Business Value of People

Okay, we covered Business Value 101 and 102 and learned a bit about setting the HR and Corporate Communications agenda around value creation as defined by the customer. But what about the value of people? Oh yes, that. Very important stuff here—the heart and soul of HR expertise too—the almighty value of people. They are human beings after all. The preachy, simpleton nature of this mantra is self-appointed virtue at its worst.  We know! We love humans too. Great workers make all the difference. Poor job performers are problems of course, but such employees still have the right to dignity, opportunity to improve, respect and all that good and fair stuff. But then don’t call people “assets” or “human capital” when you list them as payroll expense on the Income Statement. Words to denote the cash liquid value of people are demeaning, not flattering. He’s a great guy and worth so much more than his payroll and benefits expense. You mean his life is worth more than $47,000 annually?!

In fairness, it’s not just HR.  Most people in business learn early to talk about the value of people as if humans literally lay golden eggs. The more we grow and nurture them, you see, the more people will “produce.” And as many HR gurus will quickly remind, investments in people will power-up these flesh and bone machines to be more efficient, effective and productive–see, demeaning.

Ah, but wait.  It does explain why HR is the self appointed champion of the little guy; it’s also why HR talks about the importance of employee morale; and it is the main reason why HR spins the tale about being employee advocate committed to your personal success. And don’t forget about employee training and development. That’s a big company investment in people. And HR is all over it. Investments in people, yay!

Let’s Look at the Record

Investments in people, huh? It’s a good line; but let’s look at the record.  I’m the first to boast that many in our dear profession do a lot of good for people and for business. Mentoring high potentials, for example, is a workplace kindness that can really make a difference.  Coaching and challenging these best and brightest are good-to-great stuff too.  HR is often involved.  Helping people out to wisely use their benefits, maximize their 401(k), seek help for their teenagers through the EAP, lots of things like that are good HR all around. We are also huge believers in the Golden Rule and employee relations that not only protects, but demands respect for the dignity and character of every worker. HR’s best does the job on that one too. Effective Talent Building is no doubt the centerpiece for positive workplace change and true company greatness. And top notch HR professionals can lead the way there.  Pats on the back all around. Okay, I said it nice and I mean it. So here comes the rest…

Despite the obvious good, the profession at large has perpetually suffered from a huge credibility gap between what HR says and what HR does. Many boast to be employee advocate, job enrichment expert and workplace champion of fairness, professional development and personal growth. Yet consider the true role that human resource professionals usually play in most organizations.   Here goes:

Getting Most from People for Least

HR is generally charged with getting the most sweat-equity from people for the least possible amount of money.  I’m not talking about improved worker productivity either.  True productivity gains almost always make the human effort less strenuous, not more.  That’s good stuff and HR usually has nothing to do with it.  Instead, HR’s traditional focus on people is in the take-away category:

• Keeping salary and raises at the lowest possible rate that the market can bear. It’s a discipline in itself called “Compensation” and it’s most effective weapon are “salary market studies” also known as collusion.
• Cutting back on medical and dental benefits, limiting employee services and putting conditions on perks. HR calls it “optimizing.”
• Forcing return from injury and maternity leave as soon as possible . “Family friendly” is the HR buzz word there.
• Budgeting back overtime and reducing hours. That’s called “group time management” or “efficiency management” in HR jargon. Everyone else calls it what it is: expecting people to work faster and harder with fewer breaks; pushing for the same or greater ouput in less time;  and paying people less money.
• Replacing commission formulas on great sales people just as they really start raking in the money under the old scheme. HR types call this takeaway “variable pay analysis and redesign.”  The best sales people call it getting screwed and time to look for another job.

Firing People

We have all kinds of words for this one. The most understandable are “employment termination” and “getting rid of people” although these phrases are technically more akin to murder, not ending employment.  The words “layoffs” and “downsizing” are used most by business types while HR debates and revises the definition of these to suit their policy manual. In any case, it is HR’s traditional role to play grim reaper and hatchet person. And while I have heard stories where people report being happy to be fired, most describe it as a not-so-great experience.

The most insulting anti-people word used to explain this effort is “Rightsizing.”  So next time you get canned, don’t worry; HR says you have merely been “rightsized.”  Or is it the company that has been rightsized?  And why does a job termination have to sound right anyway? Either way it doesn’t feel right to the unemployed.  People who lose their jobs naturally feel screwed and we shouldn’t use a stupid word to describe it.

Punishing People at Work

Guess who is in charge of this well established company function?  Yep, good old HR!  Punishing people at work has been institutionalized by the human resources  profession.   This workplace legacy is, in my view, the biggest black eye to our vocation. I will blog on it more in future posts.  For now, suffice it to say that traditional HR misdirects roughly 80% of its people management programs targeted at five  percent of employees who do the wrong things.  This shameful folly–which is nothing more than spinning formal and legal methods to punish people at work–is known in HR speak as “progressive discipline.”

There is nothing progressive about it.  It typically restricts people with a lot of childish rules. “HR Guidelines” is the name.  The HR Police attempt to enforce administrative compliance to the kiddy rules with bureaucratic forms, legalese procedures  and disingenuous performance appraisal write-ups. This is called “helping people succeed” in HR school, but I’m not sure why.  Inherent in all this, off course, is documenting people out the door and calling it “coaching”. The most shameful subset, of which, is writing carefully crafted memos to the personnel file to protect the company and indict employees and then having  audacity to call the CYA-language “objective.”

A spin-off to progressive discipline is a less blatant, but even more damaging offense to mankind, whereby HR insists to treat greats and duds the same in the name of consistency. Thus creeps in terrible habits such as keeping all employee raises within one or two percentage points, regardless of far and wide variations in people’s actual job performance. Pay equity you know.   Of course, there is nothing fair and square about it if you are a top best job performer.  In fact, it’s punishing.

Advocate Not

So, in summary  that’s quite a list:

• Getting the most from people for the least and taking good things away
• Firing people and calling it by every other name
• Leading the long held tradition for punishing people at work

All the while claiming to be employee advocate!

So, if you are one of these “Vice Presidents of Human Capital” you may want to rethink your cutesy business card, because employees get the game– and they think your title is disingenuous. It is no wonder why so many people hate HR.  But happily, any company can make the Switch to a far better way. In other posts we share our Human Resource Planning methodology that details how to build talent, share knowledge and drive out mediocrity with transparency and integrity.   The goal: increase the value of your company– that’s your business after all– the company.  The “value of people” meantime is none of your business.  I believe that’s God’s Department.  Let’s get back to work for the customer and leave the value of people to Him.   Amen!