Harnessing The Human Potential

HARNESSING THE HUMAN POTENTIAL IN ORGANIZATIONS

Advanced Seminar in Human Resource

The challenge to tap into the human capital of our employees has always been a challenging one. There are still companies that operate on the idea that people only work because they have to and need to be monitored every moment to make them do what they are supposed to do. Those companies that have attempted to find the potential in their people have reaped great rewards and the employees have found satisfying jobs. The question remains, how do we tap this amazing resource?

3M had humble beginnings and nearly went out of business with its first venture. Five men in Minnesota founded it in 1902. They started" Minnesota Mining and Manufacturing Company (3M) to mine what they thought were corundum, a mineral ideal for making sandpaper and grinding wheels. The mineral, however, turned out to be a low-grade anorthosite. Sales of the poor-quality mineral were weak, and the company nearly failed." The company did not fail but with additional investment moved and started making sandpaper. In 1907 a young man of 20 was hired as a book keeper, he would work his day to be president of 3M and it was William L. McKnight that would one day lay the foundation of employee motivation at 3M.

William encouraged 3M management to "delegate responsibility and encourage men and women to exercise their initiative." It was this principle that eventually led to the dynamic inventions that have made 3M a very successful company. William McKnight was a man before his time. Programs to encourage innovation at 3M were based on Williams's ideas. 3M employees can spend 15% of their time developing an idea of their own. No permission need be sought, no committee need approve the idea, and no one would tell you not to work on a project. It was this unique approach that brought about the much beloved Post It® . Its journey into the world was not an easy one and would not have come about if it were not for the unique circumstances within the 3M companies.

In 1968 Dr. Spence Silver created a very unique adhesive. "It was an adhesive that formed itself into tiny spheres with a diameter of a paper fiber. The spheres would not dissolve, could not be melted and were very sticky individually. But because they made only intermittent contact, they did not stick very strongly when coated onto tape backings. " The glue had been developed but no one quite knew what to do with it. Within 3M it was possible to spend your time promoting your idea, your product and that exactly is what Silva did. He conducted seminars for years on his new product, trying to find a way to develop his adhesive into a new product at 3M. Art Fry attended one of these seminars and was intrigued by the properties of the adhesive but it would not be until later that he developed a plan for the adhesive. It was ultimately Art's frustration of losing his place in his hymnal at church that sparked the Post It® idea. That adhesive would make his little scraps of paper stick to his hymnal but would not damage the book and could be removed later. The idea had been born! However it was still some time before the product itself came to market. There was intense pressure to "Kill the Program" at 3M, engineering and manufacturing told Fry that producing the product had a great deal of difficulties and marketing too had it's complaints. Who would pay money for scraps of paper! Fry pushed on, conducting his own seminars, winning over key people and finding ways to make the production of his product work. One such person was Geoff Nicholson, a new products development manager. It was Nicholson who talked Vice President Joe Ramey into "cold calling" on the streets of Richmond VA, to see if they could sell the product. They did. The rest, as they say is history!

The amazing part of the story to me is that Art Fry, or Dr. Silver was able to convince anyone that this was a worthy product to invest time and money. Had this idea been developed in another company that did not have ideas about how to motivate people it would not have been developed by 3M.

The measure of human capital within an organization can sometimes be elusive. The question is how do your workers optimize themselves for the good of the company? And how do they fulfill their personal goals? This is a measure of an individual's contribution to profitability. As an organization are you furthering the goals and have you put systems into place to allow an individual to maximize their profitability for your organization? The culture of your organization may help you to decide what types of systems to put into place to further maximize profits through human capital.

Incentive plans have long been used to further motivate employees to produce more in an organization. It is a pay-for-performance philosophy. This type of program creates a baseline for performance; this is the minimum an employee must reach. In order for a plan to succeed there must be a clear connection between performance and incentive payments that they receive. There are numerous plans to choose from for your organization. The choice will depend on your organizations goals and its product. A common program is piecework incentive. This is most often used in manufacturing setting. There is also a system call standard hour plan which sets incentive rates on the basis of predetermined standard time for completing a job and if the employee finishes in less than that time an incentive is given, this too is used quite a bit in manufacturing. A bonus system can be implemented in all sorts of organizations. Merit pay links pay increases to performance. This system if not carefully designed can be difficult to administer. It is often easy for employees to lose sight of what they need to do in order to receive the increase. If there is no guidance in how to define and measure performance: there may be vagueness regarding reward criteria. Coupled with a mistrust of the organization or just your direct supervisor this makes for a bad situation. Sales incentives usually tie the amount of sales to a person's salary. Most often there is a base pay and then commission based on a percentage of the sales. All of these types of systems reward performance with money. In each system there are numerous reasons why an employee may not reach the required goals for reasons beyond his control. 3M do reward its employees monetarily for their efforts within the organization but they have gone