The importance of people as components of the human system in the consideration of the company as an organization is unquestionable in order to understand organizational development. Allen Woo, an expert in corporate personnel management, provides information to understand the human factor and what role it plays in business development.

Unlike in the past, when technical functions and products were predominant in the organization, today, the intangible aspects (like people) are more important. This is because they are directly associated with their degree of involvement, their orientation towards common goals and processes focused on adding value for the customer, as activities that emanate from personal attitudes and knowledge.

“High organizational performance has become an imperative for survival in increasingly global, competitive, and complex markets, with customers with rising expectations, which justifies the new role of people, their knowledge and experience,” Woo states.

It is also assumed that the entrepreneurial vision will have to lead to an organizational project, which will have to be a meeting place for the people involved in it. The project, in order to achieve the expected success, must contain the definition of the mission, the development of management systems, corporate culture, organizational structures, and management policies.

The concept of the “human factor” or the person as a member of an organization from the point of view of the organization’s management has evolved in the business context. Initially, the classical school of management and its developments throughout the 20th century focused business studies on the physical and technical aspects of work, based on the assumption of a rational being or person.

In an alternative line, other trends emerged from the beginning of the 20th century, whose support was psychology and sociology rather than the aspects focused on engineering and the traditional perspective of the technical system. This new perspective gives a different and greater importance to the human factor.

The “rational being or rational person” model proposed by neoclassical economists, characteristic of the early decades of the 20th century, was rejected and, by extension, the well-known classical theories of management, such as Fayol’s theory. Instead, it is proposed that the boss must be a leader, and the success of the company will depend on the acceptance by employees or subordinates of the objectives proposed to them.

The study of people in the organization and, therefore, their management and administration in the company has changed, focusing on four approaches or terms as its conceptual framework has developed, namely: personnel, human resources, human capital, and human talent.

First, there is personnel. This term is used to describe the set of people working in the company, belonging to a certain class, corporation, or dependency. On the other hand, human resources are the set of people, as an expression of a productive factor of work, which is under the control of the company in a direct employment relationship; in this case, people, to solve a need or carry out any activity in the organization.

Human capital is considered a set of attitudes, values, knowledge (aptitudes), skills (abilities) inherent to the people who make up the organization. And finally, human talent is the intellectual aptitude of the people of an organization valued by their natural or acquired capacity for their performance.

“The managerial tasks related to the organization’s human system must be complemented by an appropriate personnel policy that develops the corresponding strategy formulated,” explains Woo. “This is done in order to match people with their attitudes, aptitudes, and skills to the company’s intended objectives, in accordance with the leadership and culture to be developed in the company.”

In this sense, the role of the diagnosis of human resources, of their selection, adaptation, training, and orientation of their professional career plan in the company and of the remuneration system, will be key pieces to achieve an adequate management of people. This will, in turn, allow their motivation and participation to gain the maximum linkage and commitment to the objectives of the organization.

“The need for organizations to delegate powers and responsibilities to solve problems and the increasing demands for autonomy, personal development, and self-fulfillment on the part of employees make motivation increasingly important in companies,” concludes Woo.