"It is a phrase loved by HR people, but even the most jargon-friendly managers struggle with the term "human capital" and have little idea what it means."
So don't use it with them then!
There is a difference between HR terminology that we need to use between ourselves, because otherwise we are unable to effectively discuss important and often intangible elements of people management, and unnecessary jargon that we sometime mistakenly use with managers and employees - even when these involve the same words / terms.
Human capital is the only term we have that refers to the full range of attributes provided by employees to an organisation that provide the basis for meeting current business objectives and generating new business opportunities.
Our ability to manage people for the good of the organisation is compromised if we don't have access to this term.
Does it help to use this term with managers and employees? Most often not, no.
However, I also think there is something to be said for the argument that organisations which really want to gain competitive advantage through their people will want their managers to have a sophisticated understanding of people management, and not just the HR function. In this case, they will want their managers to understand the importance of human capital too.
Hi Jon,
ReplyDeleteNow, Imagine what problems we have about 'HC' term in a developing country with another language!!
Good challenge Aydin. What is the nearest Persian equivalent (is that the right language)?
ReplyDeleteHurrah for common sense.
ReplyDeleteI am fed up of the code that HR people speak.
We just wouldn't put up with it in any other area (accountancy, law - they've all had to reform).
A lot of this stuff ain't rocket science (doesn't by the way, mean its easy) so why try to make it sound as such by overcomplicating things?
I shouldn't complain too much - we've built a nice business centred on a bullshit-free approach to HR.....
Nick Jefferson, Director
www.couraud.com
Nick, you know I'm a big fan of Couraud, but I do think this is one area where we see things slightly differently.
ReplyDeleteI'm no fan of bullshit but I do believe we need appropriate terminology if we're going to deepen our understanding of some of the intangible and therefore conceptual outcomes which should be a major focus within our strategic role.
No, it's not rocket science, but yes, it can actually be quite complicated and I think we do ourselves an injustice by trying to over-simplify.
As I've written before (http://strategic-hcm.blogspot.com/2009/01/more-on-language-of-people.html) if people are as important as organisations say they are, then they need to become more comfortable talking in a more people focused language.
I like Inform's comment (http://blogs.infohrm.com/2008/08/15/hr-jargon-good-or-bad/) picking up on this post, that “no one tells Finance that they shouldn’t use terms like ‘ROIC’ just because other staff don’t understand their meaning”.
I guess what I'm trying to say is that if terms like human capital are going to be seen as jargon and diminish the credibility of HR and the impact of what it's trying to do, then it's stupid to use them.
HOWEVER, this can only be a part-way solution, and is what I refer to in my book, and other posts as adding value (http://strategic-hcm.blogspot.com/2007/12/people-and-cogs-creating-value.html).
To CREATE VALUE, to generative competitive advantage through people, organsations need to get a handle on the language of people.
Human capital shouldn't be seen as jargon by anyone working in an organsisation IF it's really the most important asset that they have.