Introduction

To be financially healthy, an organization must watch the bottom line. If you are having problems managing people, you are hurting your bottom line. One of the best ways to evaluate the effectiveness of your people management system is to get a more precise understanding of its bottom line impact.

People Problems

Make a list of the kinds of people problems that you currently have or have had in the past:

Use the form below to get an idea of the unnecessary people costs that may be occurring in your organization or department.

In completing the seven questions, it may make more sense for you to scan a two to three year period rather than a one year period.

Situation

1. Cost of replacing key people who left in the last few years. This is usually one half a year's salary for direct and indirect costs.

      Estimated Dollar Cost:___________

2. Key people who left and took their knowledge to a competitor.

      Estimated Dollar Cost:___________

3. Poor morale and poor teamwork and cooperation among key people in your organization.

      Estimated Dollar Cost:___________

4. Improvements and changes you have been unable to implement due to weak people.

      Estimated Dollar Cost:___________

5. Legal suits due to problems with people.

      Estimated Dollar Cost:___________

6. All other costs and lost opportunities due to not having the right people with the right skills and attitudes in the right job at the right time.

      Estimated Dollar Cost:___________

Total Unnecessary Costs: ____________________

The Challenge:

Improve your People Management System in order to eliminate these unnecessary costs, and use the recovered funds to improve the compensation you are able to give to your best staff.