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Do You Treat Employees Like Capital?

Thursday, September 24, 2020



Senior Managers heading a large staff often spend a great deal of time calculating various figures for workplace productivity, such as hours spent per project, employee efficiency, and the overall bottom-line of finished work each team member produces. Although these variables can reveal areas for needed improvement within an organization, they can also cause a major problem in large corporations and institutions.

Strictly speaking, when a Senior Manager is constantly hyper-focused on analyzing organizational charts and streamlining workers to their utmost capacity, he or she can have the tendency to start thinking of staff members in terms of physical capital. Defined as “tangible, man-made goods,” physical capital includes business resources like machines, office supplies, technology, and other inanimate assets.[1] Humans do not belong in this category, yet when managers only see their subordinates as names and percentages in their spreadsheets, the idea that people are simply resources begins to take hold.

The issue with equating staff to a “resource” lies in how the phrasing frames your mind to consider people as materials. With physical capital—like a printer for instance—you are expected to dispose of it when it becomes inconvenient. You can continually send documents to a printer for eight straight hours, and because it is a machine, it will produce. If it is no longer able to turn out work at the rate you need it to, you get a new printer. Obviously, employees are not the same, nor should they be. People are complicated. Workers have days of extreme productivity, and others that are just not as fruitful. While calculating miles per gallon in your vehicle fleet is pretty straight forward, simple computations for worker efficiency will not account for the human factor in your workforce. That is not to say that your data will not point out detrimental inefficiencies; if Tom in Sales has been with your company for a year and has yet to close a deal, something probably needs to change. However, when a manager lets these calculations become too important, the business runs the risk of appearing militant, and you will eventually begin losing talent as a result.

Productivity is important for any company or organization, but it should not be the sole consideration when assessing the value of your team members. When your employees have the ability to take pride in their good days and feel secure in their bad, you will create a confident and goal-oriented workforce. Treating your staff like capital dissuades efficiency every time.



[1] https://www.investopedia.com/terms/p/physical-capital.asp