A primary factor in most business’ success is the people who work for the business. Caring for the people who work for your business by investing in their education, training, compensation, motivation and empowerment creates a culture and environment where people will want to give their best work for the company.
The idea of people development has gone through many changes and descriptions over the past one hundred years. I believe words matter and when people are called assets and capital it conveys a sense of ownership by the company over its employees. In my mind these terms are completely opposite of what stewardship and people development represent. People should not be considered an asset to be used, given occasional repair and maintenance, depreciated and eventually replaced.
The concept of managing people and being aware of training and compensation strategies is not new in the business world. The idea of managing personnel emerged as a clearly defined field by the 1920s. It began largely as addressing the technical aspects of hiring, evaluating, training, and compensating employees. Personnel management did not typically focus on the relationship of employment practices on overall organizational performance.
Economist Theodore Schultz invented the term “human capital” in the 1960s to reflect the value of human capacities. He believed human capital was like any other type of capital; it could be invested in through education, training and enhanced benefits that lead to an improvement in the quality and level of production. The term Human Capital is a measure of the economic value of an employee’s skill set. The concept of human capital recognizes that not all labor is equal and that the quality of employees can be improved by investing in them; the education, experience and abilities of employees have economic value for employers and for the economy as a whole.
In recent years companies have been emphasizing that the most important asset at their company isn’t something they can put their hands on. It isn’t equipment or the physical plant, and it isn’t data, technology, or intellectual property. The most valuable part of their company is the people. They use the term human capital to describe this asset and believe any plans to move their business forward has to start there.
Human Resource Management began to develop in the late 1970s in response to the increase in competitive pressures in American business as a result of such factors as globalization, deregulation, and rapid technological change. These pressures prompted businesses to begin to engage in strategic planning. This was a process of anticipating future changes in the conditions of the working environment and aligning the various components of the organization in such a way as to promote organizational effectiveness. William R. Tracey, in The Human Resources Glossary, defines Human Resources as: “The people that staff and operate an organization,” as contrasted with the financial and material resources of an organization. A Human Resource is a single person or employee within your organization.
Today companies are starting to see that an effective people development strategy is an important key for business success. This strategy needs to be able to react to changing business conditions. However, people development is not an easy strategy to implement. Many firms think they are training their people. Unfortunately many of their people do not think they get enough training.
People development strategy is about growing and developing the business. If the business does not grow and change, then there will be no business. Development of business processes needs to be in step with developing our people. The goal is to develop people at the same time as the business changes or adapts.
If the business changes but people don’t, the people in the business can feel threatened or stresses. When businesses develop their people but the jobs and roles do not change, then often people get frustrated and leave. Or they forget the training they have been given! The idea is to develop people just ahead of when they need new skills or knowledge. Train too early and people forget. Train too late and mistakes or safety implications occur whilst people learn. An effective People Development Strategy will ensure that the changes a business needs to grow and be successful are linked to appropriate people development.
You may have heard the quote by Zig Ziglar “What’s worse than training your workers and losing them? Not training them and keeping them.” I would suggest that being a good steward of people is to train them regardless of whether you think they may move to a different job. People move to new jobs for many reasons, but the majority of them don’t leave because you have invested in developing them as better workers and people. Besides, people development makes for a better community as a whole and therefore will be better for your business.