INVESTORS IN PEOPLE, MANAGERIAL CAPABILITIES AND PERFORMANCE


A STUDY CONDUCTED BY THE CENTRE FOR BUSINESS PERFORMANCE CRANFIELD SCHOOL OF MANAGEMENT (Prof. Mike Bourne & Dr. Monica Franco-Santos)

CONCLUSIONS AND IMPLICATIONS

This study further examines the impact of Investors in People on firm performance by focusing on the effects that the framework has on the capabilities and performance of managers.

The evidence collected through seven case studies, a survey of 403 companies based in the UK, and an analysis of published financial performance indicators was used to test a conceptual model illustrating how Investors in People influenced managerial capabilities and performance of both managers and the firm.

Our research showed that working with Investors in People triggers a chain of events. Investors in People recognised companies have better managerial capabilities that engender higher managerial performance, which leads to better perceived non-financial and financial performance, resulting in higher profitability – as shown in their published accounts – than non-recognised companies.

Investors in People recognised companies:
 Have more capable managers – assessed in terms of their knowledge, experience and skills
 Exhibit a stronger organisational learning culture
 Deliver more effective managerial development practices
 Develop a managerial context that encourages high performance working practices
 Have managers that benefit from more autonomy and freedom to decide what to do and how to do their jobs
 Generate higher management performance
 Achieve higher non-financial and financial performance.

The study also shows that Investors in People companies are more committed to their people, which is reflected in the greater investments they make on the development of the capabilities of their managers.

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