Thanks for your well-thought out reply. Actually, I am closer to your position than you might think – particularly on the need for honesty in what HR and others say.

I’ll be posting another piece on this in the near future.

Don

The answer is that people are a cost and often a company’s biggest cost. This is why so many people are being made redundant just now.

It is also why I am much more comfortable with the concept of human capital – that people are an investment and probably the most important investment a company can make.

I was arguing that the RBS debacle has exposed the limitations of human capital reporting. It doesn’t matter how great the HC or HR system, if the boss makes an unfortunate decision, it can all be wrecked. I haven’t yet found any HR checks and balances that can prevent this.

I can understand why some persist in describing people as a company’s greatest asset – it sounds great and makes everyone, including HR, feel wanted. But it’s dishonest.

I’ve made some comments here:

http://strategic-hcm.blogspot.com/2008/12/human-vs-financial-capital.html

Jon.

I think it might be that some people read the word ‘greatest’ or ‘important’ as meaning valuable. I think an employee is an asset and of significant value to an organisation when their efforts and skills are aligned with the company who employs them. When however they are not, due either to poor management, poor recruitment, poor training or redirection of the company they can be of little value to the organisation but all the more important because of that.

As no organisation is perfect and they all have imperfect (in varying degrees) HR Strategies we are always going to find misaligned individuals or teams. In those circumstances whether these people can be defined as of value (to the company) is questionable though they are most definitively an asset which has become a liability in terms of a corporate item or balance sheet entry. And in today’s climate despite being an important asset they and we can very easily discover that we have become of little or negative value.

I accept the fundamental premise that people are the greatest asset an organisation has. I would just propose that that does not necessarily equate to value.