Enterprise Software

Why Human Capital Management is insulting


Human Capital Management. Do those words irritate you? Perhaps I'm in a prickly mood but I just received a flyer in which a company offers to train me to do a better job in Human Capital Management because as a CIO I must obviously suck at it - or at least the flyer alludes to that. Additionally, this must be some special kind of ability because it costs a small fortune to learn about it.

As the flyer made its way into my recycle bin (I'm green - hehe) I thought about those three words: Human Capital Management. Coupled together they offend me. I am not a stock, money, or property. Nor am I owned, bought, sold or traded. I am not part of an inventory, I do not have a upc number, nor a known expiration date (at least I hope not). The idea of relating to employees as if they were cows or chickens bothers me. Adding Human to the term Capital Management doesn't make it less offensive to me either.

I know some of you may be saying "Relax Ramon, it's just a layer of abstraction for dealing with the concept of employees as a whole." To you I say "phooey!" - I told you I was feeling prickly. I think that whenever we take that step back, to dissociate the individual person from the human being that comes to work each day, making them vanilla for purposes of decision making and management, we are stepping into a dangerous area.

This is particularly true when it comes to motivation and getting the best from our employees. If you Google the phrase, you will find many hits in which the general topic is maximizing our investment in human capital by blah blah blah. I say blah blah because when you begin to talk about investment in human capital in the same sentence that you're talking about motivating your workforce, you are, in my opinion, about to read a bunch of BS.

When my staff walks in the door in the mornings (notice I did not say "when my human capital assets arrive at the workplace") each and every one of them brings with them a unique set of knowledge, talent, experiences, problems, and expectations. Nothing about them is "vanilla" when it comes to motivation. To say otherwise is actually a fallacy that management often adheres to--that employees are all the same and we can manage them and motivate them as a whole to "maximize thier potential." Oh I wish it were that easy. If it were, management and leadership would not be so difficult and good managers and leaders so hard to find.

There are those who would argue against me and say that, in fact, employees are all motivated by two things: money and security. They assume that there is a relationship between productivity and money and security - with the idea that if you increase either money, security or both, productivity will increase. Others might argue that that assumption is off and that if money is increased and security decreased, productivity will increase. I say to both - wrong!

I won't argue against the fact that both money and security have a powerful effect on productivity, but if the relationships between the three were as given above, picking the winner of the Superbowl or the World Series each year would be a piece of cake wouldn't it? Just lay your money on the team that pays its players the most and you will find the most motivated players right?

We all know that that's not the case and the so called "chemistry" of a team can play a huge difference. Where do you think that chemistry comes from? It comes largely from the team's leadership, both from management and from the individual leaders that make up the players.

If you think that treating your staff as vanilla will lead you to continuous and predictable success, you are mistaken. Yes, there are things that you can, and should do, with consistency as a manager for all employees (such as being honest and treating them with respect). But to get the most out of your staff, to reach the Superbowl for your organization, you need to know each person's idiosyncrasies as well and be able to manage on a personal level.

Frankly, I want to work for people and an organization that halfway cares about me as a person. I will and have taken less money to work in that sort of environment.

Maybe I'm just weird or perhaps unrealistic regarding my work expectations, but I want to be managed as a person and that's the way I want to be managed. I'd rather have my boss spend a few minutes with me taking my cares and concerns seriously rather than spending time and money learning how he can better manage his human capital portfolio.

Do you have a boss or an organization that thinks you're just a member of a herd? Is that perhaps the reason you work for yourself or consult? I'd like to hear your opinion, so chime in!

64 comments
jeff.cowell
jeff.cowell

of what used to be Personnel, then Human Resources to create the illusion of progress in the field.

wee_puth
wee_puth

Oh you hit straight right to my heart. Most managers are treating their people like they are assets not person. And those managers will not win their hearts.

info
info

HCM is an emerging discipline, and there are plenty of HR people with different views, so I can't speak for them all. But for me, and the clients I am working with, HCM is about managing people in a way that accumulates human capital to drive competitive success (not 'managng human capital'). I know of no organisations using the concept that are calling their people 'human capital'. This isn't what it's about. HCM depends very stronly on personalising people management services to individual employees. It's a very steep step up from treating them as human resources. If you want to know more, visit my blog, http://strategic-hcm.blogspot.com . Jon Ingham.

