Successful Company Evaluation requires a Strategy

The Eight-Point Circle

A company consists not only of buildings and machines, but good employees are the greatest capital of a company. A balance sheet does not show the potential that lies in the employees. The creative ability, the ability to work in a team and the ability to work on tasks in a targeted and solution-oriented manner in a short time cannot be shown directly in a balance sheet. Economic economists in the 1950s and 1960s introduced the term “human capital”. A reference level should be developed on how to measure people’s productivity. Other economists, such as Theodore Schultz, extended the concept with a value that takes human potential into account.

The idea was and is that the potential of employees like any other type of capital can be used more efficiently and thus leads to an improvement in production quality and quantity.

In a broader use of the term, the collective wealth of knowledge, skills, training, abilities, assessment and experience gathered for a population is summarised.

Our aim is to support you in making the right decisions. First Human Capital works according to an 8-point strategy that takes into account scientific findings in psychology and sociology and identifies both the requirements of a company and the abilities of individual employees. Our 8-point strategy ensures that you don’t make the wrong decision out of your “gut feeling”.



Many companies now see how important it is to take care of their employees’ psychological well-being. However, it is not enough just to offer courses on stress management for the workforce. Prevention becomes more effective if you start at different levels: In addition to measures for individual employees, managers should also be made aware of the stress exposure of their employees. After all, superiors are one of the best stress buffers for the team! Groups of employees, e.g. in a department, can also learn to support each other and to cause each other as little stress as possible. And finally, the entire company should also be checked and optimised to see whether workflows and processes can be designed to be less stressful.

You can benefit from psychological knowledge and know-how at all four levels.

“The term management audit refers to a systematic assessment of the competencies and performance potential of managers with regard to the strategic success of a company (measured by the company value or the fulfilment of stakeholders’ expectations). (Source: Wikipedia)

But what is behind the audit?

Management Audit is usually based on structured interviews. Intelligence or personality tests, role plays and practical simulations are the exception.

The aim is a systematic assessment of the competencies and performance potential of junior staff and managers. But it does not always have to be a promotion. Depending on the business situation of the company, management audits are:

  • The selection of personnel (who may stay, who must leave?) or
  • The potential analysis (Is the manager up to the job now and in the future?).

In order to prove this, the candidates have to perform a simulation of:

  • Business processes and decisions.
  • Identify potential for improvement.
  • Coordinate the smooth running of functions and departments.

However, the main difference in the management audit is that the manager no longer has to prove his or her professional competence. They’ve been around for a long time. What is more important now and in the audit are real management qualities, such as:

  • Analytical capability
  • Strong leadership
  • Profit orientation

By the way, acting is pointless, nobody can keep it up that long. And the examiners are usually experienced and trained for many years, so that they recognize this immediately – which in turn would mean the end of the candidate.

Even with abstract gossip or read wisdom, no auditors are impressed. Blenders are  exposed by them with clever catch questions. What helps is honesty and good preparation.

As a rule, the top performers in a team receive far too little attention during the tour. After all, they are usually self-runners who also manage well without close management contact. Instead, the manager’s attention is disproportionately focused on the underperformance in the team. As understandable as this behavior is, as dangerous it is. Because the risk that I, as a manager, will not notice in time if a top performer shows dissatisfaction is high. The top performers in particular are often very demanding when it comes to their managers. Suddenly my top performer was enticed away because other companies became aware of him. But neglecting the best employees in particular also leads to a missed opportunity. Various studies show time and again that an increase in performance at the top of the team also motivates the rest of the team to achieve more. Therefore, targeted support of top performers can also have a lasting positive effect on the performance of the entire team. At the same time, she often promotes team spirit, as the focus on the underachievers is rarely experienced as positive.

Promoting high performers: target

The training or coaching helps the manager to identify high performers and potential top performers in the team and to bind them to the company with suitable measures on the one hand and to increase the overall performance of the team on the other.

Retention Management

The retention of strategically important employees is becoming increasingly important for HR managers. The more knowledge-based a service or product manufacture is, the more decisive the human factor is in the operational value chain, the more important people become as know-how carriers, who create values at all levels of the company and influence the survival of the companies in good times and in times of crisis.

