Transformation from Personnel to Human Capital

 Over the years, the terms used to describe staff and employees in businesses have changed. We have moved from "personnel" to "human resources" (HR) and now "human capital”. Other phrases, such as "talent management" have also emerged. These terms can appear to be dehumanizing. That is why some HR manager titles include the word "people" in preference to "human resources".

The important point is the mindset behind the organization’s operation. If people are valued, and all management and leadership actions demonstrate that, then the terminology is not so important. People are still the most important asset. The importance of people in organizations and discusses some issues relating to the achievement of high levels of performance for human resources.

Are managers mean?

Many employees seem to think that they are. In training sessions over the last twenty years, in both the public and private sectors alike and received some comments criticizing managers for being uncaring, inconsiderate and bombastic or the like.

Comments on participant training evaluation forms have included comments like "this training should be compulsory for all managers". Such comments show that employees believe that managers need to develop their interpersonal and leadership skills. They also indicate concerns about the way employees feel they are managed. When such concerns are discussed with participants, a better picture emerges. Often some clarification is required. Sometimes misunderstandings have occurred.

Unfortunately, this does not negate the impact of negative feelings in the first place. Perception is different to reality, but it is perception that guides feelings. If employees have a perception which is negative, then morale and performance will suffer.

So what can managers do?

The first thing is to be very conscious of how statements and actions may be perceived. Managerial actions must match the rhetoric. Employees look for the behaviour that supports the words. Many people can quote examples of managers talking about the importance of customer service whilst simultaneously slashing operating budgets. This mismatch between the rhetoric and actions constantly undermines the attempts made by organisations to bring about cultural change.

Secondly, any consultant will tell you that the most frequently mentioned problem in most organizations is communication. Communication flow throughout the organisation is essential. Communication channels need to be adjusted for the more fluid organizational structures and the new technologies.

Thirdly, managers need to pay constant attention to the people issues, particularly in environments of change. Most people do not like change being forced on them. Some are used to change. Some welcome it, particularly if they play a role in determining and implementing it. The emphasis nowadays on increased participation in the workplace is partly a reflection of the environment of constant change. We need participation to reduce the stress change causes.

Many organizations are experiencing relatively high employee turnover, but managers are saying they do not have the time to investigate the reasons. These warning signs may require investigation, particularly remembering the old adage that symptoms may mask the real problem. One of my favourite stories as a trainer concerns the maintenance manager who was constantly asked to check the air conditioning in certain sections of a large office building. Sometimes he was asked back regularly because employees were constantly complaining about being too hot or too cold. His equipment consistently found the temperature to be correct. Later he realized that the temperature complaints were symptoms of a problem, the real problem being with the workgroup itself. There were real problems with their morale and the organisation culture was not right. The problem manifested itself indirectly.

One of the key issues now is increased workload across all organizational levels. Increased workload has arisen because of restructuring, downsizing, increased responsibilities etc.

A real difficulty is determining whether a person has too much work, or alternatively, is inefficient or ineffective. People can innocently confuse "busyness" with efficiency or effectiveness. It is important to review activities and processes to assess their importance and contribution. Morale and organisation culture may also be a factor.

One important factor is workload associated with the planning and implementation of change. Often change activities have to be run in parallel with existing systems. For example, the old payroll system still needs to be run whilst the planning, development, testing and implementation of a new computer payroll system over a six month period is carried out. The need to develop a new payroll system is not a good enough reason to stop paying people for six months! This change will place a heavy responsibility and workload on the payroll officer. Additional staff support may be required or maybe it is possible to carry the additional workload for six months. However, if the new system took two years, would the additional load be reasonable?

The additional work generated by change is often the key factor in workload discussions. Workload increases caused by change activities can be justified in the short term, particularly if the change brings better processes and increased efficiency. Incremental change is particularly stress free i.e. make a change, reap the benefits and increased productivity, which then frees time for more change activity, which when implemented, then frees more time for change, etc. This approach keeps the workload at a very manageable level.

If however, the changes come frequently and constantly, with little respite from normal day to day requirements, then workload can become unmanageable. If this continues, both the employee and the organisation suffer. These matters require constant attention, as the damage may be hidden. For example, if customer service levels deteriorate, it may be some time before impacts start to manifest themselves in performance indicators.

In summary, people should be treated as an asset rather than an expense item. Every effort should be taken, whether formally or informally, to develop skills and abilities and to provide opportunities for people to maximize their contribution.