Human capital 5th edition Sept 2016

HUMAN CAPITAL
The science of valuing people on
the balance sheet
Slavery is illegal. People are the greatest asset of the
business. Then how is the value of people, the
human capital value, recognized in the assets of the
business?
Graham Little

1
Human capital
The science of valuing people on the balance sheet
By
Graham Little PhD
Founder The Institute of Theoretical and Applied Social Sciences (ITASS)
Auckland, New Zealand info@opdcoach.com
LinkedIn profile www.linkedin.com/in/grahamrlittle
Original notes www.grlphilosophy.co.nz
Social Science Research Network author page http://ssrn.com/author=2572745
Business web site www.opdcoach.com
Contact info@opdcoach.com

2
Published by
Institute of Theoretical and Applied Social Sciences
Auckland New Zealand
info@opdcoach.com
A reaching for infinity book
Copyright © 2016 Graham Little
Fifth Edition September 2016
ISBN 978-1-877341-35-9
Graham Little asserts the moral right to be identified as the
author of this work.
All rights reserved. Except for purpose of fair reviewing,
no part of this publication may be reproduced or
transmitted in any form or by any means, electronic or
mechanical, including photocopying, recording, or any
information storage or retrieval system, now known or
hereafter invented, without permission in writing from the
publisher.
A catalogue record for this book is available from the
National Library of New Zealand

3
Contents
Executive Summary............................................................5
Definitions, references and intellectual foundation............7
Defining the question .......................................................13
Strategic science as the new standard of intellectual quality
..........................................................................................17
Organization design..........................................................25
OPD theory.......................................................................26
OPD-HCD™ ....................................................................32
The theory of psychology.................................................38
If OPD theory is fully science, can it ever fail? ...............41
Strategic human resource management (SHRM).............43
Definition of SHRM.........................................................49
Summary of SHRM under OPD theory ...........................53
OPD definition of human capital......................................55
The use of human capital value (HCV)............................58
Measuring human capital value........................................61
Training & development ..................................................75
Performance management ................................................77
The role of HR..................................................................78
Governance.......................................................................80
Change management ........................................................81
Definitions within OPD-Theory™...................................83

4
Human capital and society ...............................................88
Frequently asked questions ..............................................95

5
Executive Summary
OPD-Theory™1
is the only thoroughly scientific theory
of organizations, grounded on in-depth intellectual analysis.
It is derived from the only general theory of psychology2
itself derived from the revision of global social science3
.
OPD-HCD™ is the team leader practical technology4
derived from OPD-Theory™5
.
OPD positions HRM as the key driver of business results6
and is a direct link between daily citizen work behaviour
and the national economy7
. As such it offers the potential to
improve organization EBIT, improve staff work fulfilment,
1
The trade mark is not registered, it refers to organization, human capital
development, strategic human resource management, with the OPD overall
system of thought. Largely elaborated in writing of the author, Social Science
Research Network author page, www.ssrn.com/author=2572745 and the posts
and essays at the linked profile, www.linked.ocm/in/grahamrlittle.
2
Little, Graham Richard, The Origin of Consciousness (July 26, 2016). The
Origin of Consciousness, Institute of Theoretical and Applied Social Science,
New Zealand, Sixth edition, March 2016. Available at SSRN:
http://ssrn.com/abstract=2814742
3
Ibid. ‘Origin’.
4
Brochure attached.
5
Little, Graham Richard, Organization Design: Linking Mind to Its Agreed
Organization Role as a Foundation of Economics (July 31, 2016). Available at
SSRN: http://ssrn.com/abstract=2816604
6
Little, Graham Richard, The Mind of the CEO (September 1, 2016). Institute of
Theoretical and Applied Social Science, Auckland New Zealand, Fifth Edition,
August 2016. Available at SSRN: http://ssrn.com/abstract=2833571
7
Little, Graham Richard, The Exciting Promise of Human Resource Management
(HRM) (August 7, 2016). Available at SSRN:

6
lift the status of HR in organization leadership, and lift
status of HR in social development and political economic
management.
Crucial principle in epistemology is to understand the
necessary depth of intellectual analysis. Strategic science:
That the discussion of any topic is bounded by what is
known of the issues underlying the topic.
From this comprehensive intellectual foundation is
derived the exact nature of human capital in the
organization.
Dynamic human capital value, in the skills and judgment
of people.
Standing human capital value, in the precision and
aptness of the definition of the behavioural structure
relative to strategy.
Both types of human capital value can be measured in
capital asset.
Only standing capital value belongs to the organization
and may be capitalised on the balance sheet.

7
Definitions, references and intellectual
foundation.
Preliminary definitions
OPD theory: the organization design theory derived from
the revision of social science methodology8
. Refer the paper
Organization Design in SSRN9
.
OPD-HCD™: The organization design and operation
technology derived from OPD theory10
. The trade mark is
not registered, and signifies human capital development
within OPD theory.
Foundation references to all points and argument
All comment in this book is founded on the research and
theory creation of the author, researched details of any
comment can be found at the Social Science Research
Network author page, www.ssrn.com/author=2572745, and
the essays, books and posts at the LinkedIn profile,
www.linkedin.com/in/grahamrlittle.
For a full discussion on OPD-HCD™ refer to the book:
Little, Graham Richard, Executive Pocket Guidebook
8
Little, Graham Richard, The Origin of Consciousness (July 26, 2016). The
Origin of Consciousness, Institute of Theoretical and Applied Social Science,
New Zealand, Sixth edition, March 2016. Available at SSRN:
9
10 www.opdcoach.com.

8
(December 12, 2016). Available at SSRN:
https://ssrn.com/abstract=2883985
Intellectual foundation
• Essential intellectual position, refer Little, Graham
Richard, Through the Glass Darkly (July 19, 2016).
Available at SSRN:
http://ssrn.com/abstract=2811861 and Little, Graham
Richard, Redefining Science as the Social Extension
of Human Nature: A New Intellectual Position
Derived from the Proposition that We Can Only
Interact with Perceptual Fields (November 27, 2016).
Available at SSRN:
https://ssrn.com/abstract=2876338
• Applying the essential intellectual position to
redefine the methodology of social science and to
build the first scientific general theory of psychology,
Little, Graham Richard, The Origin of Consciousness
(July 26, 2016). Institute of Theoretical and Applied
Social Science, New Zealand, Sixth edition, March
2016. Available at SSRN:
• OPD-Theory™.
o Complete theory linking people to the
organization, and underlying the construction
of organizations. Refer, Little, Graham
Richard, The Exciting Promise of Human
Resource Management (HRM) (August 7,

9
2016). Available at SSRN:
http://ssrn.com/abstract=2819810 and, Little,
Graham Richard, Organization Design:
Linking Mind to Its Agreed Organization Role
as a Foundation of Economics (July 31, 2016).
Available at SSRN:
o The foundation of the national economy
linking daily citizen conduct to economic
success, community health and personal
fulfilment. Refer: Little, Graham Richard,
Why Work (July 19, 2016). Available at
• OPD-HCD™ the human capital development team
leadership technology (table 1). Refer,
www.opdcoach.com.
Practical application.
• OPD-Theory™ is after the ‘entrepreneurial’
decision, that is after the strategy is determined, the
system enabling complete, apt and accurate rollout of
strategy.
• OPD-HCD™. There are nine team leadership
processes (see table 1).
• The nine factors are the only factors a team leader
need develop with a person in order for that person to
have greatest chance of greatest work success.

10
• The cultural audit in the team assesses the
effectiveness with which the team leader applies the
processes of OPD-HCD™, and guides the team
leader decide what action to take to develop the
performance of team members.
• Applying OPD-Theory™ across the organization
changes every aspect of how HR fits and is applied
across the organization.
• Learning the nine team leader factors is like learning
to ride a bike, awkward at first, but then becomes
simple and second nature, once learned always
remembered, always applicable.
Payback
• The final scientifically valid set of processes for roll
out of strategy. Complete, requires no additional HR
processes or structures. Simple, once learned. Fully
supported by OPD International.
• Thorough application of OPD-HCD™ means that
should the strategy fail, it is due the strategic
decision, and not due team effort.
• The only scientific and accurate direct link between
the mind of staff and actions arising from within that
mind, and the profit and loss of the business.
• Emergence of a professional culture exhibiting
greatest commitment and engagement.

11
• Development of people satisfied and fulfilled in their
work life, enjoying their time at work.
• Increased EBIT, depending on the existing profit to
sales ratio, profits increased by 30%-60%.
For background reading and intellectual depth, refer Social
Science Research Network author page:
www.ssrn.com/author=2572745 and refer books and papers
at the LinkedIn profile, www.linkedin.com/in/grahamrlittle.
Summary point of Human Capital
That the sum of all the role specifications, the set of ideal
actions underlying any strategy, defined as the behavioral
structure, specifies the ‘perfect game plans’ that if perfectly
acted out enables the greatest chance of greatest success.
The aptness and accuracy of the behavioral structure
reflects the skill and investment of the leadership in
precisely defining what the organization needs to succeed.
Specification of the behavioral structure is owned by the
organization. Therefore, the cost in actual dollars and the
investment of time by leadership is reflected in the quality
of the written behavioral structure and is an investment
reflecting the importance attributed by the leadership of the
human capital of the business. Given the time and effort that
went into the definition of the behavioral structure, it is then
assumed that similar time and investment will invested in
guiding the careful defined behavioral structure is acted out:
Perfect game plans perfectly delivered.

12
Therefore, the balance sheet value of human capital is
accepted as reflecting the value of people to the
organization.

