How Does Human Capital Influence Results?

by Jay Deragon on 05/23/2013

HR resultsHistorically Human Capital has been viewed by organizations as a pool of labor from which to gain productivity. This historical view brought about all kinds of human productivity measures much like the way industrial organizations measured the productivity of machines. Furthering this view we saw incentive schemes such as pay for performance, the annual performance review and a host of other purely subjective management measures aimed at increasing and influencing productivity.

History and scientific evidence has taught us that we were wrong. The value of Human Capital cannot be articulated purely as a measure of productivity yet productivity cannot be gained without having informed and  knowledgeable people. So which comes first? How well an organization hires the right people, supports them with training and new knowledge or the traditional measures of productivity and performance reviews? We know the answer yet we continue to think about Human Capital in the wrong way.

There is a direct correlation between Human Capital and organizational results!

People love to create value, at least most of us do. But “corporations” define value differently than people do. Those that run corporations are people. But sometimes they forget the value of human capital is in the ability to create value. When human capital is put into a container, told what to do, not acknowledged for their contribution, has no voice, are considered an expense rather than “capital”, laid to, depreciated, pigeon holed and sacrificed for short term results it is no wonder we distrust the corporation and those that hide behind it.

No result can be achieved without a human creating the idea for a product or service that turned the intangible into tangible results.  The internet has accelerated learning by enabling the human network to share knowledge at faster rates than ever before. What information was only available to the richest people in the world is now available to everyone, knowledge.

While technology has significantly advanced it is the ingenuity of the human spirit and the quest of the human network to create more value from what has been given that from what has been taken.

Human Capital represents the abundance of what tomorrow promises and is the essence of revival for any organization wishing to create an abundant future.

{ 1 comment }

Copi Valdiviez May 27, 2013 at 11:46 pm

Human capital has many dimensions, and is acquired through a variety of processes in different settings in a number of different settings, cumulatively over an individual’s life time. Human capital has many dimensions, which can influence productivity and hence growth in a variety of ways, both directly and indirectly.

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