Measures and fields of action exist and can be found in corporate culture, management policy with socially competent managers, in specific achievements of human resource management and in personnel policy and strategy (personnel development, remuneration policy, promotion and junior staff programmes and more). There are several instruments for employee retention: above-average employment conditions (e.g. salary, holidays, fringe benefits), awards or rewards for long-standing employees, job security, promotion and junior staff programmes, the possibility of longer breaks (sabbaticals), and – in line with an ever-increasing need – work-life balance offers. But also:

  •     Development opportunities and perspectives
  •     Aattractive and challenging tasks
  •     Competency-promoting further training opportunities
  •     Attractive, flexible working time models
  •     Meaningful activities, goals and perspectives
  •     Scope for responsibility and freedom
  •     Decision-making and co-determination opportunities

All are important and often successful measures. A good working atmosphere, modern management tools, a corporate culture that respects and promotes employees and an attractive performance-oriented pay policy, career advice and career opportunities are also factors relevant to retention. There are more and more indications and studies that immaterial and emotional factors are more important and sustainable than material services such as high wages or bonuses.

What motivates and binds employees in the company? For decades, the minds of entrepreneurs have become entrenched: Money! Only little by little it gets around that this is only very partially true. Employee retention is much more complex.

Numerous tools are available to increase employee loyalty. These mainly concern the following areas:

  • Remuneration and working conditions
  • Funding and development opportunities
  • Leadership and corporate culture
  • Working environment and working atmosphere
  • Reconciling work and private life
  • Health and safety at work
  • General attractiveness of the company as an employer

Recruitment is one of the most important departments within a company. Your task is not only to find suitable personnel, but also to detect and bridge personnel bottlenecks in good time, to transfer employees and, of course, to offer comprehensive training and further education measures. These decisions are usually based on a determination of personnel requirements, on the basis of which it is determined, for example, whether bottlenecks can be covered by temporary workers or whether the order volume also requires the permanent employment of new employees.

A conflict can arise when interests, expectations or actions clash that are not compatible with each other. Or the other person’s opinion is not accepted, but tries to impose his own will on him. Teams that know how to deal constructively with conflicts promote new ideas and achieve results that cannot be achieved on their own. If the conflict is not resolved, an escalation arises, which ends in disputes. Especially small things and working conditions in an open-plan office can be so annoying that they lead to stress and damage to health. These constellations often cannot be avoided, but it is possible to learn how to deal with them. The consistent application of certain rules helps to deal constructively with such problems. If conflicts cannot be resolved, the involvement of a mediator may help to resolve intolerable situations such as bullying.

Especially in companies, successful conflict resolution through conflict management is crucial for a good working atmosphere, the motivation of employees and the use of existing creativity.

Change Management: Supporting change

70 percent of all change projects fail, most already in the initial phase. This is the research result of John P. Kotter, an expert in the field of change management. Two main factors are responsible for the low success rate:

  • Resistance to change among employees, and
  • Falling back into old patterns.

Technology is not the biggest obstacle to change, but people. Based on this knowledge, Kotter developed the 8-step model in 1996. The theory shows eight phases of change management and gives managers tips on how to successfully drive change forward. The model focuses on communication – from person to person.

Change management phases according to John P. Kotter

The graduated model by John P. Kotter is a further development of the popular 3-phase model by Kurt Lewin. According to the theory, changes in companies can only be successful if all eight levels of change are passed through and intensively accompanied by managers.

Demonstrate Urgency

Awaken an awareness of the urgency of change among both managers and employees. For example, develop scenarios that could occur if no change occurs. Discuss with your managers and employees and make strong arguments.

Building a Leadership Coalition

Build a good leadership team by attracting thought leaders to your idea and bringing them together under the flag of change. Make sure you have a good mix of people from different departments and with different skills.

Develop Vision and Strategy

Develop a strong vision and concrete strategies to achieve the goal. Communicate them in a well-prepared and strong speech. An overriding goal for the company helps to implement the change.


Communicating the Vision

A constant drop in the ocean: Don’t be afraid to keep communicating your vision to managers and employees. This creates trust and strengthens motivation.


Removing Obstacles out of the Way

Are there structures in your company that slow down change? Take a close look at the status quo and get rid of unfavorable organizational structures, workflows and routines.


Making Short-Term Visible Success

Don’t set costly and time-consuming goals to start with, but also define quickly achievable    milestones. Employees who achieve these goals should be rewarded.


Driving Change Further

After each goal achieved, analyze what went well and what could have gone better. Always develop new ideas and goals and bring new employees into your management team.


Embedding changes in the corporate culture

Firmly anchor the goals you have achieved in your corporate culture. According to Kotter, a successful change management process is only possible once this has been achieved.

Potentials and Limits of Kotter’s Model of Change Management Phases

Since Kotter’s 8-phase model provides concrete instructions on the subject of successful change management, it can serve you well in practice. Critics complain that Kotter’s model does not explain how to act in the event of regression and that initiatives by employees or so-called “bottom-up” perspectives are ignored. However, like hardly any other change management model, it shows the importance of good communication for sustainable change.