13
Defining the question
Capital: of or relating to capital; especially: relating
to or being assets that add to the long-term net worth
of a corporation.
Human: of, relating to, or characteristic of humans:
Typical of people. (Definitions from Merriam-Webster Online
Dictionary.)
What emerges from the common definition of the two
terms is that there exists an aspect of people that can be
represented as ‘capital’ in the assets of an organization.
Further, since capital in organizations contributes to the
performance of that organization then it follows that the
idea of ‘human capital’ also contributes to the results.
The idea of human capital is that the contribution of
people to the organization can be quantified as an
organization asset.
This much is ‘sort of’ understood and accepted. I say ‘sort
of’ because of the ease we slip from these very loose notions
into thinking we can deal with something that is concrete
and particular, when in fact we cannot. There is a major
problem.
Slavery is abolished in all civilized communities.
Therefore, no organization can own people. It follows
that if human capital is to be a valid term it must refer to
some ‘aspect of people’ it cannot refer to the whole person
since that would imply slavery. The problem is

14
compounded by the fact that people come in indivisible
complete units. For example, an organization is not able to
own just the skills of a person, since to enjoy the benefit of
the skills the whole person must be present. Therefore, to
‘own’ just the skills again implies slavery, which is illegal.
We are left with two issues:
1. What exact ‘aspect of people’ does an organization
own? Further, what exactly does the term ‘aspect of
people’ mean? Since if no ‘aspect of people’ can be
owned by the organization then the term ‘human
capital’ is a misleading generalization that needs to be
dropped from management and economic vocabulary.
2. In what way does that ‘aspect of people’ contribute to
the improved performance of the organization?
Now, we have the questions clear. We must be able to
define ‘human capital’ in such a way that it meets the
criteria above or if we are not able to do that then we must
modify our use of the term.
There are valid economic alternatives. For example,
people may ‘own’ themselves. It follows that in any
specified society, then the people in that society ‘owns’ the
human capital of that society. Any organization operating
in the society can then rent in purely economic terms the
human capital of society.
This relationship between ‘human capital in society’ and
the ‘organization’ are similar to an organization renting

15
office space. Any improvement, for example, is not
capitalized especially if any clause in the lease states that
such improvement is to remain when the organization
vacates. In the case of human capital, the renting
relationship is reversed, and it is the person who has the
right to vacate the organization. The organization is only
able to exert demands on the person while they accept the
rental arrangement and remain employed or under contract.
This rental analysis appears simple, but it is not. An
organization renting people from society implies the person
and the organization are separate. This leaves the difficult
question of what exactly is ‘it’ that is doing the renting?
What is an organization if it is something separate from the
people?
We cannot naively assume the organization is the same
as people.
All this may seem intellectual and outside the scope of a
practical manager seeking results. But it all relates to and
intimately entwined with an everyday garden variety
management term such as ‘human capital’.
It is accepted that better science builds better engineering
and hence build better bridges, airplanes, computers,
washing machines etc. The question is, ‘If we clarify and
make more precise that which we understand are we given
the opportunity to act more effectively?’
The answer of course is an unqualified ‘Yes’.

16
Our ability to do things more effectively and with greater
speed and precision depends on our clarity and insight. The
longevity of our clarity and insight depends on the depth of
our understanding and the soundness of our base thinking.
Management, leadership and organizations are aspects of
social science. As a result, they must be approached with
the same attention to detail, clarity and refined definition as
any other aspect of science if we intend to find better insight
and understanding. We are then able to act with greater
precision and effectiveness.

17
Strategic science as the new standard of
intellectual quality11
It may seem unusual to discuss questions of epistemology
in a book devoted to human capital in business. But, to
understand OPD theory it is essential to understand why the
intellectual issues track back so far as so invoke
consideration of the nature and understanding of cause in
science.
The science of people is social science, therefore
discussions on any and all management and organizations
that do not relate back to the core ground of social science
must be regarded with skepticism.
It is essential to have the correct tools: I was salt water
fly fishing in the Bay of Islands New Zealand, by the
famous ‘hole in the rock’. The fish school was huge, several
hundred meters in every direction. I was catching a fish
every second cast. I was catching five Kawhai to one
Trevally using a small silicon fly with a wiggly tail. As I
fished the tail got eaten off and became just the silicon stub
on the hook. Then the ratio changed and I began to catch
five Trevally to one Kawhai. A quite subtle change in the
tool reversed the ratio of fish being caught. I learned a lot
about salt water fly fishing that day.
To do the job properly you need the right tool. This
11
Ibid. ‘Organizational design. Also, ‘Origin’.

18
applies in intellectual endeavor as much as in fishing. The
tools used are the ultimate and immediate effects of W Ross
Ashby12
, and the process of primary operations.
The Ashby tools are intellectual tools applied to the
analysis of ‘systems’, Ashby himself applied them to
identify the fundamental structure of adaptive behavior in
Design for a Brain, the origin of adaptive behavior. The
tools produce what I call Ashby diagrams consisting of
variables linked in the manner one variable has an effect on
another. The process is definite, clear, simple and objective,
with a precise link between ‘theory’ and any actual
situation.
For example, the theory of a simple pendulum at sea level
is T=K√L, time of period equals square root of the length.
This can be written as an Ashby diagram L→T, that is
change the length and the period changes. The Ashby
diagram can be converted into an equation and vice versa.
To determine the period of any actual pendulum, in
Dubai or New York or London, one must go to the place
measure the length and place the data in the theory.
All Ashby diagrams are theory relating how variables
that describe any system relate one to another. All Ashby
diagrams have the exact same relationship with all actual
empirical circumstances.
12
Ibid. ‘Origin’ for full discussion on social science methodology.

19
All theory can only describe which variables to measure
and how to relate one variable to another so that we can
calculate the answer.
Reproducible understanding needs to be causal: If our
theories are to provide managers with tools that work every
time, then they need to be causal13
. If not, then we can have
no confidence that when we apply the theory it will work.
These significant intellectual complexities will not be
explored in-depth this paper which is dedicated to the
consequences of this in-depth intellectual understanding.
Having said that, the ideas in this paper are ethically
constructed therefore have intellectual integrity, which
means all in-depth issues related to or potentially able to
influence understanding of the issues discussed in this paper
are fully accounted for. That is, the strategic scientific issues
underlying this work have been all accounted for, all first
things have been done first. This standard of scientific
endeavour is significantly beyond the standard of ‘peer
review’ so popular in assessing the quality of intellectual
and scientific effort, despite significant studies that
conclusively show peer review is an unreliable standard.
Popperian falsifiability is not an absolute, but if any system
claiming to protect the integrity of our intellectual
endeavours consistently fails to do so, we need take great
care in continuing to rely such a standard.
13
Ibid. ‘Origin’ for full discussion on a theory of causality.

20
Precisely the standard of strategic science is ‘discussion
of any topic must be bounded by what is known of the issues
prior to, but able to impact, the topic’. So if any issue exists
that could if resolved influence discussion on the topic, this
then bounds what may be said on the topic if one intends
the discussion to meet standards of strategic science. If any
issue that could if resolved influence the discussion on the
topic, and that issue remains unresolved, then to retain
integrity this must be declared at the start of the discussion.
So for instance, the declaration could take the form … in
this discussion on … (such and such) … issues … (A, B and
C) … remain unresolved. If resolved such resolution could
influence the discussion. Therefore, in the absence of such
resolution we speculate that…
To understand the issue of strategic science, or first
things first14
:
• Imagine a business plan for a new product launch.
• Now, imagine it did not include any market analysis.
Clearly this would have an impact on the plan. And to
do first things first it needs to be included. So we can
now grasp what it means when we say ‘discussion on
any topic must be bounded by what is known of the
issues prior to the topic that when resolved would
influence the topic. The business plan on a new
product without consideration of the market is loose
14
For a full discussion refer ‘Origin’, page 339.

21
and cannot be taken seriously.
• But the regress does not stop there… what is the
pricing of competitive product. Imagine it very much
less expensive that our proposed product. Is outs over
engineered? Do people really require the quality
design as put forward by our engineers? So, first
things first carry us back further.
• And further… do we have the equipment to engineer
then manufacture down to the user requirements…?
As a result of drilling back into the issues, should we
be entering this market at all?
This type of drilling back applies in all endeavours… it
is exactly as building a house, if you do not get the
foundations right then watch later in the first serious
storm…The principle applies in science, and in all
intellectual endeavour as much as it applies in business.
Discussion in the historical literature have proceeded
with no theory of causality, no general theory of
psychology, no general theory of knowledge nested in a
general theory of psychology, and with no clarity on the
tools and methodology which enables a clearly defined
theory separate from empirical data pertaining to that
theory15
. While various attempts have been made to define
15
Little, Graham Richard, Through the Glass Darkly (July 19, 2016). Available at
SSRN: http://ssrn.com/abstract=2811861 (Note: Submitted, but not yet
accepted).

22
those topics, those attempts have not been successful. And
frequently discussion on topics have continued without
reference to the lack of understanding of underlying
intellectual issues.
The consequence of applying this standard is to
invalidate due inadequate intellectual standards much of
historical discussion in social science literature, including
economics, sociology, psychology, and management. At
very least such discussion where the standard of strategic
science has been ignored must be reconsidered in the light
of this rigorous standard of strategic science. For example,
the work of Marx, Adam Smith, Durkheim, Freud, Jung,
Skinner all need be used carefully and sparingly… volume
of work, and popularity of works is not a measure of the
quality of the work16
. Such application of this new standard
to historical work is perhaps unfair, but necessary if we are
to apply rules of engagement to protect the quality and
integrity of our intellectual endeavour.
People produce organizations, they are NOT independent
of people in the manner of a tree or a photon. There is
Reality, the external world, and reality independent of us,
the perceptual field generator17
, and reality our
16
See the 2005 paper, Toward a better standard of judgment than peer review.
http://www.grlphilosophy.co.nz/BetterStandardofJudgement.htm also, the
appendix in ‘Origin’.
17
Ibid. ‘Glass’ paper.

