The land may be beautiful to view, or it might even be a site of historical importance. But it is of no practical value to the landowner. Pastures are living systems and contemporary organizations are living systems. We propose that capital in an appreciative organization is primarily concerned with people and humanistic values, rather than with money or economic values. The potential of the contemporary organization is still only realized when a nurturing environment is created where human beings can thrive, express and grow their talents and find sustenance. Thus, we use the term human capital in this book to remind us of the living nature of most forms of capital extant for the past five to six hundred years.
We use the term human capital for yet another reason. Modern accounting principles identify human resources as either a financial expense or a financial liability. While land, buildings and machines are assigned a financial value and categorized as organizational assets, the salaries being paid employees are categorized as expenses. Long-term employment contracts may even be categorized as liabilities. Consequently, a financially savvy manager will recommend that machines replace employees, so that the organization’s expenses can be reduced and its assets can be increased. We must counter this shortsighted assignment of employees to the deficit side of the financial ledger by repeatedly noting that the knowledge, skills and aptitudes of employees are viable and tangible assets of enormous potential.
