The Human Factor

man-fingers-crossed

Businesses that don’t under the value of their human capital resources are in error.  In spite of the power of technology and automation, it takes people power to make business operations work.  Failing to understand this reality will leave an organization vulnerable to their competition. This week we will cover human factor buy-in, the last element in socio-technical systems.  

Organizations must shift their paradigm to viewing workers as more than mechanical parts for their organizational objectives. Gareth Jones and Jennifer George, authors of Contemporary Management, maintain that managers have a responsibility to effectively oversee their human resources which includes the people involved in the creation and distribution of goods and services. [1] Given this reality, the ability of managers to leverage their talent is crucial.  

Talent management is the process through which employers anticipate and meet the needs for human capital.[2]  Peter Cappelli, author of Talent Management, explains how mismanaging employees in organizations is problematic for an organization’s sustainable success:  “The failures in talent management includes mismatches between  supply and demand on the one hand, having too many employees, leading to layoffs and restructuring, and on the other hand, having too little talent, leading to talent shortage. [3] 

In the United States, talent management miscues fall into the following categories:  (a) Do Nothing Mode – makes no attempt to anticipate human resource needs and develops no plans for addressing them and (b) Reactive Mode – relies on outside hiring to meet human capital needs, but this approach has begun to fail now that the surplus of management talent has eroded. 

 https://www.youtube.com/watch?v=jTMs3hp-LFU

Trust is the cornerstone of any meaningful relationships in organizations.  Yet, many employees do not trust their organizations due to the lack of employment security in most companies.  According to a USA Today poll, nearly half of those interviewed said that corporations can be trusted only a little, or not at all, when it involves looking out for the best interest of employees.[4] 

Michael Hackman and Craig Johnson, authors of Leadership: A Communication Perspectives, argue that a leader’s credibility is directly related to the quality of his relationship with followers.[5] Marios Katsioloudes, a researcher specializing in Socio-technical analysis, explains that as profitability of mechanization increases, the importance of technology is implied while there is a devaluation of the workers. U.S. businesses cannot point to the lack of employee performance on a global front for mismanagement errors.[6]

Japan, a long-time benchmark for American companies, is being defeated by American employees; today, the average U.S. worker puts in 36 more hours per year than Japanese workers (1,825 vs. 1,789). 

Over the last two decades, balancing work and home life have been difficult since Americans have added 200 hours to their annual work schedule.[7] Employees want to be valued. 

Jeffrey Pfeffer, author of The Human Equation, acknowledges that organization success is directly related to implementation, and this capacity comes from the workers, how they are treated, their skills, and their efforts as it relates to the organization.[8] 

Leaders should see followers as more than mechanical parts for their organizational objectives. Managers assume that giving employees new technology is enough to keep them happy. Likewise, leaders should view followers as a vital component of the socio-technical system. 

Discuss the concept of human factor buy-in for today’s organizations.

 © 2013 by Daryl D. Green                                    

 


[1] Contemporary Management by Gareth Jones and Jennifer George

[2] Talent Management by Peter Cappelli

[3] Talent Management by Peter Cappelli

[4] “Leading others while supporting organizational values” by Daryl D. Green

[5] Leadership: A Communication Perspectives by Michael Hackman and Craig Johnson

[6] “Leading others while supporting organizational values” by Daryl D. Green

[7] “Leading others while supporting organizational values” by Daryl D. Green

[8] The Human Equation by Jeffrey Pfeffer

 

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13 thoughts on “The Human Factor

  1. In our Management class we have discussed creativity and the importance of creativity. An organization will lack creativity if they lack human interaction. The absence of humans is the absence of creativity. A lot of times when the word creativity is thrown around the first thoughts are art, design, mainly just something new. A key component of creativity is improvisation. It is used a lot in reference to Drama or Theatre, but really everyone improvises on a daily basis. “A very high percentage of what leaders do is actually improvised behavior. You pick up the phone and are confronted by an unexpected problem, you follow the flow of conversation in a meeting and then react spontaneously to new ideas, you engage in impromptu hallway conversations about any of a thousand topics that might come up” (Denhardt, 2006). An automated system cannot handle an irate customer. A human can brainstorm ideas on how to solve a problem. It is important to be able to be creative when it comes to problem solving. I think that is something organizations forget about when implementing automated systems or relying on machines to do work.