23
psychological image of Reality18
.
We act, or we orientate ourselves to Reality assuming our
reality is congruent with Reality. This assumption can be
wrong in two ways, first Reality may be generating a
perceptual field that in interaction with our sensory
preceptors may lead us to draw the wrong conclusions (clear
air white out, Ganzfeld, and virtual reality)19
. Second, we
may have ideas which do not accurately relate to the
Reality, and we project those ideas onto our immediate
perception and so misinterpret Reality building a reality that
is inconsistent with Reality20
. In short, we misjudge Reality
and make mistakes in our orientation to it.
The methodology, and in particular first things first of
strategic science21
, forces back to very fundamental
questions. An organization exists independent of people
therefore:
• What is the internal structure of an organization?
• What is the internal structure of a person?
• How does the organization link to people and vice
versa so that we can understand how to get consistent
18 Ibid. ‘Origin’ for a comprehensive discussion on the existence of the external
world and definitions of Reality and reality.
19 Ibid. ‘Origin’
20 Ibid. ‘Glass’ paper.
21 Please understand I refer to it as ‘strategic science’. But the principle of first
things first applies to all types of endeavor, and all types of intellectual
endeavor. Hence is perhaps best referred to a ‘strategic effort’.

24
high level of human performance, and within the
theory gain insight into the nature of ’human capital’?
• How exactly do organizations emerge from with the
causal factors in the system person in their
environment?
• What exactly is the link between the organization and
the mind of the person?
• What exactly is mind?
• If we ‘see’ via ideas, what exactly is an idea, how
does it exist, and how does it influence what we do?
I could go on… but I will not and hope I have made the
point.
In short, due the rule of strategic effort, all historical
discussion on organizations must be viewed with caution,
and regarded as tentative, subject to the dictates of a causal
general theory of psychology giving rise to a theory of
organizations. All discussion of OPD theory has bought to
account all prior issues and is thus ethically constructed and
has intellectual integrity22
.
22
Ibid. ‘Origin’ for a full discussion and definitions of ethically constructed, and
intellectual integrity.

25
Organization design23
Organization design is a new aspect of organization study
that has arisen due linking the organization to individual
psychology and the direct link it enables between daily staff
behaviour to organization strategy, which in turn is linked
to the national economy. Traditional global best practice of
HR and organizational development does not achieve that
link, or does so due only fortunate accident.
Thus organization design refers specifically to the
scientific details24
of the solution to the first Ashby equation
in linking the daily activity of a person to the national
economy, SHRMsuccess→ organization success25
. Should
the person deliver to standard the actions identified in the
organization design link, then that person can be said to
have ‘done their bit’ in contributing to the organization
achieving its strategy (refer to Why Work for further
discussion).
I suggest the term organization design be a restricted
very precise term referring specifically to the foundation
23
Ibid. ‘Organization design’.
24
Scientific details must include all aspects of resolving prior issues, such the
resolution is reproducible and consistent. Such reliability and consistency is
the core of the difference between this scientific approach to all other available
approaches.
25
Little, Graham Richard, Why Work (July 19, 2016). Available at SSRN:

26
issue of identifying the scientifically26
valid direct and clear
link between a mind and the strategy of the business. I
suggest this because of the significance of this link as a
foundation of western democracy free market economics.
OPD-HCD™ is the only system of organization design
available globally. Given the depth of intellectual
foundation of OPD-HCD™, it is difficult to imagine that
the link between individual mind and the organization
strategy can be constructed in any other way27
.
OPD theory28
Organizations are created to realize a common end called
strategy.
Imagine a collection of minds, each separate and unique;
each person likely to act according to their own interests and
desires. Now, imagine the group aiming to achieve a
common goal. It is the common goal that turns a ‘group’
into an ‘organization’.
Organizations consist of jobs with each job being defined
by the goals expected to be achieved with each goal derived
from the strategy.
26
The standard implied by the term ‘scientific’ is the standard of strategic science
involving resolution of all first issues. This standard is significantly higher
than the standard of peer review. This is discussed in the paper.
27
As with all science, a better theory is always possible, and would replace OPD-
HCD™ if it meets the quality and methodological standards.
28
Ibid. ‘Organization design’.

27
Then due the goal-action principle, underlying every goal
(KPI) are ideal actions. The set of ideal actions referred to
the behavioral best practice structure (behavioral structure).
Leadership judgment determines what needs to be done
beginning with strategy then leadership effectiveness
guides it to be done. The processes derived from the concept
delivers higher levels of human performance than enabled
by any other process.
In a group each mind is separate, diverse, and unique. No
integration. Now imagine each mind ‘sees’ a task relative to
the common goal and then ‘see’ each person with a different
task relative to the goal.
By each doing that which each is assigned the goal is
achieved. The start, the very first step, is to ensure what each
person needs to do is clear and coordinated with the actions
of every other person.
Leadership judgment is the act by the leadership structure
of conceptualizing what needs to be done in each role to
enable the greatest chance of greatest strategic success.
Once it is clear what needs to be done, then the task is to
oversee it gets done.
Leadership effectiveness is guiding each mind to see
clearly what they need to do in their assigned roles so the
ideal actions in the role are acted out with more precision.
OPD-SHRM harnesses human performance to the benefit
of the organization.

28
OPD as the harness guides and directs performance, but
as the harness it can blunt performance. Imagine a husky
dog sled, two lines of dogs, each behind the other. Now,
what is the view like of each dog except the lead dog…?
People need balance between the disciplines of achieving
the future goal and enjoying the trip now. It is an important
aspect of leadership to keep the balance between discipline
and fun.
OPD theory is the view of organizations arising from the
general theory of psychology created from the redesigned
methodology of social science29
summarised in the
following propositions.
1. Ideas are causal factors in human mood and conduct
(refer ‘Origin’). The fundamental of human nature is
to create ideas and apply them in survival, the
intensity of the impact of any ideas determined by the
intensity of emotions associated with the idea30
. In
order for this to be human nature then the body-mind
problem must be fully resolved, with detailed analysis
of how ideas exist and how they impact people. To
build the general theory of psychology there had to be
29 Little, Graham Richard, The Origin of Consciousness (July 26, 2016).
Available at SSRN: http://ssrn.com/abstract=2814742 (Note: Submitted,
awaiting final approval.) Referred to as ‘Origin’.
30 There is also the factor of the human spirit, but emotions associated with ideas
are a reasonable initial correlation with the intensity with which an ideas
impact an individual. Refer ‘Origin’ for further discussion.

29
transparent methodology and intellectual tools to
enable an appropriate intellectual structure31
.
2. An organization is an idea that shapes human mood
and conduct32
. This definition is not possible without
the fundamental analysis in the opening proposition.
3. From Popper, ideas expressed in a form that carries
the idea beyond the mind of the originator have an
existence of their own (Karl Popper, Worlds II and
III).
4. All objects that exist in their own right have an
internal structure33
. Therefore, organizations have an
internal structure independent of the people who
populate the organization.
5. All organizations are formed by the founders and
carry the implicit purpose of those founders34
. And
while organizations may fail, the normative operating
assumptions within OPD theory is that the inherent
purpose of the founders is for the organization to
31 See ‘Origin’ for extended discussion on resolution of the body-mind problem
and on both the formation of ideas and the manner in which they causally
influence people. Also, see the paper, Through the glass darkly for a summary
discussion of the influence of ideas on people.
32 In ‘Origin’, human nature is defined as the capacity to create ideas and apply
them in survival. ‘Organization’ is one such idea that humanity found useful in
its survival and development. See ‘Origin’ for more detailed discussion.
33
The current exception would be a photon. However, the validity of that
assumption is challenged in ‘Origin’.
34
Initially written up in 2003, and published at the personal web site as People and
Profits. http://www.grlphilosophy.co.nz/People_and_profits.pdf

30
succeed, not fail.
6. The explicit purpose of the organization, its raison
d’etre, is expressed in its current strategic intent35
.
7. Since organizations exist, and people exist, there has
to be a relationship between them, linking one to the
other. The proposition is that better science builds
better technology that leads to better results, therefore
if the relationship between people and the
organization is clarified using better science, that will
enable better technology which will enable better
management of people in the organization and
produce better results from the point of view of the
organization and for people. OPD-HCD™ is thus the
technology arising from OPD theory as enabling
better management of the link between a mind and the
organization.
This fundamental theory of organizations is not possible
without being able to define an organization as an ‘idea’.
And ideas are not possible without a fundamental general
theory of psychology within which ideas are a prime causal
factor in human activity, and that is not possible without
clarity on such issues as causality, reflexive links between
knowledge, causality and a general theory of psychology,
35
Further discussion of the relationship between strategy and a role specification
goes beyond the intent of this paper. Suffice, that the organization design must
act as a ‘funnel’ so when people look to the goals they are assigned in their
role, they can ‘see’ their contribution to the strategy and ‘see’ it precisely in
the form of ideal actions.

