The Newbury Index is a rating system that indicates how well an organisation is managing to capitalise on   the value of its people.

  A Newbury Index Rating or NIR serves 3 main purposes. It provides:-

  • A solid foundation for exploring significant improvements in organisational value
  • A diagnostic for specific actions that will improve your NIR
  • A means for comparing how well you gain a competitive edge through effective people management

  The Newbury Index is the result of 14 years of research and development by one of the world’s leading   authorities on ‘people measurement’ - Paul Kearns. He set out with the clear aim of creating a common   framework and universal set of indicators for revealing how well organisations manage their people. The   difference between a high NIR and a low NIR can be staggering (see current market values of Toyota -
  $127 billion, versus General Motors - $20 billion)

  The NIR sets an extremely high standard and there is no guarantee that companies performing well by   conventional   measures of profitability and/or market capitalisation (e.g. Microsoft) will automatically receive   a high NIR (Microsoft is   currently rated as CCC). The NIR really is a true measure of value in its broadest   sense. It is value in £/$/€’s for   shareholders but it is also value to society at large.

  The Newbury Index was created from a carefully selected list of 50 organisations that have received an   uninvited rating   (please note that the uninvited ratings have intentionally been scored, initially,on a   generous basis)  based on a   wide range of information that is reduced to just three key perspectives:-

  • M - Human Capital Maturity
  • S - Human Capital Strategy that is directly influencing business strategy
  • P - People measures linked to value measures

  Under each of these headings the ratings shown in the table below can be assigned to produce an overall NIR   that will look something like ‘AB+B+’

  Definition has been a perpetual problem, diversion and distraction in people management. So you may be   thinking that HCM is at best just an extension of HRM or, at worst, just another meaningless title or jargon.   Far from it. The Newbury Index definition of HCM is crystal clear and quite distinct from any conventional   approach to HRM.

  The HR profession has, for many years, suffered from a lack of clear definition about the role and remit of   the function. At one end of the scale HR practitioners simply undertake a reactive, transactional,   administrative role to ensure their organisation is compliant with employment and other legislation and they   administer the employment relationship right through from hiring to termination. At the other end of the scale   some HR professionals profess to adopting a much more strategic role; their aim being to support the   organisation in the achievement of its strategic goals. Neither of these roles, however, satisfy the criteria
  of HCM or the NIR.

  The Newbury Index subscribes to the definition of HCM used in the UK’s Accounting for People Taskforce   Report on Human Capital Management (October 2003 - see www.accountingforpeople.gov.uk): -

  “an approach to people management that treats it as a high level strategic issue and seeks systematically   to analyse, measure and evaluate how people policies and practices create value”.

  HCM is the next big step on from HR strategy. HR strategy aims to gain a competitive advantage from
  people management - HCM aims to maximise the value of people to the business. Consequently HCM does   not support the business strategy it informs, influences and helps to drive it. HCM also never accepts the   status quo or is complacent with existing performance levels. Consequently only the very best organisations   will get the best NIR’s.