Virtual

Contact Manager

Phone:

0800 4 virtual
+644 570 0727
+64 21 620 456

16 Kauri Street, Woburn, Hutt City, New Zealand

email:

Manager@virtual.co.nz




The business case for people development

New Zealand research, called Management Matters in New Zealand, commissioned by Ministry of Economic Development in 2010 shows that there is a strong relationship between the effectiveness of managers and sales performance.

The report that refers specifically to the manufacturing sector but is likely to have more general significance says "manufacturers may be able to cost‐effectively enhance productivity per employee by investing in management practices as an alternative to hiring more employees or directly investing in fixed capital."

It says improving managers is even more important than increasing capital or increasing the labour force. Indeed if you were to increase the effectiveness of managers from an average score for Kiwi managers of 2.5 (level at the 25th quartile) to 3.2 (level at the 75th quartile) this would increase sales as much as an increase of 77% in the capital invested or an increase of 41% in the total labour force.

Other research shows where you get the best bang for your buck. The returns increase dramatically as the complexity of the work increases: from worker to manager to senior executive.

 
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