31
understanding of ideas and how they exist in mind related
to brain36
etc.
36
Discussed in the article posted at LinkedIn, Do our genes determine who we
are? https://www.linkedin.com/pulse/20140928233534-7640385-do-our-
genes-determine-who-we-are?trk=mp-reader-card

32
OPD-HCD™37
OPD-HCD™ begins with the strategy of the organization
which is distributed through the organization in the goal
cascade and then into the ideal actions derived from the
goals and from implementing the business processes38
. The
trade mark is not registered, it defines that the human capital
development (HCD) processes are from within OPD theory
of organizations, and no other system or approach to
organizational design is implied or in fact used or referred
to.
OPD-HCD™ is the human capital development
technology arising from within OPD theory. It consists of
the following well-defined steps39
.
1. Goal-action principle.
For every goal there are actions (called ideal actions) that
must be delivered if the goal is to be achieved. Ideal actions
are of the quality that doing them does not guarantee
37
Ibid. ‘Organization design’ paper.
38
There are issues in setting up the team and role structure beginning with
strategy. This goes beyond the intent of this paper. Suffice, the organization
structure of teams and roles is the process of mapping the strategy onto its
target market. See the paper Goal setting is old hat. Why do we need KPIs?
For a discussion of the role of goals in coordinating the behavior of staff in a
common endeavor. https://www.linkedin.com/pulse/20140826215656-
7640385-goal-setting-is-old-hat-why-do-we-need-kpis?trk=mp-reader-card
39
For comprehensive discussion on OPD-HCD™ from multiple points of view
within the organization, refer to the material at the LinkedIn profile

33
success but not doing them guarantees failure. Ideal actions
offer greatest chance of greatest success.
2. Business strategy.
Strategy is a complex goal. In any accounting period,
strategy reduces to specific goals (KPIs) in each role. (A
role is a unique set of actions and attitudes. A job may
consist of several roles.)
3. Organization development.
Defining the role specification, namely the ideal actions
underlying each KPI including integration into business
process, philosophy and values. The complete set of role
specifications underlying a strategy is referred to as the
‘behavioural structure’ relative to the strategy.
The behavioural structure defines the ideal actions
needed to achieve results, namely if the behavioural
structure acted out to standard, then organisation strategy
has the greatest chance of greatest success40
.
4. Theory of psychology:
People act according to how they ‘see’ the circumstance
40
Organization design is the manner in which people are connected to the
organization, in this and previous papers I have shown this connection, when
scientific and precise, is the foundation of economics and a major aspect of
social development in our modern world. Organization design is NOT
organizational structure, which is the manner the strategy is mapped onto its
market, and is the reporting relationship between roles. The foundation of the
organization lies in organization design regardless of the nature of the
organizational structure.

34
with how they see it being a detail embedded within their
broader psyche. The intensity of action and feeling
determined by the emotions associated with the ideas used
to ‘see’ the situation. A game plan is how the person ‘sees’
some circumstance. A game plan consists of goals and ideas
of how to achieve the goals. Emotions associated with a
game plan determines the thrust, engagement and
performance of the person in delivery of the game plan. This
underlying psychology is summarised in the equation
(focus + accuracy) + (engagement) = result. Focus plus
accuracy is clarity of goals in the role and the action that
offer greatest chance of greatest success in achieving those
goals. Engagement is the type and intensity of the emotion
associated with the ideas ‘what I do at work’, as defined in
the focus and accuracy. The game plan of the person is thus
the combination of ideation plus the emotions associated
with that ideation41
.
There are two aspects to ‘motivation’, which is
understood as positive energy associated with an idea
applied in seeing some situation. (1) Intrinsic motivation:
The person choosing not to let themselves down, to deliver
the agreed ideal actions to the best of their ability. (If the
person does not feel they have the skill, then the emotions
41
It is rather more complex in that the formula refers to each mental set as defined
in ‘Origin’. Thus the final mind set of the person may only partly arise from
these direct work psychic structures, and may also arise form closely
associated structures, such as if they have strong views on class conflicts, or on
profits, etc. Full details on implementation are beyond the scope of this paper.

35
will be tentative). (2) Team motivation: The team and team
leader ensuring the person having fun delivering the agreed
ideal actions42
.
Steps 1 -3 define management as the activity to ensure
behavioural structure clear and apt, expressed in the role
specifications defining every role.
Leadership is defined as linking the management effort
to the mind of the people. Leadership is to ensure every
person has a clear and focused game plan with which they
are positively engaged, committed to doing it, and is having
fun striving for perfect performance.
The effective blend of management and leadership result
in the organization having greatest chance of greatest
strategic success.
There are detailed analysis of implementing OPD-
HCD™ from the point of view of the CEO43
, the redesign
of all aspects of HR44
, the impact of OPD-HCD™ on team
42
For a more extended discussion on motivation from with the general theory of
psychology refer the paper Understanding and managing motivation.
https://www.linkedin.com/pulse/20140821050453-7640385-understanding-
and-managing-motivation?trk=mp-reader-card. And for a discussion on
translating that into company policy see the paper An integrated motivation
policy. https://www.linkedin.com/pulse/20140822025012-7640385-an-
integrated-motivation-policy?trk=mp-reader-card
43
Little, Graham Richard, The Mind of the CEO (September 1, 2016). Available
at SSRN: http://ssrn.com/abstract=2833571
44
The role of Human Resources in the Modern Organization
http://www.slideshare.net/Graylit/the-role-of-human-resources-in-the-modern-

36
leaders throughout the organization45
, analysis of the
technical details in rolling out of strategy, supported by the
insight that roll out of strategy is the same process as
performance management against the role specifications,
with both focused on the effectiveness with which the
behavioural structure is delivered46
. Finally, a detailed
discussion of human capital value within the firm, what it is
and the extent it can be capitalised in a balance sheet thus
proving a foundation of the economic value of staff in
organizations within the national economy.47
A diagram of the theory is below. And a summary
description at the web site: www.opdcoach.com.
organisation-wheelers-pdf and the newsletter, All proactive HR changes,
http://www.slideshare.net/Graylit/16-all-proactive-hr-changes
45
Modern Team Leadership, http://www.slideshare.net/Graylit/modern-team-
leadership-wheelers-pdf.
46
Little, Graham Richard, Rollout: Improving Rollout of Business Strategy
(September 6, 2016). Available at SSRN: http://ssrn.com/abstract=2835794
47 Note, all books are free in PDF, available from the LinkedIn profile, with some
available at the Social Science Research Network, author page
http://ssrn.com/author=2572745

37
Strategy
Team
structure,rolesin
Idealactionstoachievegoals
Goals,KPIs
OPD-SHRMIS
Monitoringteam
leader
implementation
ofOPD-SHRM
processes
Psychological
targets
Leadershipactions1
Setuparchitecture
Leadershipactions2
Buildperformanceculture
Leadershipactions3
Maintainsuperior
performance
Engagement
Clarityofgoals,
KPIs.
Visualizationofideal
actions.
Commitment
Personalchoice.
Professionalism.
Teamleadersupport.
Buildownframeof
professionalmind.
Buildframeof
referenceforwork.
Managecommunity
frameofreference.
TheOPDtheoryof
strategichumanresource
management

38
The theory of psychology48
The full analysis of the system ‘person in the
environment’ is in The Origin of Consciousness. The theory
of psychology that emerges is an Ashby diagram of a person
in the environment describing the variables that define the
system and the links between those variables. The theory of
adaptive behavior developed by Ashby is the basis for the
psychological theory but refined by myself to better
describe humans.
The points below are the relevant psychological points as
they apply to linking understanding of human psychology
to organizations.
a. If left to its own devices the energy flow in the brain
will seek the lowest available energy paths referred to
psychologically as habit. The distribution of the
lowest energy routes for neural energy in the brain is
called the ‘entropic state’ of the brain. The entropic
state of the brain is to the brain as a balance sheet is to
a company.
b. The mind operates in sub sections called mental sets
which have a cognitive component
(knowledge/ideas), an emotional component, and a
‘slant’ referred to as attitude. Within the theory mind
is defined by thought, emotion, and attitude.
48
Ibid. ‘Organization design’ and ‘Origin’.

39
c. Ideas are built by using language to classify events of
perception according to the properties of those events.
Once created, then the ideas are used to classify
subsequent events. Related ideas form linked mental
set structures within the psyche.
d. Knowledge is created and exists as a whole by
ordering ideas in relation to the topic. For example,
the five wise blind men describing an elephant, each
holding a different part of the elephant, so one
describes the elephant as long and thin with hair at the
end, another as solid, round and firmly on the
ground… etc. Each has a correct idea on the elephant,
but each limited, knowledge of the elephant lies in the
relation between all of the ideas.
e. Changes in a perceptual field generate changes in our
brain. The changes in our brain we interpret using
ideas and knowledge stored in our brain. This
perceptual process including interpretation leads to
the understanding ‘we see with our mind not our
eyes’. We can build a model of this psychological
structure by imagining as box of ‘frames’ behind our
eyes, we look through a frame and thereby interpret
what we see. The frame is a model of our psychology,
what is on a frame is the ideas we use to understand
and orientate ourselves to the world.
f. Self exists as a linked system of clearly defined
mental sets referred to collectively in the theory as ‘I’,
inverted commas intended.

40
g. ‘I’ is the seat of consciousness, self-esteem, spirit, and
free will. Our spirit exists within our brain which
exists within our body.
h. Free will is ‘I’ applying the attention mechanism to
alter the entropic state of brain to reroute flow of
neural energy in brain.
i. Only consciousness can choose a course of action
outside that immediately available to the system. Only
consciousness can make water go up hill and stay
there.
Summary of the cause of human mood and conduct
The brain operates on entropy which determines the set
lowest energy routes available. The entropic state of the
brain directs habit.
The mind is guided by choice. Only through our
conscious mind can we make happen the course of action
we choose.
The fundamental human condition is the tension between
conscious choice through attention and habit arising from
the operation of entropy in the brain.
The ethical position underlying OPD is that every person
has the right to choose, and due respect in that choice.

