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Douglas C. Wood


Why Employees Are NOT Your Most Important Asset

They’re not an asset at all.

Published: Wednesday, August 4, 2010 - 15:22

Almost all companies have a sign on a wall stating something similar to “Our employees are our most important asset.” The wording may be slightly altered, and “asset”’ may be replaced with “resource,” but usually there is such a sign posted somewhere on the premises. Regardless of the exact wording, the intent is the same: the organization is trying to say that it values its employees and the sign is a visible indicator of that value or belief.

As well intentioned as this statement is, problems can result from it. My objections don’t include accidental or planned duplicity on the part of the employer. I understand that employees may often feel that these signs only pay lip service to the belief and that their employer really doesn’t care about them. If this lip service is happening, it’s a significant problem and can create deep misgivings in the employees, which may lead to less-than-optimal behaviors. Any employer who thinks this is happening at their company would be prudent to address this issue by taking down the sign and working on employer-employee relationships. But let’s set this situation aside. It’s not the kind of fundamental problem to which I am referring.

The core issue centers on the meaning of the statement’s content. It places employees in a class with assets. Simply put, assets and people (let’s refer to the employees as people) are quite different on several levels.

First of all, assets don’t walk out if they are dissatisfied. Not that people quit jobs easily, but an asset never leaves. People do leave, given sufficient reason. This mobility is a strong indicator that people and assets are different.

On a more primary level, you can own an asset. No organization owns people anymore. There may be employees that have worked for a given employer since dirt was young, but that is still not ownership. People choose to stay and they choose to leave.

Perhaps this is too obvious, and certainly not what the employer meant when the sign was put up. I still think this undercurrent of perception is there; and many people may feel uneasy with the sign even if they understand that their employer has no intention of “owning” people. There is a discomfort with being equated with an owned object, even if it is well-meant.

Another reason the message is flawed involves the issue of creation. Assets don’t create; they modify (like a printing press) or shape (like a metal lathe.) They transform (like a computer) or direct (like an artificial intelligence software application), but assets don’t create something that was not there before. Creation is the territory of people.

Even if most of the time the people employed by a firm are modifiers, transformation workers, or direct the work of others, they do create some of the time. They think about what they are doing; and they create new procedures, new practices, new products, new services, and sometimes new businesses. This process of creation is going on all the time even in the worst of workplaces. It is this creative process that makes the company alter its shape, migrate with the market, fix new kinds of problems for customers, and finally survive and grow. There is no asset that can do this. The ideas that people imagine create new value out of thin air. People make new assets from nothing; assets do not make assets.

This characterization of employees as creators appears to be what the employer is trying to get at with the sign. Employers value their people, because without the people, the firm would not be.

By placing people and assets in the same basket, a sort of mental confusion begins and real problems can develop. People’s objections can be dismissed more easily, because they are in the class with assets (owned articles.) The ideas created by the people can be ignored more easily; the contributions of the “little people” can be forgotten. Supervisors may find it easier to tell their people that they should “just do the work” without complaint. These actions may be unconscious, but we have all seen them and their effects in the workplace.

Once started, these attitudes can grow. At the very least, it will take effort by senior executives to rectify such actions. There is a better way and it starts by placing people in their own, non-asset category. If categories are clear in the minds of everyone, little effort is needed to do the right thing. If the employees are never categorized as assets and are thought of as value creators, treating people well happens naturally.

Some employers use the word “resource” instead of “asset” on their signs. This softens the objections raised here, but it does not fully address them. A resource is a consumable item. Water, metal, and time are all resources. You use them up and they are gone. Today, there are very few jobs where a person is consumed in the act of working.

You can recycle resources in some cases, but they clearly belong to a class of “stuff.” People do not belong to the class of “stuff.” It’s time to quit using the categories of “things”’ or “stuff” to talk about the creative, dedicated, quality-minded people who work at our businesses. In this manner, we can move beyond the limitations that come from incorrect classifications, intended or accidental. Because people create assets, they are in a distinct class. Is there a better way to honor the contributions of people than to do this?

If we are not to call employees “assets” and are not to refer to them as “human capital,” what do we call them? Several terms come to mind: creators, idea integrators, value generators and many others; although the idea of coming up with one term to classify employees seems ridiculous to me. Whatever term you use, it can become a limiting factor on what they will accomplish. Employees are people and they represent such a broad and changeable class, calling them by any quick handle would be a difficult exercise. My current thought is to just call them “people” and leave it at that.


About The Author

Douglas C. Wood’s picture

Douglas C. Wood

As the managing member of DC Wood Consulting LLC, Douglas C. Wood offers consulting services in quality control, data analysis, and office productivity.


People as "Assets"

An asset is something that is used to provide some kind of "value" to a business. When the business determines that the expected "value" is not being provided the "asset" is then "disposed" of. Thus calling people "assets" or even "resources" implies that they are disposable.

The article sounds like a

The article sounds like a response to "Ten Simple Principles for Treating Employees as Assets" (Kenneth C. Levine and Peter J. Sherman).

Call us people? What a concept!

I've long believed that employers were trying to tell us something when they changed the "Personnel" department to "Human Resources". Next thing you know they'll refer to us as "liveware". I understand that at Southwest Airlines, they actually call it the "People" department and actually treat employees like people. I think it's working out pretty well for them.