MCBASSI & COMPANY

Good Companies Keep Winning

avatar

Our 2014 edition of the Good Company Index Report contains a hopeful message: the good guys keep winning.

The report is a follow-up study on the behavior of Fortune 500 companies, first published in our book Good Company: Business Success in the Worthiness Era. The report contains an updated Good Company Index (GCI), which we use to assign grades to nearly 300 of America’s largest companies based on their record as employers, sellers, and stewards of communities and the environment. The top-ranked companies in the Fortune 100 this year are Apple, Ford Motor Company, and United Parcel Service.

We also analyze company stock market performance based on the previous GCI grades we assigned in 2012. The results? On average, those companies with higher 2012 GCI grades significantly outperformed their industry peers in the two years that followed.  The median outperformance was 5.1 percentage points, with almost 60 percent of the higher-ranked companies outperforming their lower-ranked competitors.

Further, a live portfolio comprised of the top-scoring companies on the 2012 GCI, invested since October 2012, outperformed the benchmark S&P 500 average (total return, including dividends) by 17 percentage points in its first two years, ending October 1, 2014 (see figure below).  The Good Company Index is used by the Enterprise Engagement Alliance to manage both their Engaged Company Stock Index and their People Centric Annual Awards.

Be sure to check out the full 2014 Good Company Index Report for complete details on the latest ratings!
(This post was sent this month via email to our monthly newsletter subscribers.  Click here if you’d like to subscribe.)

Strategic People Measurement

avatar

As the importance of human capital management continues to grow as a differentiator between high and low performing firms, there is both the opportunity and necessity for the HR function to become more strategic.

The process of becoming more strategic requires asking better questions, deploying clever analytics, and just as important, being able to articulate how HR creates value.  The graphic below is the framework we use to help guide HR functions as they seek to become more strategic.

While the specifics, of course, vary from firm to firm, the framework is sufficiently general to serve as a powerful foundation and starting point, no matter what your firm’s size or industry.

So what do you think?  Is this a framework that could work for your firm?  Let us know – we’d love to hear from you!

An Analytics-Enhanced Employee Survey

avatar

Welcome back (at least to those of you in the northern hemisphere) to the new, even-more-frenzied, post-summer work reality!

For those of you beginning to be immersed in 2015 planning and budgeting, we’d like to offer some thoughts on how to get more bang for your buck from your next employee engagement survey.  In one sentence: you should use it as cornerstone for a strategic, analytics-enhanced HR measurement strategy.

When employee engagement data is properly designed and cleverly analyzed, it is an enormously powerful foundation for creating actionable, fact-based insights to drive better business results.  It is the single most important source of data enabling you to move beyond “descriptive” HR metrics to “predictive” human capital analytics.  By identifying the human drivers (and impediments) of business results, these analytics insights provide a strong evidence base both for guiding HR investments and documenting their impact.

Through linkage analysis – the mapping of employee engagement to important business outcomes­ – it is possible to develop insights into the HR strategies that will have the greatest positive impact on your organization’s greatest challenges, such as the following:

  • Revenues
  • Cost containment
  • Profitability
  • Customer service issues
  • Productivity
  • Safety
  • Managerial effectiveness
  • Training effectiveness
  • Employee engagement
  • Absenteeism
  • Regretted turnover

The bottom line – an analytics-enhanced employee survey is a far better investment than the traditional, HR check-the-box employee engagement survey!

(This post was sent this month via email to our monthly newsletter subscribers.  Click here if you’d like to subscribe.)

Where Does Human Capital Fit in the Sustainability Agenda?

avatar

My new article in the May 2014 issue of the Cornerstone Journal of Sustainable Finance and Banking explores new research (with David Creelman and Andrew Lambert) on the progress some companies are making in reporting human capital metrics in their integrated reports.

While encouraging that a growing number of firms are beginning to disclose more information on elements of human capital, it’s clear that most of the disclosures still fall short of providing a comprehensive look at what’s creating or destroying value on the people side of the business.  Indeed, many key human capital measures known to predict future performance (employee engagement, training investments, internal promotion rates) are being reported by less than half of even those companies integrating financial and human capital reporting.

I propose a framework that CEOs and Boards of Directors can use for two purposes:

  • To measure and manage six key elements of human capital risk
  • To serve as a foundation for communicating more effectively with investors

Curious?  Check out the article for full details.

(This post was sent this month via email to our monthly newsletter subscribers.  Click here if you’d like to subscribe.)

A Smarter Annual Report webinar

avatar

Join us on May 29, 2014, at 12:00 noon EDT for a webinar on “A Smarter Annual Report — how companies are integrating financial and human capital reporting.”

To register for the webinar, simply click here.

We hope to see you there!