BlueKnight
BlueKnight

I agree with Ramon that the phrase Human Capital Management is abrasive. Capital is spent, so what the creators of the phrase are really saying is that employees are expendable... "to be used up" by the organization. While it may be true that employees are "expendable", using the "HCM" phrase serves to make employees feel even less important and further devalues them where the organization is concerned. I haven't seen any such flyer myself, but from what little we can make of "HCM" training from this blog, I'd agree that it's probably a bunch of BS. If there is any substance to it, it would be far better to call it Human Resource Asset Management, which reflects that employees are assets to an organization. Naming some seminar "Human Capital Management" not only makes it sound bad, but it also connotes a negative attitude toward employees, something organizations need to eliminate. We employees may be "expendable," but we are not chattle. Any organization that values employees and their contribution toward the success of the organization, should avoid using any similar terminology. I've not been at the very top of the "food chain" but I recognize that it was the work of those who reported to me that got me any kudos, and I made sure my troops knew that I appreciated the work they did. To me they were assets, NOT capital.

phil
phil

Ms. Padilla's comments are right on the money. "Human Capital Management" should be an offensive term to any person no matter their position within a company. I am a co-owner of a benefit consulting company and I find this term degrading. Words have meaning and such a term as "Human Capital Management" reduces men and women to mere "tools" to in the corporate apparatus. Ms. Padilla gets at the heart of it when she alludes to "people as inventory." That pretty much says it all. A very dehumanizing and scary term. Is this where we are at now in American business? Refering to workers as inventory--no different then managing a stock portfolio? George Orwell where are you? Phillip Ruland Vice President Ruland & Mattingley Laguna Hills, Calif.

matsonl
matsonl

The health care industry does this all the time! The crisis in patient care has less to do with number of sick people and more to do with an industry that treats its employees with less regard than a Bic Pen. People get discouraged and leave the industry because wages, benefits and humanity just aren't there. This put patients at risk. Educational institutions can't crank out new employees fast enough.

Peon
Peon

.. head count or body count, especially when the two get separated from each other ;-((( I don't mind being just a number on a spreadsheet at some point in time, since I have to do the same in my job. It turns sour when individuals are dealt with that way, too. And if HCR takes into account people's abilities to get the best out of an employee - not a slave - than that's fine with me as well.

dallas_dc
dallas_dc

Excellent Post! I couldn???t agree more. Referring to your team as Human Capital allows certain people to think of them in terms of their cost, and not their value as an individual, or as a team member. I cringe at the thought of outsourcing to India, or Russia, work that is currently being performed effectively by people in this country. Can you communicate with the outsourced ???Assets??? effectively and in a timely manner? Are these ???Assets??? paying taxes in our country? Do you trust them to know key information about your infrastructure, or your development project? How do you work on retention of these ???Assets???? The answers are No; No; No; and You can???t. ???Nuff said!

dtrnelson
dtrnelson

Because it's Animal-Farm 'newspeak' for what used to be called "Labor." That's much too clear for the new purposes. Capitalism used to teach: there is capital and there is labor. A man with no capital still had his labor to offer. Now, it's all to be capital, to be owned by the capitalists. You "negotiate" with labor; you "allocate" capital. Thank you, Ramon

TooOldToRemember
TooOldToRemember

(with tongue planted firmly in cheek...) I would love to be treated as a capital asset! During RIF's have you ever seen them dump a piece of equipment in which the company invested $$$$? How about preventive maintenance, refurbishment up to new standards, rebuilds, etc? Most companies I have worked for have spent much more effort in maintaining their equipment than their employees. To insure the most productivity and efficiency out of a piece of equipment it is painstakingly maintained with the goal of achieving maximum output. Any equipment operator (manager) who abuses the equipment has been swiftly and severely corrected about how they have mistreated the equipment. How many times have you seen a manager of "Human Capital" reprimanded for those types of actions?

apoalillo
apoalillo

I agree this is insulting and it is certainly one reason I consult now. I truly got tired and stressed being considered a commodity. It is still a factor as a consultant but at least it is a more honest approach-we are an expendable "resource"- we all know that going in. Bottom line-I learned as a manager for 20 years that a good manager is born not made-you have the necessary people skills or you don't........... business does not consider this when hiring managers anymore and that is a mistake. People do not give their best to a manager or organization that does not treat them and their experieince with respect and that hurts everyone's bottom line.

