Swimming is an incredibly performance-oriented sport, with its national league tables for eight-year-olds and relentless emphasis on split-second times.
The best swimmer at my children’s swimming club got into the national squad and went to a top sporting university: excellent facilities and the best coaching. Unfortunately, it didn’t work out – her performance declined and she left the national team. Now, back in her local context, she’s happy and producing national standard times. People are human, their performance unpredictable, elusive and context-dependant.
The current emphasis on short-term performance presents the HR profession with a dilemma. On the one hand, people management policies are strategic and should be considered at board level, and that requires improved measurement of their business impact. As PWC Saratoga concludes in its analysis of human capital trends, more organisations need to be following the leaders in producing “practical policies which have a measurable impact on bottom-line results”.
On the other hand, you can have too much of a good thing. Some of what I see masquerading as human capital reporting is underpinned by a philosophy of scientific management and Taylorism, obsessed with driving more output, more profit, at less cost, from each employee, and with a smaller HR department.
Recent research among HR professionals by academics Anne Keegan and Helen Francis found a significant level of disquiet: that the profession’s historic roots in employee motivation and welfare were being sidelined by the obsession with the business, the boardroom and financial results.
Yet in our contemporary high-tech/high-touch, knowledge and service-based economy, the most measurable is not necessarily the most important for business success. A forthcoming Chartered Institute of Personnel and Development (CIPD) research publication, Managing People and Knowledge in Professional Service Firms, highlights the importance of implicit knowledge and understanding in adding value to client relationships and in managing staff.
A director in a media business told us: “It’s very client focused and pretty much all tacit knowledge, as we don’t have time for a huge analysis of data… it’s incredibly exciting and that’s why our human capital and their motivation becomes critical.”
Our recent research on public sector reform, meanwhile, suggested there may be too much emphasis on delivering measurable efficiencies and economies, with insufficient attention paid to employee engagement and empowerment, which is essential to delivering the world-class public service aims of these reforms.
Performance is at least as much about motivation as measurement, and effective management is as much an art as a science. According to psychologist Manfred Kets de Vries, creating an appropriate management balance is critical – one where real, distinctive value can be added by HR professionals, with the expertise and perspective that many line mangers lack. Hay’s Helen Murlis describes the HR professional’s role as that of a craftsperson, creating the optimum and unique mix of HR processes to suit their employer’s context: its goals, its character, its staff.
Edward Cadbury and the welfare workers who founded the CIPD in 1913 also recognised this balance: that employee wellbeing and company performance were “different sides of the same coin”, as they fought the human cost of scientific and mass production management.
We must not make the same mistakes today with human capital management.