41
If OPD theory is fully science, can it ever fail?
There are two points of failure of the theory. OPD theory
posits all HR as after the strategic decisions, and the
proactive aspects of HR involve the roll out of strategy.
Thus OPD-HCD™ as the roll out of strategy may be done
fully and correctly, but if the strategy is poor, then the
business will still fail.
Failed architecture: OPD will fail if the goal cascade and
ideal actions derived from strategy are poorly conceived
or grouped to form a poor organizational structure. A
poor architecture will have people doing the wrong things
at the wrong times. It will result strategic failure. This is
fully leadership failure beginning at the top. A person at
the bottom of the organization may be delivering agreed
ideal actions to standard and with verve and commitment,
they are successful in their role, but the leadership has
guided them to do the wrong things and hence the results
are not achieved, but they cannot be blamed for the poor
result. This failure can be separated from poor choice of
strategy or of infrastructure tactics for realizing strategy,
by asking: Have people done the agreed ideal action to
standard? If so, responsibility for the failure rests with
governance and executive.
Failed choice: OPD will fail if people do not choose success
at work and fail to discipline themselves relative to the
agreed ideal actions and act out those actions when at
work. I suggest this failure is common to any system of

42
organizational design and operation. Failure of choice is
NOT a failure of leadership. Only the person has access
to their mind, only they can decide to act out ideal actions
or not. If they choose to not act out ideal actions because
of they do not like the team leader, this again is a choice.
Within the ‘Origin’ theory of psychology49
, the key
driver of all human activity is choice. The person and the
person alone is responsible for the choices they make, no
one else has access to their mind.
A key aspect of choice is the extent work behavior is a
fundamental driver of community health50
which means the
choice of individual and their professional commitment to
their work is an issue much, much broader than whether or
not they like their team leader or the company.
49
Ibid. ‘Origin’.
50
Ibid. “Why Work’.

43
Strategic human resource management (SHRM)
The current global received wisdom is that strategic
human resource management is about the link human
resources makes with strategy of the organization.
Within OPD theory, all human resource (HR)
considerations are after the strategic choice. HR issues
come to account in the strategic decision as costs, for
example, wage costs, recruiting cost and training cost often
estimated as one overall expense. More detailed
considerations may occur if for example there were serious
concerns at the availability of skills or even the availability
of people willing to work.
In OPD theory, HR is an operational issue involving the
roll out of strategy.
Considerations on the term ‘strategy’
It is sometimes assumed that there is only one strategy in
a business. However, this narrow approach is inconsistent
with the definition of the term and with what the term
implies51
.
Strategy is taken to mean the overall direction. Elsewhere
I have explored the term and the quantification of strategy
51
Private exchange at Unitec, Auckland New Zealand, where it was argued there
is just one strategy and terms like ‘sales strategy’ are misnomers.

44
in any given accounting period52
.
To ensure precision, I shall use the term strategy to apply
to any aspect of some plan where the term conveys the
direction, and then quantification of strategy is the detail of
how much of the direction will be realized in any specified
accounting period.
Therefore in pursuit of an overall business strategy it is
legitimate to consider sales strategy, operational strategy
and human resource strategy. The terms conveying that the
specified functions had definite directions and in any given
accounting period the strategy could be quantified to
specify how much to be achieved in that period.
These considerations mean that strategic human resource
management is a legitimate. But what exactly is it?
The nature of functional strategies
It is important to be aware of how we think. Sloppy
thinking leads to loose actions which lead to a result less
than we could have achieved if we had been more careful
with our thoughts. As said by Einstein, ‘We become what
we think most of the time’.
How exactly do we need to understand strategy as it
applies to HR?
In sales for example, we all understand it as the process
52
See discussion of details of OPD-HCD™ in the newsletters in the summary
section of the LinkedIn profile, www.linkedIn.com/in/grahamrlittle.

45
of introducing new people to the product and encouraging
them to buy. We understand the overall aim, but there are
many means whereby we may achieve the aim. The manner
we choose to implement sales is the direction we will take
in sales. It is intrinsic to sales, not an addition to sales … it
is the direction adopted within sales for achieving the sales
aim intrinsic to the overall corporate strategy.
The general point is that the strategy of any function is
intrinsic to the function, not an addition to the function. But
then what about HR?
The constraints on functional strategies
Imagine launching a new product into an English
speaking market with the brochure and advertising written
in Mandarin. Would you expect strong results? Hardly!
The general point is that the range of options in the
selection of any functional strategy, such as a sales strategy,
is limited by various constraints many of which are obvious
and even silly, like the example above, but none the less
real.
We can now ask a more general question, namely are
there any intellectual constraints that have been assumed or
overlooked in selection of strategies in HR?
Constraints on HR strategy
HR deals with people in organizations which I refer to as
‘authority systems’. The term authority does not merely
refer to human authority, but also to the demands on people

46
that they act consistent with the needs of the organization.
When engaged with the business of the organization people
are not free agents and are not able to act exactly as they
please. Therefore the organization itself exerts authority on
people, not merely people exerting authority on people.
Organizations are created by people who act within the
organization. There is a major social complexity here…this
complexity immediately implying all the issues raised and
considered in the derivation of the OPD theory. For
example:
a. Is the organization separate from people?
b. How does an organization exist?
c. If we are to analyze this social complexity what
intellectual tools do we have and what sort of
knowledge do those tools create?
d. Any analysis is necessarily an aspect of social science,
therefore are there any aspects of science that must be
bought into account before our analysis is valid?
e. If the organization is separate from people then what
is the internal structure of the organization?
f. And what is the link between the internal structure of
the organization and people?
g. How does this analysis of people in organizations then
relate to the economy and then to people in
communities?

47
The answer to any one of these questions will profoundly
impact the understanding and practice of HR in the
organization. These questions implicate considerations in
social science.
The nature and role of HR in organization can only be
clarified by resolution of these theoretical issues in social
science. Our full understanding of HR in business depends
on development of a scientific theory of HR which gives
rise to a set of HR processes.
The OPD theory arose by this exact process providing
clear and definitive links between the organisation and
people.
The conclusion is that the OPD theory defines a new and
more scientific link between people and the organization,
and these links enable a set of strategic HR processes that
enable improved management of human performance as a
strategic factor in results.
Conclusion on the constraints on HR strategy
HR strategy is severely constrained by a range of
complex intellectual factors not previously bought to
account.
The OPD theory is the resolution of the intellectual issues
which underlie HR strategy and leads to one and only one
intrinsic strategy for HR.
Within OPD theory, the activity of strategic human
resource management (SHRM) is to identify the behavioral

48
structure and guide its delivery. This activity is an intrinsic
aspect of HR arising from full understanding of the link
between the organization and people.
The activity of SHRM is the alignment of the actual
behavior of every person with those actions that offer
greatest chance of greatest strategic success. The roll out of
strategy is the responsibility of the CEO. The overseeing of
SHRM throughout the organization is delegated by the CEO
to HR Department in larger organizations, but the alignment
of actual behavior with ideal actions is the key HR focus of
all organizations.
Within OPD theory human resource management
separates into administration, essentially that which is done
now, and strategic human resource management, the
proactive aspect of HR that drives all organization
success53
.
53
Little, Graham Richard, The Exciting Promise of Human Resource Management
(HRM) (August 7, 2016). Available at SSRN:

49
Definition of SHRM
Within the OPD theory the aim of strategic human
resource management (SHRM) is the identification of the
behavioral structure of the organization and supporting
every team leader in achieving delivery of that behavioral
structure in every team role.
OPD-SHRM then refers to the set of HR tools that enable
the team leader and HR partner to achieve that aim.
Definition of SHRMIS
Strategic human resource management information
system (SHRMIS)54
is the capture of KPIs and ideal actions
in every role (behavioral best practice structure or
architecture).
SHRMIS is capturing of the behavioral best practice
structure in such a way as to make it readily accessible to
those expected to act it out. The SHRMIS system defines
the organizational architecture, and integrates key SHRM
factors such as cultural audits, customer satisfaction audits,
engagement, coaching and training, records performance
management, and working ‘in’ and ‘on’ the business.
54
Terminology can be SHRMIS or HCDIS, and where the HCD system is derived
from OPD, then OPD-HCDIS. A complete SHRMIS system records and
integrates HR actions. For example, cultural audits and customer satisfaction
audits, measure of Human Capital related to budget achievement, etc., for a
full overview of a OPD-HCDIS contact info@opdcoach.com.

50
HRIS only administers HR
Existing HRIS systems are all derived from the
administration of HR. There has been work done on
identifying aspects of the administrative data and how to use
that data to advance human performance and to increase
results. However, it is based on intellectual foundations that
are incomplete, uncoordinated, with many issues
unresolved. If we have a decision making process that is
flawed, then no amount of working harder with it can
surmount the flaws. We need change the system. So it is
with HR.
HRIS is without intellectual foundation and will always
be surpassed by any system based on theoretical
understanding that does not have the flaws and underlying
inadequacies.
SHRM as the proactive driver of success55
The OPD theory provides a clear and coordinated focus
of HR throughout the organization, with the HR function
separated into two components.
1. Administration of HR. The data secured can then be
analyzed to assist improved HR practice, but it is
55
Refer posts on HR as the driver of success at
www.LinkedIn.com/in/grahamrlittle. Also: Little, Graham Richard, The
Exciting Promise of Human Resource Management (HRM) (August 7, 2016).
Available at SSRN: http://ssrn.com/abstract=2819810 and other papers at
Author page: http://ssrn.com/author=2572745

51
intrinsically grounded on theory and models that are
not coordinated or lack definition and precision.
Administration continues what is currently accepted
as the function of HR, the current set of issues
surrounding compliance, unfair dismissal, leave
provisions, absenteeism, wages, contracts and
contract administration, collective agreements,
industrial relations, long service, retirement, pension
provisions, etc.
2. Strategic human resource management (SHRM): As
defined within OPD theory, partnering with team
leaders to proactively identify the behavioral structure
underlying the strategy then guiding delivery.
Integrated into SHRM are engagement, performance
management, cultural development, moments of
truth, management by walking around, coaching,
training, disciplining, rewarding both financially and
emotionally/psychologically, results, organizational
success and personal success.
The OPD definition of strategic human resource
management (SHRM) places HR processes at the very core
of successful roll out of strategy, which is at the core of
organizational success. This proactive role for HR
processes in driving organizational success is not delivered
by HR, but by team leaders. HR within this model is the
technical resource, the advisor, the partner to the team
leaders enabling them to apply the clear and systematic
The administration (1 above) is done by HR itself. None

52
of SHRM (2 above) is done by HR. To repeat, SHRM is
done by the team leaders, with HR as the technical advisor,
the internal consultant, an active and supportive partner.
The HR Department also administers/oversees SHRMIS
to improve standing human capital value. As a crucial
aspect of administration of the SHRMIS the HR department
provides regular reports and feedback from the audit
functions within the system on the delivery of the OPD-
SHRM processes in each team. SHRMIS reports are then
used by senior executives to provide feedback for team
leaders and ensure all the OPD-SHRM processes are being
fully implemented in all teams. This ensures the
organization has the greatest chance of greatest success.