IT Security Guy
IT Security Guy

I hated the term when I first read about it. It is degrading and insulting and it does treat employees as less than people. It is removing another layer between employees and management/owners. We are and have been less than people for a couple decades and now with Human Capital we are becoming less than numbers. I wouldn't be surprised if some companie s stopped having name tags on each person's cubical or office and just had a main panel that said who was there and visitors or customers just had to mill about to find the person they need to meet.

roadtrip
roadtrip

I think we need to focus our attention on the HR department. Isn't that the touchy, feely, must be sensitive to everyones feelings portion of the organization. When it comes to being hypocritical, that portion of organization tops them all. They are the ones pushing this garbage.

carl
carl

Ramon, Well said. I agree. These new fangled terms like Human Capital just further desensitize managers and colleagues from the unique individuals we all are. In this age of RIF's (Reduction In Force - another fancy name for layoffs and downsizing), people have been reduced to "a numbers game", "post-its" and "performance bands". Just like any other asset. Sad news is that this all emanates from none other than Human Resources (which used to be called Personnel)... and so the detachment from people and individuals continues. Just like playing a video game..

mordra
mordra

I agree the term "Human Capital Management" is a bad one, but it is a weak misnomer for the underlying concepts, which are the opposite of what you assume! The whole point is to use processes and (yes) software to more effectively manage the unique differences between people, and to match them to positions and other people where a team which is greater than the sum of its parts can emerge. This is entirely the opposite of what you assume. The goal is NOT "making them vanilla for purposes of decision making and management", but to recognize and embrace the unique knowledge and skillset of each individual more effectively and efficiently.

scott_krol
scott_krol

I agree - I work as a Temp for a Large company. They do not refer to me as Human Capital but that is exactly how I am treated.

Tell It Like I See It
Tell It Like I See It

I'm in a mixed kind of company. Certain managers actually do prefer to treat people as people. Other managers treat people as rungs on the corporate ladder and nothing else. Thankfully, I'm currently in a department whose manager is in the former category (care about people). I came to this department from a department where the manager was in the latter category (rungs). So I've seen both sides. Personally, I feel that I'm at least as productive in my current job (if not more so). I also feel that in my current job I'm much more effective than I was under (pardon the pun) the old manager. By more effective I mean being of much better use to the company as a whole. Why'd I make the switch? For a lot of reasons that are all interwoven. However, it is fair to say that I got to the point where I was simply fed up with the old boss and his BS attitudes on things. In particular, I was fed up with being overly "productive" yet achieving absolutely nothing, thus being totally and completely ineffective for the company.

hsylves
hsylves

Personally I don't care. I look at myself as an intelligence mercenary. I guess I'm motivated my #1 money and #2 the excellence of my execution. So since I have an apparent massive ego, the failure of management types who are supposed to manage me isn't my problem. Frankly I kind of like watching them muck stuff up when it comes to people - gives me a chuckle.

findlay.herbert
findlay.herbert

"Human Capital Management" is simply an output from the consultant-speak random buzzword generator that is intended to create yet another revenue producing "service line". Unfortunately the misdirected (read mis-led) fools that use such terms think they are offering solutions to client problems of ever-increasing complexity to fund the avaricious partners of the consulting firms. Pity they haven't realized that, as Einstein said, "Genius is the ability to reduce the complex to the simple" - not the reverse.

joann.mcelvaine
joann.mcelvaine

Well Said! I absolutely agree with Ramon's perspective. I think the sterilization and dehumanization of the workplace in America is a major contributor to the discontent of staff and the high levels of stress. Going to a workplace that defines you as "human capital" or "human resources" (another term I despise) establishes a sense that you are less than a person from the outset. Thanks to Ramon for expressing this frustration so well.

trevorhunter
trevorhunter

Hi, Glad I???m not the only one who finds this term insulting and degrading. I would share your opinion that it???s not unreasonable to expect your organisation to treat you as a person bit sadly in the age of the global corporation we have little choice. I first became aware of this term when SAP changed the name of their Human Resources module to Human Capital Management module, SAP are never slow to pick up on new Management buzzwords so we are probably stuck with this term for the foreseeable. Shame. Regards, Trevor.

jneilson
jneilson

If I used a term like Human Capital to describe the employees where I worked I'd be tarred and feathered. But my work place isn't an adult baby sitting service and terms like that aren't necessary.

talgryalen
talgryalen

Hear Hear I get tired of being just another piece of machinery.

pccoder28
pccoder28

Good article. The terms "human capital management" and "human resources" remind me of another phrase from the sinister Nazi past: Nazi leaders used the odious phrase "human material" to describe slave labor in Speer's economic machine during the Second World War. The phrase "human capital management" shows that our thinking is ethically backward--we human beings should not be thought of as existing to serve the economy as capital, instead, the capital-driven economy exists to serve the human beings.

jcowanjr
jcowanjr

I think the term Human Capital is used to bring more attention to concerns related to Human Resources. Human Resource concerns are often left last or not even considered by many executive level managers. Sticking the word 'capital' to the phrase lets everyone know that your people is a large, capital expenditure (payroll and the associated taxes is usually the largest cost of most businesses). I always felt it was rather progressive to refer to it's people in such a way.

