People an asset of an organization which can’t be

                                          People are as a cost for the business

1.1 Introduction

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In the
context of business an asset is something that keeps the business florin in the industry. The assets are classified in
to two categories: Tangible and Intangible. It is needed healthy combination of
above two assets to be succeeded as an organization.

The buildings, vehicles and
office equipment, inventory, all financial resources and assets like which can
be touch physically are belongs to tangible assets. These assets tend to
depreciated over time. Further tangible assets are considered high liquidity
assets because they can be easily converted in to cash. Assets which don’t have a physical form, such as
a reputation of the organization, and brand names, patents, trademarks and
copyrights, as well as market share, customer loyalty and human capital are
considered as intangible assets. These assets are not considered as liquidity
assets, but their internal value will be added to
the credibility and the value of the organization. Here we recognize the human
capital as an intangible asset which was neither disclosed nor assessed by the

The human capital is one of the most important parts of an organization.
The effectiveness of an organization either it is success or failure is largely
dependent on the competence of the employee talents and skills. Further it is
the turning point of growth and development of a business or an organization. It
is needed a higher level of positive and creative contributions from people of
an organizations to achievement of its goals. Furthermore human resources are
as an asset of an organization which can’t be handled the same way as the
others resources are been handled.

1.2 Early Notion of Personnel Management “Employees are as a Cost”

Initially there was an agriculture economy with limited productions.
The working arrangements limited to craftsmen and their apprentice. The
apprentice lives in the home or same workplace with the master craftsmen and
master took care of his health and wealth. After the Industrial Revolution of
the mid-eighteenth century there was huge emergence of large factories as the
economy was changed from agriculture base to industry base. Many labor riots
were raised due labored and untidy work infrastructure in the factories. A
separate department was established to look into workers wages, welfare
and other related issues.










Industrial revolution there was growth of Labour Union. The employees working
in the factories were subjected to work long hours without rest and for very
less wages. This led to start protest and establishment of Labor unions. Increased of competition and the demands to fulfill orders,
factory owners are motivated to take serious concern of productivity that
affected badly on employee absenteeism and high turnover. Furthermore the way
the factory owners can increase productivity and decrease the cost without
labor issues, led to emerge Frederick W. Taylor’s scientific management theory
and application of Henry ford’s faith in mass
production, that involved establishing a most productive way to
undertake a process. (””””””””)


According to Frederick
Taylor the production efficiency
can be increased by close observation of
the individual worker and elimination of waste time of production process.
Further it was believed that the determination of the best way for the worker
to do the job, to provide the proper tools and training, and to provide
incentives for good performance will be affected to the permanence
proportionally. Every task was broken into small and simple segments
which can be easily analyzed and taught. This led to achieve maximum job
fragmentation to minimize skill requirements and job learning time. (Schachter, H.L.1989)

observed the same principles as Taylorism. Ford introduced the assembly line. The machines are arranged in the right order to
manufacture the product which the
control of work. Responsibilities and the tasks have been well identified and
assigned according to the employees’ competence. Employees’ efficiency is
controlled by the speed of assembly line.  (Gartman, D.2009) The main goal of Tailerism and Fordism are to lower the
manufacturing cost and increased the productivity. It was considered the
employee as a cost and implemented new concepts and the methodologies to
decrease cost factor by neglecting employees as a human being.

Hawthorne studies were conducted by Elton
Mayo & Fritz Roethlisberger (1927 to 1940). – Observations and findings of
Hawthorne experiment shifted the focus of Human resource from increasing
worker’s productivity to increasing worker’s efficiency through greater work
satisfaction. Further he believed that  
performance of employees is depending on their surroundings and by the people
that they are working with as much as by their own competencies. (Sedgwick,

1.3 The Reasons for
Employees Are Considered as a Cost to the Business

 In early
notion the employees are considered as a cost to the business. The theories
like Tailerisum and Fordisum were merged according to the way they could
decrease the cost of the labor. The job functions are broken into small and
simple segments and redesigned the way they can obtain maximum output using a
least employee involvement. Employees were treated like a wheel of big machine, and their skills and talents were ignored.
From the evaluation of Human