” Varshney said.

Empowering HR Drives Success

Bottom line, by empowering HR with a seat at the C-suite table and the tools to act on initiatives, organizations will be ready for the challenges that lie ahead. HR leaders can ensure workers understand how their work aligns with company values and overall mission, employee performance is measured, the workforce remains engaged and motivated; and the organization is well-positioned for any upheaval.

This can be hard work, but the payoff is huge as an organization capitalizes not just on the potential of the market, but the good work and expertise of every stakeholder.

"As a leader, it's my job to pave the way for HR teams to do their job effectively,” Ganeshram said. “This means giving them the resources, support, and autonomy they need to create and implement effective HR strategy, and fostering an environment where open communication and collaboration are valued. When HR teams are empowered to do their job, they can drive success throughout the organization."

Ready to harness every resource to drive business growth during these challenging times? Download Lattice's ebook HR’s Guide to Driving Business Impact.