Dr Dij
Dr Dij

to their foreheads. "Greetings Sprawl-mart customer 1e4-3bc49!" for company employees, an asset tag will do. Till we get the implantable interface. :)

NickNielsen
NickNielsen

[i]HCM is about managing people in a way that accumulates human capital to drive competitive success [/i] That's the first time I've ever won buzz-word bingo on a single sentence! Thanks! You made my day!

JamesRL
JamesRL

In most organizations I've belonged to, and in my "Finance for non-financial managers" courses, capital is not just spent. Capital is invested in items with a high dollar value. Capital is managed carefully. Any capital purchases had asset tags and were tracked. Versus the money I spend for heating the building, buying office supplies is simply spent. Those are expenses or the cost of doing business (CODB). Now which one do I see my employees more like? I invest in employees. I provide training, I look at them as long term assets. So I would agree to disagree with your perspective. James

NickNielsen
NickNielsen

I take my card and I stand in line To make a buck I work overtime Dear sir letters keep coming in the mail I work my back till its racked with pain The boss cant even recall my name I show up late and Im docked It never fails I feel like just another Spoke in a great big wheel Like a tiny blade of grass In a great big field To workers Im just another drone To ma bell Im just another phone Im just another statistic on a sheet To teachers Im just another child To irs Im just another file Im just another consensus on the street Gonna cruise out of this city Head down to the sea Gonna shout out at the ocean Hey its me And I feel like a number Feel like a number Feel like a stranger A stranger in this land I feel like a number Im not a number Im not a number Dammit Im a man I said Im a man - Bob Seger

IT-Sage (bschirf)
IT-Sage (bschirf)

The post above explains what HCM really means. Yes, is it mgr-speak for a complex concept, but it doesn't mean what most think it means. It's really all about making an organization better through its people, not managing them like livestock. Thank you mordra! Finally, a voice of reason in the middle of this angy mob! Unfortunately, now that the techs are rioting over this article, few will patiently read all of the replies to learn the truth.

Tony Hopkinson
Tony Hopkinson

Well done that man. Definite pat on the back in the next golf game. If I worked for you, I'd take that hook, line and sinker. No really...

bobsmith
bobsmith

But if people took time to research and learn they wouldn't be able to jump to conclusions and then get appropriately bent out of shape over a couple of words. The company I work for is so busy with our 6 Sigma efforts, our customer and employee satisfaction, our Malcolm Baldridge application, etc. that we don't have time to get bent out of shape over trivialities like whether or not we're offended by words. Buck up, work hard, innovate, learn, improve, work harder and then reap the rewards and quit your whining. You people sound like Europeans!

Tell It Like I See It
Tell It Like I See It

Your post brings another connection to Nazis in mind. Modern corporations seek efficiency at all costs (their general wording). Many people believe that the most efficient form of government ever invented was the Nazi government. Little wonder, then, that corporations seeking efficiency at all costs would take clues from them.

Tony Hopkinson
Tony Hopkinson

they ty to put across "Our people are an asset" If we have a dumbest post of the year competition, I'm putting a bet on you. Got to be worth a fiver.

james.stewartnewman
james.stewartnewman

I am neither a lum of coal or my employers capital. If I am ever in position to do so I will change HR back to PERSONnel. For thouse of you who think I just don't get it... well take a number and be treated as such.

BookiesDad
BookiesDad

They call it a Social Security Number. While not actually a permanent tattoo, it does permanently follow it's designated holder. It is the governments' attempt to uniquely identify us while looking out for our best interests. No need to follow that further. Doesn't matter what it's called on the front end; human capital management or people skills: these front end concepts are as good or as bad as the actual people working them on the back end. I think it boils down to resume fluff. Someone with excellent people skills might be worth 50K. But 5 years experience in human capital asset management must command at least 90K. Don't believe the hype! Trucks, lorries and tractor trailers are all basically the same thing.

