Human capital refers to specific employee characteristics that can make a business successful. Traditionally, industrial-organizational psychologists have used the acronym KSAO, which stands for knowledge, skills, abilities, and other relevant characteristics, to classify an employee’s work-related capabilities. When these KSAOs are useful for organizations’ overall economic outcomes, they are considered human capital.
Organizations often use sophisticated selection systems, or elaborate training programs to make sure their employees have the right type of human capital that can make them economically successful. But just because the employees have the “right stuff,” does not mean that business outcomes are determined. Organizations also must find ways to harness the power of their human capital and get the most out of it. For example, if an organization pushes employees to work harder, it might think that it is spending more of its human capital—getting more bang for its buck.
HUMAN CAPITAL LEVERAGING STRATEGIES
Researchers are aware of the tendency for organizations to try to squeeze more out of its employees, and ostensibly get more out of its human capital. They call these efforts human capital leveraging strategies. But do they work? An organization that pushes its employees to the extreme may be leveraging human capital, but is this really an effective strategy that will lead to better business outcomes? Researchers (Barnes, Jiang, & Lepak, 2015) have released a new model based on existing research studies that predicts what happens when organizations try to squeeze a little more out of their employees.
ARE EMPLOYEES GETTING ENOUGH SLEEP?
The authors discuss five different strategies that businesses use to get the most out of their human capital. While they agree that these strategies may initially enhance team performance and provide an initial boost in productivity, they caution that these same strategies may lead employees to get less sleep (in terms of time), and worse sleep (in terms of quality) at night. Sleeping problems are associated with many negative workplace outcomes, such as bad moods, “cyberloafing,” decreased productivity, and more unethical behavior.
These are the five strategies that may eventually lead to disrupting employee sleep:
- Extended shifts: With longer shifts, organizations get more labor out of their preexisting workforce. Longer shifts also mean less time off the job, and fewer hours to sleep. Long hours may also more readily contribute to irrecoverable exhaustion.
- Night shifts: When companies keep working through the night, they add to the hours of money making. Yet night shifts are notorious for disrupting circadian rhythms and employee sleep.
- Schedule instability: Organizations may rotate employee through different time shifts, especially if there are some shifts at undesirable times. These changes may help maximize working hours for the organization, but the changes can wreak havoc on employee sleep patterns.
- Norm for work over sleep: An organization might communicate the message that they value when their employees work long hours and forgo sleep. For example, an employee might be praised for work emails sent at 1am. Sleep will be compromised under these conditions.
- Norm for constant connectivity: Organizations might urge employees to be constantly connected to their work email or smartphone. Sleep will be compromised when work intrudes on an employee’s time off.
The authors expect all five of the above techniques to lead to short-term productivity. This is not surprising. After all, each of these techniques leads to employees working more hours and sacrificing their personal time. Any organization that works employees harder with disregard for their health and well-being will probably notice a quick uptick in business success. But in the long run, say the authors, this strategy is doomed to fail. Human capital is just as much “human” as it is “capital.” Organizations that do not consider how their policies affect the health and well-being of their employees will not be able to get the most out of these employees in the long run.
Barnes, C. M., Jiang, K., & Lepak, D. P. (2015). Sabotaging the Benefits of Our Own Human Capital: Work Unit Characteristics and Sleep. Journal of Applied Psychology, 101(2), 209-221.