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People

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Of the four aspects of the P A I D model, People are the most difficult. Irrational, unpredictable and fussy, people take care and hard work to get maximum efficiency and effectiveness for the business.

There are four elements of cutting costs through People that we describe:

Recruitment

Get the right people. Not only are they more effective, but it avoids the inefficiency of having to replace them later.

Culture

Culture ina work context is "the way we do things round here". Attitude and approach contribute immensely to the productivity of your people. only the best leaders and managers foster a good culture in their organisation (otherwise Dilbert wouldn't exist). But the payoff for those who achieve it is immense.

Motivation

If you want someone to do something they don't want to, pay them to do it. There are other motivators but none are so direct and effective. The critical success factors are to
1) pay for behaviours that return more than you are paying and
2) be careful of the way paid KPIs can unexpectedly distort behaviour: make sure you are paying for what you want (they won't do the wrong thing) and all of what you want (they won't neglect some right things).

Evaluation

The second best way to motivate people is to measure what they do, and let them see they are being measured. As above, make sure you measure the right things and all the things that matter.

In some cases it is very effective to publicise the results. In others it is between the manager and the employee. Measuring but not sharing the results is nearly always counter-productive.

Evaluation without acting on the results is pointless.

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