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People: the sinews of business |
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Written by Dr. David S. Cohen
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Sunday, 06 July 2008 |
New buzzwords, same old problems
Here we go again. We’ve moved from manpower to personnel to human resources and human capital, from knowledge management and talent management to the latest catchphrase: workforce capability.
 I realized how little has changed in the field when I recently came across a 1930 “Modern Business” text on personnel management. “Men, material, and money are the sinews of business,” the author wrote, “but the most important of these is men.” The formal study of people in organizations is less than 100 years old. But for the last 30 years, those who are in the people side of the business have been looking for a better term and a few equations or formulas to prove their worth to other senior leaders.
A big step up in the credibility of human resources came when we began
measuring the human capital of an organization. Unfortunately, all such
measurements were lagging indicators because you can’t measure the
quality of the person until after he or she has been on the job for
some time. As a result, human capital measurements became assessments
of activities and outcomes rather than of the intangibles that make
people behave in ways that lead to those outcomes.
Now, in
workforce capability, we’ve got a new term and a new kind of assessment
that some hope will allow HR to be taken even more seriously. And yet
my 1930s book understood something that we’ve forgotten today. The
purpose of personnel management is, “mutual understanding and
cooperative effort toward a clearly visualized common goal — success in
business, and profit, progress, satisfaction, and happiness for all...”
In justifying the means, workforce capability doesn’t concern itself
with the end.
Here’s what I mean. One definition of workforce
capability is: “The pattern of basic assumptions, values, norms, and
artifacts shared by people in an organization that shapes how work is
done and relationships are managed.” What’s missing? The purpose of the
work those employees are engaged in. As the 1930 author articulated, we
need our personnel to achieve a clearly visualized common goal that is
in accordance with the strategic business plan.
Capability on
its own means being predisposed to or inclined to doing something. It
does not mean that the person will act on that inclination when
required. Execution of the task is necessary for capability to be
realized. But organizations focused on capability tend to select for
and develop knowledge and skill in employees without taking as much
care about ensuring that those employees have the attitudes and
behaviors necessary to use that capability effectively at the right
time.
In other words, workforce capability is no more than
having the skills and knowledge to do the job. According to HR’s own
definition, a set of employees who are capable simply means having
people in place who are technically proficient. It doesn’t matter what
those people do. Why does HR always miss the other side of the
equation? If I were to formulate that equation differently, it might go
something like this:
Strategic Value = Capability x Performance Using Desired Behaviours x The Corporate Values
Where
“performance” is those activities the employee engages in that are in
accordance with the business plan and the values of the organization.
(A word of caution for those who prefer a category in performance
reviews labelled, “exceeds expectations.” You cannot exceed
expectations for the work you do if the company has defined the
behaviors appropriate for getting the work accomplished. Anything less
than consistent demonstration of the behaviors would mean the employee
has a need for further development.)
So where does that leave
us? Despite the fancy term, workforce capability is nothing more than
managing and developing personnel — directing skill and knowledge. The
activities that HR and management engage in to ensure employees
demonstrate performance remain the same. We call them: performance
management, organizational development, employee relations, labor
negotiations, executive compensation, training and development,
leadership development, recruitment, selection, and retention.
If
human resources wants to be taken seriously, however, it needs to stop
worrying about fancy new terms and start focusing on what employees
must do to execute the business plan consistent with corporate culture.
Serious high-yield goals for HR are to ensure the creation of support
for the business that should include:
1. Improving customer service / satisfaction
2. Improving productivity
3. Increasing profitability
4. Improving quality
5. Improving safety
If
we can assess and measure how the work employees are doing directly
contributes to those five outcomes, human resources will be able to
actually influence the success of the organization. Only then will we
be able to say to top executives that “Men, material, and money are the
sinews of business, but the most important of these is men.”
Dr.
David S. Cohen is president of the Toronto-based consulting firm
Strategic Action Group Ltd. Contact him at
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David’s
book Inside the Box: Leading with Corporate Values to Drive Sustained Business Success is available from Wiley Books, at www.wiley.ca.
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