Saturday 28 March 2009

Engagement and human capital


   I wrote in my recent post on 'A' that I'd be posting more on engagement surveys soon.  However, I also noted that there is still a surprising level of confusion over satisfaction and engagement, and wanted to deal with this point first.  And actually, the very first thing I want to write about is engagement and human capital.


First: human capital.

I've stressed in several earlier posts that people aren't human capital.  And HCM isn't managing people as human capital.

Human capital is the full range of attributes that can be provided by employees, and others associated with an organisation, to that organisation.  And which have a particular value to this organisation (forms part of its organisational capability etc).  It consists of things like capability, engagement, health etc - but the specifics will differ from organisation to organisation.  HCM is managing people for the accumulation of this capital, in order to create value.

The important thing to note (for the purpose of this post) is that human capital is a category, a bucket - not a single thing.


Then: engagement

Engagement is both a process (somebody or something can engage somebody else) and a state (somebody is engaged).  But what is that state?

The best well known definition is 'say, stay and strive', which several research firms / consultancies take credit for.  This suggests that the state of engagement is a mix of advocacy, retention and commitment (display of discretionary behaviours).  One of my recent favourite definition's is Engage Group's mix of satisfaction with change management, involvement in 'big ticket' decisions, understanding of personal contribution, empowerment, involvement in 'everyday' decisions.

The common factor in most of these definitions is that they're categories / buckets too.  Engagement doesn't actually mean anything on its own without understanding the constituent parts.  Which is, I think, why a lot of organisations still struggle with the concept.


Human capital and engagement

Engagement is actually simply a small bucket within the bigger bucket of human capital.  And just as each organisation needs to decide what human capital it needs, it needs to define engagement for itself. 

An obvious example is retention.  If you've been defining engagement as 'say, stay and strive' but nobody's leaving in the current environment, then perhaps you need to reconsider what you're measuring / trying to manage.

So ask yourself this - what's in your bucket?





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