Comments are closed. No accounting for taskforcesOn 11 Nov 2003 in Personnel Today TheKingsmill report wasn’t worth the wait. It flunked the central question of howto effectively measure peopleAtToyota in the US recently, managers were shocked to get hold of the latestemployee survey. This showed that staff felt performance ratings wereirrelevant to pay and promotion prospects, while despite all the company’s talkabout the importance of training and gaining experience in different bits ofthe firm, doing so did not enhance careers. Indulge the bosses’ delusions was thecollective view.Inresponse, the company felt it really had to prove to its staff that performanceand training mattered. So it went back over several years’ records andestablished what had happened to people who were rated highly in appraisals,those who undertook development, and those who gained experience onassignments. Sure enough, they were better paid and advanced quicker thanothers who did not. The company could put numbers on how much better they did.The system was doing what it was supposed to. Thisstory comes from Play to Your Strengths*, a scholarly new book by fourconsultants at Mercer. It strikes me as a sensibly demystifying way of lookingat the mystifying subject of human capital. HR departments should borrow sometricks from marketing, the authors suggest. As well as finding out preferencesby asking people, marketers examine spending habits. HR should do the same withbehaviour. Modelling the statistical patterns of how workers respond to therules and rewards of an organisation (the book calls it ‘internal labour marketanalysis’), ‘the facts’ about the impact of HR become clear, and “thesay-do trap” can be avoided. Takeexit interviews, for instance. Pay is often the most popular reason for leavingbecause it is a socially acceptable motive, whereas telling the truth can burnbridges. Yet a company really does need to know why people leave. The solutionis to track behaviour. People may leave from a particular grade at a particulartime, in flight from a particular manager. Model how employees move through anorganisation statistically, counsels Mercer. An objective answer will emerge,and HR efforts can be directed accordingly. Mercercalls this “the new science of human capital measurement”, whichmakes it sound a little sinister, a little ‘Taylorist’ (see box). Yet while itmay be complicated, it also makes sense in a way that most things written abouthuman capital do not. Human capital, the book says, is “the stock ofaccumulated knowledge, skills, experience, creativity, and other relevantworkforce attributes” – in other words, the full gamut of labour servicesavailable to an organisation. ‘Human capital management’, meanwhile, is aboutquantifying the value of such attributes and managing on the basis of thatknowledge. It is, therefore, subtly distinct from HR. Thatseems clear enough. So contrast it with the definition of human capitalmanagement used in last week’s report from the Accounting for People taskforceheaded by Denise Kingsmill. Human capital management (HCM), it says, is “astrategic approach to people management that focuses on the issues that arecritical to an organisation’s success”. Itis hard to imagine a worse definition. What issues? What does ‘a strategicapproach’ mean? Could you not use exactly the same words to describe humanresource management? Is HCM just a repulsive new buzzword for personnel, then?If so, I’m sure we could live without it.Froma close reading of the Kingsmill report and related website, it soon becomesclear that contributors – those who don’t sound too mystified, that is – aretalking about wholly different things. Some use HCM as a new label for the sameold same old. Others see it (correctly, I would say) as the attempt to measurethe value of human assets and the effectiveness of HR interventions.CadburySchweppes, for instance, waxes in the report about its commitment to diversity,learning and careers – what most of us would call bog-standard HR. But there isnothing about linking these policies to performance. A more recognisablyHCM-inspired approach is demonstrated by the RAC motoring organisation. Thecompany has produced a “People P&L” (yuck), which quantifies thecost of turnover, retention and absence and uses them as performance indicatorsacross business units. Inother case studies, employee opinion surveys form the mainstay of attempts tomeasure the effectiveness of people management. There is a long pedigree ofsuch surveys in HR, and no-one would deny their value. But do they reallymeasure the effectiveness of HR programmes? Or, rather, do they simply reflectwhat workers think at any given moment – the ‘say-do trap’? Thetaskforce does not have a view. In fact, once the HR world stops being sograteful that the Government is interested in their subject, I hope they cometo see that the Kingsmill taskforce does not have a view about very much atall. To summarise: companies should be encouraged to report somethingpeople-related. In a few years, it hopes a consensus will emerge about whichcategories of information provide the most insight. For the moment, anythinggoes.Thetaskforce has thus flunked the central issue that makes Mercer’s book sotimely: how do you distinguish between an effective way to measure the impactof people management and an ineffective way. Meekly, the Kingsmill report saysthat out of all the well-known approaches – the Scandia Navigator, balancedscorecard, HR benchmarking, etc – “none is widely regarded as providing acomplete answer”. Well, that was worth the wait.Sohere is another distinction: there are taskforces that wait for a consensus andtaskforces that try to build one.‘Taylorism’in a nutshellFrederickTaylor wrote The Principles of Scientific Management in 1911. These principlesbecame known as ‘Taylorism’:–Develop a ‘science’ for every job, including rules motion, standardised workimplements, and proper working conditions–Carefully select workers with the right abilities for the job –Carefully train these workers to do the job, and give them proper incentives toco-operate with the job science –Support these workers by planning their work and by smoothing the way as theygo about their jobsHowever,in reality Taylorism changed the nature of the workplace forever, introducinghierarchical leadership, split locations for office and manual work, thedivision of labour, and changing the focus of business to products and outcomes rather than theneeds of the customer. Perhapsone of the most insidious effects of Taylorism has been ‘office envy’ – when itcomes to offices, size seems to matter.”Theprincipal object of management should be to secure maximum prosperity for theemployer, coupled with maximum prosperity for the employee,” said Taylor.Source:Cornell University Previous Article Next Article Related posts:No related photos.