Human Capital? Human Resources? Personnel? Does it matter?

Why did I call this blog ChiefHRO.com (for Chief Human Resources Officer) rather than something that uses the term “Human Capital?” After all, I was the Chief Human Capital Officer for the Department of Homeland Security. So why not use it? Simple – I really dislike the term “human capital.”

The Oxford English Dictionary defines “capital” as “Wealth in the form of money or other assets owned by a person or organization or available or contributed for a particular purpose such as starting a company or investing.”  “Resources” is defined as “a stock or supply of money, materials, staff, and other assets that can be drawn on by a person or organization in order to function effectively.”  Proponents of the “Human Capital” designation assert that Human Resources is an organization that provides services and “Human Capital” is strategic value of the people who do the work of the organization. They are not arguing against the people in organizations – in fact they are arguing that people are so critical to any organization’s success that they must be managed and treated as capital – the fundamental underpinning of any successful business. Unfortunately, I can not get past the “owned” part of the definition. Employees are not slaves or indentured servants – they are adults who choose to work for an organization. They are free to leave any time and often do. Your capital cannot decide to take a hike.

The evolution of names for people and organizations who do HR work (and for the work itself) always generates some controversy. Many years ago, they were Industrial Relations Offices. Then they became Personnel, the Human Resources, and then (at least in government) they became Human Capital. Even with all of the name changes, the basic work they did often was little changed. In fact, the name change were aspirational in many organizations. They wanted to be different and, more importantly, they wanted to be perceived differently. The sad fact is that changing your name doesn’t change what you do, who you are, or how you are perceived. I can change my name to Brad Pitt, but I don’t become a blonde, rich and famous movie star.

So is it really important to decide on a name for HR? I don’t think so. If you like Human Capital, by all means be a Human Capitalist. If you prefer HR, go for it. A few years ago, a friend who lead HR for an independent Federal agency changed her title to “Chief People Officer.” I think I like that one best of all, because it says in plain English what it is all about – People. Whatever you do, just recognize that organizations get nothing done without people, and people have minds and hearts and free will. Treat them badly and they can and will walk. Treat them with respect, give them opportunities to do good and interesting things, and they will make you successful. That’s what it (and this Blog) is all about.

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