Accounting principles simply won’t work for human capital

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

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

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."

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

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."

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

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

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

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

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

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