    Denhardt, Robert B.; Denhardt, Janet V.. Dance of Leadership : The Art of Leading in Business, Government, and Society.
    Armonk, NY, USA: M.E. Sharpe, Inc., 2006. p 108.
    http://site.ebrary.com/lib/lmunet/Doc?id=10178074&ppg=118
    Copyright © 2006. M.E. Sharpe, Inc.. All rights reserved.

    • Rebekkah,

      Right on! Machines (currently) do not have the capacity for innovation. Humans do!

      Therefore, organizations should be grooming trait out of their employees. Most done!

      Professor Green

    • That is a very good point Rebekkah. This ability to improvise behavior is another reason that some outsourced jobs are returning to the US. ““Companies are realizing now that they might have outsourced jobs that they never should have,” said Atul Vashistha, chairman of Neo Group, which advises firms on outsourcing. (Schectman, 2012).Improvisation also requires an understanding of culture and context. Recall the last time you had to deal with an overseas call center and the employee couldn’t understand you problem. Some of that is language but most of it is culture. When I was a theatre student, I filled out my electives with classes which would teach me about human nature and the natural response to given contexts. This was precisely to help me be innovative and creative in performances. Skills which translate surprisingly well in a business context.

      Schectman, J. (2012, April 27). Some IT jobs are coming (back) to America. [Web log post] Retrieved from http://blogs.wsj.com/cio/2012/04/27/some-it-jobs-are-coming-back-to-america/

  2. Before an employee can become an effective member of a firm’s socio-technical system the firm will need to embrace corporate social responsibility (Edmans, 2012). So long as shareholders are held high irrespective of other firm stakeholders, firms will struggle to employ effective employees.

    At my company this dynamic plays out in how benefits are handled. In monthly events executives meet with corporate employees to discuss human resource matters. Through recent acquisitions, these leaders are now directing the largest company in its industry- unfortunately, human resource policy has not caught up with the company’s success. Executives have vocalized responses to HR questions with “we are competitive with industry standards”. So long as a company downplays its role as champion of employee talent it will fail to get the best out of its socio-technical systems.

    Edmans, A. (2012). The Link Between Job Satisfaction and Firm Value, With Implications for Corporate Social Responsibility. Academy Of Management Perspectives, 26(4), 1-19. doi:10.5465/amp.2012.0046

  3. I have once worked for a company that did not effectively manage and value their human capitol. This caused lack of trust and a lack of desire to work hard for this company. I have also worked for a company that would take great measures to remedy a situation for an employee that was in need. They cared for their employees and it shows with the work that these employees provided. There was nothing I would not do if something was needed quickly or on the weekend. “For high potential the quality of the management running the company is far and away the most important predictor of engagement, followed by their belief in their own career and their pride for the organization” (Church, 2013, p. 3). An employees pride is related to their manager and the company as a whole thus making management the leading factor in providing excellent talent management.
    Church, A. H. (2013). Engagement is in the Eye of the Beholder: Understanding Differences in the OD vs. Talent Management Mindset. OD Practitioner, 45(2), 42-48.

    • I agree Jessica. I think this relates to team-building and team-building is something that has to continue throughout the organizational goal. “Most team members are primarily concerned about relationships and about being valued as a team member, before they are concerned about the task that the team is to undertake. Feeling secure in a group environment is an important prerequisite before individual contribution. The good team leader is able to spend time building the team, not only when the team starts off, but also when a newcomer joins an existing team”(Dealy, Thomas, 2004). A really great manager will continue to support his team even after the goal is accomplished. It is like when people say to keep in contact with someone you have worked with who is well-connected. A good manager understands that a good team may be needed in the future.

      Dealy, M., & Thomas, A. R. (2004). Defining the Really Great Boss. Praeger.

    • Jessica, I agree that strong managerial leadership can motivate employees. I would also argue that when implemented well, economical motivators can be just as effective. Take year-end bonuses for instance. When poorly implemented, year-end bonuses are tied loosely to broad goals that an employee cannot have a direct impact on. When implemented well, year-end bonuses are a financial reward that gives an employee a sense of achievement and purpose (IMBERMAN, 2012). So while strong management should certainly be heralded as a powerful people motivator, a number of properly implemented economic motivators can do the job just as well.