53
Summary of SHRM under OPD theory
Strategic human resource management, OPD-SHRM™
56
:
= roll out of strategy;
= identifying and guiding delivery of the behavioral
structure relative to strategy for a specific accounting
period;
= proactive aspects of managing people in the
organization such as to enable achievement of the
organization results, satisfaction of people;
= managing the contribution of the organization to the
wealth and health of the community in which the
organization embedded;
= daily/weekly performance management relative to
goal achievement and people fulfilment and
satisfaction;
= enabling the organization the greatest chance of
greatest success;
= enabling the people greatest chance of greatest work
life satisfaction;
= enabling the community greatest chance of greatest
56

54
wealth;
= enabling the community greatest chance of greatest
health, as a community as and as individuals in the
community;
= achieving team member flow57
and fulfilment from
their work life;
= achieving team results.
Under OPD theory, an OPD-HCDIS system guides
application of the team leader processes and records all
necessary data on audits, team development plans and
result, as measured in audits, role specifications and
individual development of skills against the ideal actions,
records talent assessments, and regular performance
management. The HRIS system records the associated staff
administration of salaries, leave, sickness, absenteeism,
hours, etc.
Both OPD-HCDIS and HRIS are regarded as necessary.
57
Csikszentmihalyi, Mihaly (1990). Flow: The Psychology of Optimal
Experience. New York: Harper and Row. ISBN 0-06-092043-2

55
OPD definition of human capital
Once the ideal actions are agreed, with people choosing
to be successful and deliver them, then people are assuming
personal accountability for their actions at work, and to
significant degree accountability for their own motivation.
People are then held to account for the one thing they can
be held accountable for, namely their own conduct at work.
Defining success under OPD theory
There is no tension between personal and organizational
success. There is not issue of seeking ‘goal’ overlap the
‘organization’ and people both seek ‘success’.
Organizational success: Achieving the numbers.
Personal success: Delivery of ideal actions to standard.
The major difference between OPD and current HR
practice is that under OPD people are not accountable for
the goals and goal achievement. Nor even fully accountable
for the ideal actions which are decided by the person, the
team leader, and the team leader’s team leader.
In OPD it is ultimately the CEO who is accountable for
the roll out of strategy, hence it is the CEO who carries the
final responsibility of the definition of the behavioral
structure, but delegates the work of definition to the
leadership team supported by the HR department. .

56
Each person is accountable for how well they acted out
the ideal actions as agreed … if those action then fail to
deliver the results, but the person delivered them fully and
with commitment, then the person remains personally
successful and cannot be disciplined nor in any way
chastised. They did exactly that required of them.
Dynamic Human Capital
The competence of people makes a difference. Two
people, both sales people - one skilled, one not. The skilled
person will consistently achieve a better result than the
unskilled. This much is common sense and obvious.
But as we have already considered, slavery is illegal in
the civilized world, therefore the competence of people is
not able to be registered as an asset of the business. But
staff competence makes a difference. Therefore the quality
of staff competence is an important measure of human
capital.
The measure of staff competence under OPD theory is
called dynamic human capital. The qualification ‘dynamic’
makes clear the nature of the measure; it is not an
organizational asset, it is a rented asset and is ‘capital’ in the
same way that money from the bank is capital.
In the OPD cultural audits, dynamic human capital is
measured in the goal clarity (focus), clarity of ideal actions
(accuracy), commitment, and relationship with the team
leader. It is also measured in the extent the team leaders
apply the OPD-SHRM system.

57
Placing dynamic human capital on the balance sheet has
significant complications in that it is the asset (the person)
itself that can choose to leave. The organization has no
control over a person’s choice to leave. For this reason,
which is due the free will implicit in any human asset, it is
not recommended that dynamic human capital is shown on
any balance sheet and is best discussed as an important topic
in documents such as the annual report.
Standing human capital
The SHRMIS system captures the details of those actions
that offer the greatest chance of greatest success. This is
fully owned by the organization, it remains when people
come and go, and it reflects and captures the learning of the
organization over time, even decades.
For example, imagine a very good sales manager; they
were exceptional and very sharp. They helped define quite
exceptional insight into the ideal actions that guided sales
people to be more effective than any before.
Over fifteen years several sales managers came and went.
They all used the same ideal actions as the standard for their
teams and all were successful. All agreed it was a wonderful
helpful insight. Not only has the SHRMIS system captured
the way of doing it that offers the greatest chance of greatest
success, it captures for all to follow the insights of the best
of the leaders the organization ever recruits. It is truly
‘organization learning’.

58
Ownership of human capital
We can now answer the question asked in the first
section. The organization cannot own any ‘aspect of people’
but it can own the crucial definition of the behavioral
structure that offers people the opportunity for perfect
human performance. Specifically the organization owns the
SHRMIS.
The use of human capital value (HCV)
Human capital value measures the extent the leadership
have qualified the ideal actions underlying the strategy plus
the extent people are delivering those actions.
The first is called standing human capital the extent the
organization has defined the actions needed that offer the
greatest chance of greatest success.
Imagine a top sports team going onto the court with a
game plan that directs the overall pattern of play to deal with
the opponent. The better the game plan the greater the
chance the team will win. Standing human capital value is
an estimate of the quality of the game plan.
Dynamic human capital value measures the extent people
execute the game plan. To continue the sports analogy, the
better the game plan, and the better it is executed then the
greater the chance of success.
For any sports team, the more effectively it drafts the
game plan of what it needs to do to defeat the opponent, and
the more effectively the team deliver the game plan, then

59
the greater chance of success.
Within OPD theory: As in sport so too in business.
Standing human capital measures the quality of the game
plan. It follows that the clearer the organization is on its
game plan the greater the chance of having that game plan
enacted. Dynamic human capital is the measure of the
extent the game plan is delivered.
HCV measures future profitability
For any established business there is typically some
inherent momentum that will persist even after a mistake is
made. For example, a machining mistake can be absorbed
for some time by existing stocks and a customer service
mistake absorbed by customer good will. For this reason,
human capital value is a leading indicator of business
performance.
A fall in human capital value does not immediately
translate into a fall in results, but will eventually show up in
results.
An increase in the HCV is a leading indicator pointing to
improved future results.
The HCV of the business is a leading indicator of the
future profitability.
HCV does not measure the quality of the strategy
Within the OPD theory all HR management occurs after
the strategic decision. All aspects of HR are implicated only

60
in the roll out of strategy.
HCV does not measure the quality or aptness of the
original strategic decision. HCV only measures the
effectiveness with which human effort is harnessed in
pursuit of strategy.
It follows that a business with a high HCV score, but a
poor strategy, can still fail.
In psychological terms HCV measures the coordinated
discipline of staff in pursuit of the combined goal of
strategy. If the strategic direction is poorly selected, people
doing the wrong things, then no amount of discipline, no
matter how well people do those things, the business may
still fail.

61
Measuring human capital value
Human capital value (HCV) measures the effectiveness
with which the leadership has determined the actions
needed to ensure greatest chance of greatest success, plus
the extent the staff are delivering those actions.
The higher the human capital value the better the result.
A strategic human resources management information
system (SHRMIS) 58
captures the behavioral structure and
captures effort by team leaders in guiding delivery of that
structure.
Factors in standing human capital value
Standing human capital value (SHCV) is the starting
point to achieving strong results since SHCV measures the
definition of ‘perfect’ human performance to which the
organization aspires.
The factors assessed in the standing human capital value
are:
a. the quality of leadership judgment of the
organizational structure59
,
58
Currently the only SHRMIS system as defined by OPD theory is that supplied
by OPD International Limited: Further information available via
info@opdcoach.com.
59
Organizational structure maps the strategy onto the target market via teams and
roles in teams.

62
b. goal cascade60
,
c. Identification of ideal actions61
.
Standing human capital value, as stated earlier, does not
measure the quality of the strategy; standing human capital
value is solely focused on the effectiveness with which the
leadership conceptualizes rollout of strategy offering the
greatest chance of greatest success. Standing human capital
value is assessed by addressing the following questions.
1. Organizational structure.
1.1.How well does the organization structure cover the
target market?
1.2.How effective is integration/coordination between
teams in the structure?
1.3.How effective are business processes so that
activities and effort in one team is relayed to other
teams potentially impacted or able to use the
information?
1.4.How well coordinated is planning across the
structure?
1.5.How clear are roles within teams?
1.6.How well do internal team processes coordinate
individual effort within teams?
60
The purpose of each role relative to the strategy defined in the KPIs assigned the
role.
61
Those actions identified as enabling greatest chance of greatest goal success.

