People are the pulse of any organization. Intimately linked to organizational health and lifespan, they directly influence whether success or failure prevails. So the question is: How can organizations manage their people to ensure success? The answer lies in human governance.
Human Governance vs. Corporate Governance
To understand human governance, we must explore corporate governance.
Corporate governance refers to the system – or rules, processes and practices – that dictates how the organization is operated, regulated and controlled. It influences how:
- organizational goals are set and achieved,
- risk is evaluated and monitored and
- performance is improved
Essentially, corporate governance exists to serve organizational goals.
Corporate governance without the human factor of governance results in a system driven purely by the need to accumulate wealth. People are viewed as basic resources for making a profit. They are not nurtured and valued. Instead, they are neglected or ignored – which is the antithesis of human governance.
In short, human governance is about being human. In short, human governance is about being human and part of being human is about having a conscience. This principle applies to businesses as well. While making a profit is important to organizational growth, it should not be pursued without consideration for employees, communities and society as a whole.
For good governance to occur, human governance must be incorporated into the company’s corporate governance policy.
The Role of HR in Human Governance
At the heart of effective human governance are strategies designed to bring out the best in employees. The burden of building and enforcing these strategies falls on HR, which has an allegiance not just to “the people,” but also to meeting organizational goals. To balance this dual responsibility, HR should focus on developing human governance goals that serve corporate governance objectives.
For example, when you hire the right talent and develop practices that promote employee engagement, two things happen: profits and employee satisfaction increase. But, when you focus solely on achieving profits, employees are likely to feel undervalued, leading to decreased productivity.
Human governance does not mean creating rules, policies and practices that blindly favor employees, society and everyone but the organization. It is also about ensuring that the organization is sustainable, which can be achieved by hiring and retaining people who engage in fruitful interactions with the company.
Practicing Human Governance
The path to human governance is complicated because it requires a deep understanding of human nature and a human capital management plan that considers:
- talent management, including performance and organizational development
- talent acquisition and employee retention
- employee recognition and rewards
- operational benchmarking to gauge employee productivity
- continuous human and organizational improvements
- HR technology that promotes human governance goals
Note that some of the responsibility of reaching human governance goals lies with the employee as well. For example, employees who insist on creating friction in the workplace are an impediment to proper human governance. HR must overcome such obstacles by enforcing hiring and retention practices that serve humanity and the bottom line.