Accounting principles simply won’t work for human capital

HR
consultant Paul Kearns has accused the Accounting for People Task Force of
trying to measure the impact of people on performance using accounting
techniques.

Kearns
is concerned that the methods the taskforce is suggesting to measure human
capital management (HCM) will not work.

"The
problem is that they [the taskforce members] are barking up the wrong tree.
They are trying to use accounting principles to measure things that weren’t meant
to be measured using those principles."

The
taskforce’s consultation document does acknowledge that there are real
differences in opinion over the best way to measure HCM.

It
states: "Some writers place greater weight on factors such as fair
treatment, job security, scope for employee development, and design of jobs to
promote autonomy and challenge. Others stress the role of worker flexibility,
performance management and the use of incentive payments."

But
it identifies an emerging consensus between leading researchers that there is
"compelling evidence for linkage between strong people management and
performance".

However
Kearns, director at consultancy PWL, is worried the taskforce is using
techniques that are out of step with the profession.

Most
HR professionals, he said, aren’t using HCM and are not up to speed with the
language and practices.

"The
taskforce is a bit ahead of itself. HR people are doing HR, not HCM," he
said.

He
said he is concerned that the measures are too simplistic and the taskforce’s
methodology is questionable.

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