      IMBERMAN, W. (2012). Motivating Employees: What Works? What Doesn’t Work?. Foundry Management & Technology, 140(11), 23-26.

  4. I don’t think it is difficult to see why a lot of people didn’t think that corporations could be trusted with looking out for the best interests of its employees. People feel this way because in many cases there is such a huge distance between the very top and the bottom that it would be easy for the very top to use their human capital the same as machinery to turn a profit.
    Customer service, for example, is a vital part of any companies process because the level of customer service a customer receives could turn them away or bring them back. In Jake Weatherly’s article he expands on the human factor in customer service. “It all boils down to the human factor. Empathy, patience, and the true desire to help people are the foundation. Building skills surrounding these key factors to provide excellent service can be accomplished through training, experience and quality infrastructure” (Weatherly, 2008).
    In the customer service facet, the companies must buy in to the human factor because the way the their customer service performs could result in increased or decreased satisfaction from the customer and that also leads to increased or decreased profits.

    Weatherly, J. (2008).
    Understanding the human factor. Business in General.
    http://bplans.typepad.com/blog/2008/03/understanding-t.html

  5. I often joke that I have ‘drunk the kool-aid’ on my organization; that they will have to ‘kick me out for old age’. I am beginning to recognize that this sort of employee loyalty is rarer than I thought. Why do I feel so strongly? Because my company truly gets it that, as stated above, “it takes people power to make business operations work.” As stated on the company website, “The real asset at Scripps is the people, the collaborative spirit, and the overall heartfelt passion that everybody here truly has for this business. Our job is to maintain and nurture our people so the company’s future success flows from them.– John Lansing, President, Scripps Networks” (Scripps Networks Interactive, Inc, 2013). While many companies pay lip service to statements like this, personal experiences have led me to trust that they mean what they say. With extraordinary benefits such as subsidized in-office massages and quality bereavement leave to a commitment to openness which enabled me to ‘pick the brain’ of senior level executives for guidance on my graduate concentration, I have experienced the truth of that statement.

    Scripps Networks Interactive, Inc (2013). Our People Network. Retreived http://www.scrippsnetworksinteractive.com/careers/life-at-sni/our-people/our-people/

  6. I believe the largest factor to human buy-in for organizations today is the loss of human capital, and the psychological effect that resulted in employees. Outsourcing of jobs to lower wage regions has eliminated the human capital factor that originally created the business and the psychological effect on employees has resulted in diluted trust towards organizational management. The recent economic downturn has intensified the distraught that employees feel towards management because companies are operating with a skeleton workforce. “The psychological effect has been greatly overlooked.
    Rehiring will eventually bring the number of bodies back up in companies, but the loss of human capital will be hard to replace especially in the short term. When the economy recovers, there will be great desire to grow profits and revenues and this requires the company to be operating at peak performance. Unfortunately without enough human capital, it is going to be mightily difficult. This is the human capital crisis that companies will be forced to deal with in the near future”, (Human Capital, 2011).

    Loss of Human Capital is the Next Crisis. (2011, April 3). Retrieved from: http://capitaleconomic.com/loss-of-human-capital-is-the-next-crisis/

  7. Many theories explicitly connect investment in human capital development to education, and the role of human capital in economic development, productivity growth, and innovation has frequently been cited as a justification for government subsidies for education and job skills training.
    In my business, we try to encourage the employees by fostering a work environment that includes creativity, thereby allowing to be a part of the decision-making. Today, most theories attempt to break down human capital into one or more components for analysis, usually called “intangibles”.

    Wikipedia

  8. Despite all the recent advances in technology, technology alone cannot run a business. No matter how much technology we introduce, the consumer is going to be a human being. The products and services that businesses offer are going to be used by humans, so shouldn’t our most valuable resource as a company be the humans that think up and develop our products. A computer can be a tool to build them but it ultimately can’t decide what products we need. It is the people in a company that we need the most. And one way to exploit this resource is by using peer networks. An interesting article by Kyle Luthans describes the use of peer networks to develop products and help integrate them with new markets in mutually beneficial ways. By meeting with other peers, people hold discussions and come away with their own useful opinions and ideas. These are the ideas that lead to innovation, and all of this is due to the most important resource a business has, its employees.
    Luthans, Kyle. Development of Human and Social Capital Through Industry Peer Networks. Research Yearbook, 2010.

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