63
2. Goal cascade.
2.1.How clear is the purpose/aim of each role relative to
the strategy? - Has each role clear KPIs that quantify
the purpose?
2.2.Is there good balance between KPIs, ‘like with like’
to define the role, so that the underlying behavioral
structure is realistic and does not expect a range of
competencies in a person that is unrealistically too
broad?
2.3.Does the number of KPIs enable concentration on
the critical performance factors that drive success, or
is concentration diluted by too many KPIs?
3. Ideal actions (behavioral structure of the role).
3.1.Does each KPI have clear actions that if delivered
then the KPIs have greatest chance of being
achieved?
3.2.Do the team leader, team leaders team leader and the
people assigned the role all agree that if the ideal
actions represent the greatest chance of greatest
success in achieving the KPI?
3.3.Are the ideal actions clear and can someone be
‘seen’ doing them?
3.4.Are the critical ideal actions that most drive KPI
success clear and well defined?
3.5.Are ‘moments of truth’ identified?

64
Measuring standing human capital value
Each question in each factor is rated out of 10, then the
average taken without weighting, since questions are
regarded as equally important. Then the average of the three
factors can be taken to give an overall assessment of the
standing human capital value for the organization.
The absolute value is less important that the relative
value. So if judgment of some factor is 8 out of 10, then
what must be done to get it to 8.8 out of 10? The point is to
improve the standing human capital value which enables
improved results.
This assessment is best done by the HR Department, who
should adopt a detached, objective view rating the quality
of the standing human capital value in each division and
team.
Once team leaders grasp the link between standing
human capital value and their results, then they will be more
eager to work with the HR Department in assessing the
quality of the SHCV in their team. The focus of the team
leader is on improving SHCV, so then by guiding more
effective delivery of ideal actions they improve the results
from their team.
Role of CEO in driving human capital development
The CEO has a crucial part to play based on the simple
idea that once we agree what to do, then the next step is to
see it gets done. The CEO must have the vision of goal-

65
action expressed clearly in the OPD paradigm.
Leadership judgment: Goal cascade, role structure and
identification of ideal actions in every role.
Leadership effectiveness: Closing the performance gap.
It is important for the CEO to be committed to building
organization-wide insightful understanding of how to best
rollout strategy.
Once the leadership judgments are agreed then focus
shifts to guiding full and committed delivery of the ideal
actions identified in each role.
Creating and managing our professional mind
Elsewhere I have discussed the idea of ‘frames’ as crucial
understanding of the structure of our psychology.
Imagine a set of power point frames behind your eyes.
The frame is a simple model of how our psychology works.
On a frame are the ideas we use to ‘see’ and ‘understand’
and thereby ‘relate and act upon’ the circumstance to which
the ideas relate. Emotions become associated with the ideas,
and give them force and weight in the formation of our
mood and conduct.
The ideas on frames are the personal theories we use in
the construction of our understanding of the world in which
we live, which in turn gives rise to Reality, the world
beyond us, and reality, the world as we see it. We create our
vision of Reality - our reality, using our ideas and attitudes,
which I call ‘our personal theories’.

66
The operation of ‘our theories’ in this way makes a
scientific theory of the same psychological status as our
personal theories. A scientific theory is merely subject to a
more rigorous process of testing and assessment. Hence:
There is nothing more useful than a good theory.
The second major proposition is that our personal mood
and conduct arises mainly from within our mind. The third
is that we can choose the ideas or personal theories we use
via which we ‘see’ and thereby relate to Reality.
Our personal success begins in our mind. We and we
alone have access to our mind.
Through this series of simple and logical steps we arrive
at the unsurprising proposition that we can choose how we
think. We can choose the ideas on the frames we use via
which we ‘see’ work, organizations, our place and role in
our community and the role and place of work and the
organization in our community.
If we choose, we can build parts of our mind to better
match our circumstance. If we choose success at work, we
can build a ‘work’ or ‘professional’ mind containing our
agreed ideal actions. We can choose to ‘see’ work through
this set of ideas on frames and use it to guide our conduct at
work.
The psychology of performance
We can now ask: What are the necessary and sufficient
factors for performance at work? I list five below.

67
In six years of discussions with team leaders and
executives all have agreed these do reflect a necessary and
sufficient psychological base. The part of our mind we
construct in order to support and guide our work effort, I
call our ‘professional mind’. The proposition is that the
necessary and sufficient structure of the professional mind
is as follows:
Focus: Clarity of goals and clarity of importance of goals
in the organization.
Accuracy: Clarity of ideal actions needed to achieve
goals.
Commitment: Willingness to exercise self-discipline
and commit to do the actions needed to get the
results.
Leadership support: Sense the person feels supported
by their team leader to deliver the actions and get
the results.
Business processes support: Business processes assist
people to deliver the actions and achieve top
results.
We can now begin to imagine a frame within the
professional mind of the person. On that frame are a list of
ideal actions with the qualities of focus and accuracy that
the person is committed to enact. The person is confident of
their team leader support and is confident of the business
processes which form the platform for their efforts. They

68
are also confident those processes effectively coordinate
their effort within the broader organization.
The focus is very much on the individual mind, with the
organization seen as a collection of minds harnessed in
relation to the strategy. Now consider, would the thorough
implementation of this in every mind in your organization
represent a step forward in the professional performance?
If it works in one mind it can work in any number.
Success with clients in Auckland, New Zealand has already
established it works in scores of minds within organizations.
It works across social cultural boundaries: Caucasians,
Maoris, Polynesians, Asians and Arab being some of the
cultural types where the system has already proved its
success and effectiveness.
Cross cultural success has to do with the people choosing
to harness their individual minds to deliver the actions
agreed at representing the greatest chance of greatest
success.
People make a choice…their cultural background is
largely irrelevant to that fundamental choice; details are not,
so avoid asking people to deliver ideal actions likely to be
culturally unacceptable.
Experience has shown that if people choose to so
perform, they themselves will help recast the ideal actions
into a form they find acceptable, and in their choice to build
greater clarity their performance improves.

69
Factors in dynamic human capital value
If we choose to be successful in our work life, what is the
most productive way to manage and construct our mind?
Think of frames as ‘glasses’ in our mind that we can put
on and take off. When we put on different glasses we see
differently, we see relative to the nature of the glasses we
are wearing.
The theory from which this insight emerges shows our
mind is not continuous, it exists in segments, so home,
work, friends, etc., are all different segments, or
‘psychological structures’ in our mind. Sets of ideas and
attitudes exist in structures so we can speak of nested sets
of frames.
We can now seek to build a better professional structure
in our mind so that we achieve greater work success. Where
do we start?
Back to frames: Above I sketched the ‘ideal actions’
frame, perhaps better thought of as ‘what I do at work’
frame. This is the frame whereby the person ‘sees’ what
they do at work. In addition they should be able to visualize
themselves doing the ideal actions. Visualizing performing
ideal actions I define as engagement. It is exactly the same
as in sport; it is the person readying the body to do the things
needed to get the result.
This is a different definition of engagement than in
current HR theory and practice, but a stronger definition.

70
The stronger someone can visualize themselves doing the
ideal actions increases the likelihood they will do those
actions better. In this way engagement is linked directly
with job performance.
The ‘what I do at work’ frame will not exist on its own.
It will be nested in other key frames, such as ‘Do I want to
be successful at work?’, ‘What is the role of work in my
life?’, and ‘How do I feel about organizations and wealth
generation and my community?’
Within OPD processes the steps for dealing with this set
of nested frames is as follows.
1. Team cultural professional base. People choose the
following.
1.1.To be successful at work.
1.2.To manage their minds to build success.
1.3.To approach what they need to do at work with
professional objectivity.
1.4.To cooperate with their team leader in building their
professional mind.
2. Sign off of ideal actions in role. People agree the KPIs
are appropriate and that the ideal actions represent the
greatest chance of greatest success.
3. Performance contract. People choose success in the
assigned role and agree that professional committed
delivery of the ideal actions is personal success for them.

71
4. Build ‘what I do at work’ frame. People agree the
necessary and sufficient factors for performance as listed
above and agree to build in their mind the list of ideal
actions.
5. Business process review. Person and team leader
review all business process that underlie the role and
agree changes/compromises to improve operation of
processes and integration of person into the broader
organization.
6. Engagement. The person advises the team leader that
they can see themselves delivering all ideal actions with
no negative emotional reaction.
7. Performance management. The person and the team
leader agree to a monthly one-on-one meeting where the
person will advise the team leader:
7.1.Where they saw opportunity in their own behavior to
make that behavior closer to the perfect human
performance in the role. progress,
7.2.Where they let themselves down and did not deliver
ideal actions to standard in last month, and what they
will do about that, and
7.3.What ideal actions will be improved upon in coming
month?
Performance management as it emerges within OPD
theory is done monthly. It is people assessing their own
performance against the agreed standard of perfect human

72
performance. The team leader is a sounding board and
mentor in the person’s striving to be successful in their work
life.
The more effectively the ideal actions are delivered, the
more successful the person. The more secure and content
they feel about work and the better the result, so both the
person and the organization win.
Measuring dynamic human capital value
The key issue is whether or not the team leader has
guided each team member to build a professional frame of
mind involving the ideal actions, objective focus, and
flexibility of thinking, so ideal actions are seen as the role
and not seen as personal, commitment to personal success
at work. Cooperation with the team leader and in return
feeling supported in striving for success gains respect and
understanding of business processes and the desire to do
them properly.
The professional mind in each team is monitored every
3-5 months, via a cultural audit questionnaire that surveys
focus, accuracy, commitment, attitude to team leader,
attitude to business processes.
This cultural audit effectively audits if the team leader
has done their job in guiding development of the
professional mind in their team members.
As with standing human capital, the cultural audit should
be done by the HR Department who then advises the