Tell It Like I See It
Tell It Like I See It

Actually, there was an old TV show called "Dark Angel" where this one government agency or company actually did put bar codes on "their assets" (on the back of the neck). Said assets were a bunch of genetically engineered kids, some of whom escaped from their compound and into the real world. Guess the show was ahead of its time in a sense. :)

Tony Hopkinson
Tony Hopkinson

for a house, you have to fit zeitgeist in there. He needs to get rowing the boat in the same direction in there somehow as well for the big prize. Old idea, new words , same BS

BlueKnight
BlueKnight

and understand completely. You are to be commended for investing in your employees, but not all employers see employees the same way. I was approaching the "capital" aspect more from the negative side since that was the original connotation. I don't really think we disagree on anything other than my word choice. Thanks

Tony Hopkinson
Tony Hopkinson

Three words that prove that you are both talking bollocks Annual pay increase. When human assets become overheads. It's not my fault bean counters run the show, but they do. Value is hard to stick a number on for the ledger. Cost, well that one is easy isn't it. So do we increase a nebulous value, or reduce a nice easy cost? I wish you could sell this stuff, no point in whining at me because you are failing though. I'm not a customer for it. I'm an asset when they want me to feel good about being paid less. And a cost when they want to scare me in to being paid less. I'm from Earth by the way, yourself ?

Tony Hopkinson
Tony Hopkinson

Presumably you are in HR, since you managed to unintentionally offend several million people with one carelessly crafted missive. Now where's that logo, got to go work on the snap in my salute.

JamesRL
JamesRL

This continued use of analogies between the Nazis and modern corporations is truly juvenile. Furthermore it really makes light of the true horror of the Nazi regime. Members of my extended family fought that tyranny and died to end it. If you think corporations and efficiency is a recent concept, you should read Adam Smith, whose books helped inspire the American revolution. James

TonytheTiger
TonytheTiger

by the company (not people IN the company). Otherwise you'll get into areas like favoritism and discrimination. For example, an employee comes to you and tells you he needs a raise because his brother and sister-in-law just died in an automobile accident and he's now raising their three children along with his own three. Do you give him a raise? Is it "mean" to not give him a raise? Or a woman who has used up all her leave time and then some, due to a chronic health condition, but refuses to go out on disability (you are contractually forbidden to replace her unless she does). It's creating a real hardship on the remaining employees, who are trying ... but are falling behind because of the extra work. Are you a "bad guy" for insisting that she take disability? Do you really expect the company to put the needs of an individual above its own? What of the other "individuals" who work there? Is it OK to force them to sacrifice for the one?

NickNielsen
NickNielsen

A tractor-trailer is an articulated lorry. If we're going to discuss terminology, let's get the terminology right! ;)

Dr Dij
Dr Dij

I think is same chick who is now on Bionic woman along with Starbuck? Was a good show, alot to think about our reliance on computers. I was thinking of the Mad-TV skit (maybe SNL?) where Sprawl-mart (from Simpsons) comes to town and the guy with small store fights it but ends up coming into store zombieish with barcode on his forehead :)

NickNielsen
NickNielsen

I don't win so often that I'm going to quibble over the size of the prize! :D

Tell It Like I See It
Tell It Like I See It

I have no intntion of "making light" of anything related to Nazis. Actually, I hope people begin to understand at least some portion of that horror you speak of. I hope it truly scares the you-know-what out of them. I also hope people begin to see that the reason the Nazis were so efficient was because of their brutality and ruthlessness. I also hope that people realize that such ruthlessness is not limited to governments. And frankly, I hope that when people do realize this that we can avoid such horror in the future by learning from the past.

aiforbes
aiforbes

I'm pretty sure if Adam Smith saw the state of the world today, he'd thank you for not telling anyone else he had any part in making it so. Maybe you should read a rather more recent tome on the workings of the free market, "Capital" by Karl Marx. He saw most of this stuff coming 150 years ago. In Marx, labour (people) is considered as a 'factor', one of several things very distinct from capital . . . in that capital is by definition something to be used up, burnt through, replenished by exploiting what you already have. And that's pretty much the same definition of capital that's at play in the phrase 'Human Capital.' Maybe the Nazi analogy is over the top, but there isn't really any more succinct way to say 'inhumanly pragmatic and efficiency-obsessed' and in one breath. And hey, just wait and see, Global Capitalism may match the Nazis on overall cruelty yet.

Tell It Like I See It
Tell It Like I See It

Actually the main female character was played by Jessica Alba (of recent "Fantastic Four" fame). The male lead was played by Michael Weatherly (I think) and he is currently on "NCIS". Actually I haven't watched Simpsons for a number of years now. Just sort-of drifted away from it. One (short-lived) show that really showed some of our reliance on computers (in a sense) was "Jake 2.0". He had nanobots enhancing his senses, giving him strength, speed, etc. In some ways it was similar to having bionics. What was really interesting was when he was caught by a small portion of an EMP blast and it almost killed him. Real nice analogy....