November 18, 2008

A growing organization guzzles resources, including human resources. To keep track of effectiveness of these resources and their contribution in organization's growth, measurement is essential.

There are two ways to look at effectiveness and contribution of human resources in the growth story of an organization.

First, extent of growth contributed by new manpower i.e. manpower growth vs. business growth. This analysis can give some idea about what extent of growth is being contributed by new manpower vis-a-vis existing manpower.

Second, extent of growth contributed by manpower productivity i.e. manpower productivity growth vs. business growth. This analysis can give some idea about whether the growth is being strongly influenced by increased employee productivity.

When both these analysis are seen together, it can act as a fair indication of what is influencing an organization's growth - increase in quantity of manpower or increase in average productivity of manpower.

An organization's goal should be to maximise the influence of both increase in manpower and increase in manpower productivity on business growth. That is a healthy sign which indicates that business growth is driven by continuous improvement in overall manpower productivity even when there is an increase in manpower.