73
executive of the result and, as needed, meets with team
leaders to review how the result can be improved in their
team.
Measuring human capital value, concluding comment
Measuring standing human capital value requires more
judgment and is less systematized than measuring dynamic
human capital value. However it is a crucial beginning point
of defining the ‘perfect’ standard against which actual
human performance is to be measured.
With multiple inputs from experienced people, and with
the HR Department adopting a detached ‘internal
consultant’ role, then there is no reason why the leadership
cannot reach a sound judgment on the quality of its standing
human capital.
Dynamic human capital is systematically measured by
team/cultural audits every 3-5 months. The audits focus on
accuracy, commitment, sense of team leader support and
confidence in business processes in the team.
Perfect human performance is where standing and
dynamic human capital value is scored 10 out of 10.
Standing human capital value is scored 10 out of 10 if
and when the leadership and HR Department agree and are
satisfied the ideal actions are as good as they can ‘see’. This
does not mean the organization cannot learn, it only means
that based on what the organization knows now, it has
judged the situation the best it can. This means that if the

74
behavioral structure (all ideal actions) is acted out with
commitment, then the leadership judges it has given the
organization the greatest chance of the greatest success.
The measure of dynamic human capital in a team by an
audit should never be 10 out of 10…as reality seldom
matches perfection. I have never encountered a team or
person where the ideal actions could not be acted out more
effectively. The times when I have encountered cultural
audits of 10 out of 10, in those instances the team members
involved had scored higher due to internal team
relationships, such as being nice to each other and the desire
to ‘show the boss’. In one instance the team leader and
assistant team leader were both dismissed due to their
personal relationship distorting the entire team
performance. In another instance, a challenge of the status
quo was sufficient for some objectivity to be restored.
When measuring dynamic human capital value, focus
and accuracy are fully intellectual items. They involve no
emotion, therefore in principle could be memorized 10 out
of 10. However in practice this seldom happens. All other
factors involve some level of emotional content and seldom
scored over 9.

75
Training & development62
The purpose of training is to enhance delivery of the ideal
actions.
The purpose of development is to open up a person’s
mind, free from emotional constraints and equip the person
to function in higher positions. A closely associated purpose
is to develop the person’s intellect, since higher positions
always involve greater intellectual and or creative demand.
Both training and development, when conducted
effectively, increase human capital value. The difference
between training and development cannot be overstressed.
Training: An exercise in focus and discipline where the
end result is more constrained behavior in the form of
tighter and more effective delivery of the ideal actions. The
person knows they can do it; they are being guided in how
to concentrate to do it better than they currently do.
Immediate payback from the training delivers increased
performance and better results.
Training key words: Focus, discipline, tightened
behavior, improved results now.
Development: An exercise in opening the mind and the
intellect to think differently and to understand how to ‘see’
62
Refer, CV of Dr Little, for detailed background and experience in design and
operation of human development with authority systems, ‘corporate L&D.

76
things differently, to be able to adopt different positions and
be able to ‘see’ more complex situations clearly. Very
likely the person does not know they can do it already, a key
aspect of the development is the development of self-
awareness and that they are capable at a higher organization
job level.
Development key words: Expansive, increased self-
awareness, opening of mind and intellect, improved
opportunity in the future.
Training is for everyone, developing skills at delivery of
ideal actions.
Development is a key part of talent management,
developing the intellectual, broaden vision, and build
awareness of intellectual capacity.

77
Performance management
Performance management is closing the gap between
actual human performance and perfect human performance.
The key process is coaching, listening and offering
guidance on how to deliver ideal actions more effectively.
The output from each one-on-one review is an agreement
between the team leader and the team member of which
ideal actions the team member will improve before the next
review meeting.
One-on-one performance management/coaching reviews
are done at least monthly.
Performance management has two aims.
1. Working in the business: To ensure the person retains
the agreed ideal actions ‘top of mind’. The team
leader must listen as the person discusses how well
they delivered the ideal actions last month and how
they will improve delivery in the coming month.
2. Working on the business: To review the ideal actions
in the role and identify what has been learned, and
where the ideal actions can be improved.
If people decline to accept and deliver ideal actions, they
are declining to work and the company has the right to
decline to retain the person.

78
The role of HR
Within OPD theory, the aim of HR is in to identify the
behavioral structure and guide its fullest delivery.
HR is delegated the task of partnering with team leaders
to assist identify perfect human performance relative to
strategy and then assisting team leaders to close the gap
between actual human performance and perfect human
performance. I have considered in detail the role of HR
elsewhere63
and summarize the issues below.
1. Administrative HR management and practice, including
but not restricted to:
1.1.Legislative and regulative compliance.
1.2.Salary and wage advice.
1.3.Recruiting advice and support.
1.4.Personal grievance advice and support.
1.5.Social cultural management advice.
1.6.Training and development advice.
1.7.Talent management guidance and advice.
2. Strategic HR management and practice: To bring actual
63
The role of human resources management in the modern organization
http://www.amazon.com/resources-management-modern-organization-
ebook/dp/B0050I57BO/ref=la_B001K8CWJI_1_7?ie=UTF8&qid=1351128000&
sr=1-7

79
human performance closer to perfect human
performance.
2.1.Identifying standing human capital value that offers
greatest chance of strategic success (within an
agreed accounting period).
2.2.Guide building dynamic human capital value.
Within the OPD theory, HR becomes the crucial
proactive driver of results, and becomes the crucial
department with which all other departments align since it
is HR that can guide team leaders how to best strategically
manage human performance and ensure greatest chance of
greatest success.

80
Governance
The notion of goal-action is deceptive, resulting in a
major rethink in organizational design. The concept of
human capital as developed, arises from the rethink in
organizational design and demands a significant shift in HR
philosophy, policy and processes.
The OPD theory provides an improved intellectual base
for organizational design offering HR processes that
generate a better result than any other set of processes
available.
The governance decides on the strategy and directs the
choice of organizational design. It is the executive, under
the guidance of the CEO, to then carry out that policy.

81
Change management
OPD-SHRM builds cultural and administrative structures
that enable change.
1. People are comfortable with retaining a ‘professional
mind’, central to which are ideal actions. They
understand that their success is delivery of ideal
actions. Their emotional position is detached, but
committed, exactly as a top sports person might be.
People understand ideal actions as their personal
game plan derived from strategy.
2. The SHRMIS system captures the architecture.
Therefore any change to policy, or team structure, or
focus in a role is first drafted in the time budgets
captured in the SHRMIS. The time budgets are a
detailed specification of what ideal actions agreed
that offer greatest chance of greatest success.
3. The revised time budgets are then discussed with the
people involved. The collective insights are then
captured in the new time budget.
4. People adjust their ‘professional mind’ adapting to
the new ideal actions.
5. Delivery of the ideal actions is then reinforced and
supported by the team leader in the monthly
performance management meetings.
If change involves redundancy or the threat of
redundancy then people will be nervous and distressed.

82
There is no system or process of change to alleviate this
distress. The only solution is to support and guide people to
identify a secure financial future for themselves as rapidly
as possible.

83
Definitions within OPD-Theory™64
1. Business decisions, signed off by the Executive, CEO
and finally by the governance.
a. Agreed business strategy.
b. Organization structure. The mapping of the
strategy onto the perceived market.
c. Business plan. The setting of KPIs (goals)
derived from strategy in each agreed role in the
organization structure as the quantification of
strategic achievement in the accounting period.
2. Strategic human resource management. HR partners
with Executive to achieve apt and accurate SHRM.
a. The identification within each role of the ideal
actions derived from the KPIs defining the role
within the organization.
b. The drafting of the role specification involving
ideal actions derived from KPIs and ideal
actions as part of the business processes
whereby the role is integrated into the operation
of the whole organization65
.
3. HR works with Executive to undertake organizational
development (steps 1 and 2) and change management
64
Refer table at end of web page, www.opdcoach.com for summary.
65
Note: Steps 1 and 2 are the definition of ‘organizational development’ within
OPD theory.

84
when deemed necessary.
4. Team leadership. HR partners with team leaders
(including Executive) to achieve.
a. Gaining agreement of the people assigned the
role that the role specification defines what
needs done in the role to achieve success in the
role.
b. Performance management.
i. Daily maintaining ideal actions top of
mind.
ii. Regular review with team member of
their delivery of ideal actions to
standard.
c. Motivation. Team leaders avoiding actions that
demotivate while ensuring people having fun
doing agreed ideal action to standard.
d. Working ‘on’ the business. Regular review
with team that current agreed ideal action still
offer greatest chance of greatest success.
e. Cultural audits. To assess frame of mind of
team and take action to lift team frame of mind
to improve results.
f. Learning firm: shared among team leaders the
best ideas offering greatest chance of greatest
success. HR ensures all ideas are fully

85
documented and recorded.
g. Training and coaching. Develop skill with ideal
actions in each team member.
h. Talent identification and management. People
with the discipline and application identified
and given greater opportunity.
5. HR works with Executive to assess both standing and
dynamic human capital value.
a. HR is accountable to the CEO for the final
quality of the behavioral structure relative to
strategy and the delivery of that behavioral
structure to standard. While the full
responsibility for team achievement rests with
the team leader, HR shares that accountability
and is expected to advise the division Executive
then the CEO should any team leader be failing
to implement the system to standard.
b. HR is accountable for the value of the human
capital expressed in the balance sheet.
Therefore, HR is accountable for the delivery
to standard of agreed ideal actions. If the
delivery of the behavioral structure to standard
does not result in strategic success due other
market forces, then that is responsibility of the
CEO and governance.

Human capital 5th edition Sept 2016

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