Mental Capital Predicts Organisational Profitability

On 02/Aug/2019 / In Articles

We are told that our century is the jet age and that robots may take over major business operations as currently obtainable in more developed economies of the world. There is a subtle but deliberate tendency towards the annihilation of the human capital in the production chain since it is the most difficult of all resources to harness. Human beings have a mind that facilitates initiatives and independent action that may negatively alter the dynamics of the production process but the robots do not have a mind of their own and cannot creatively respond to challenges not envisaged.
No business succeeds without a creative and resourceful human capital base because policy framework, implementation strategy, coordination, evaluation and envisioning as crucial roles of management are made possible by the human resource.  The challenge of the 21st century business or political leadership according to the legendary business philosopher Peter F. Drucker is that of harnessing the human potential and getting the best out of it. The United Kingdom government office for science runs a foresight programme specifically dedicated to mental capital and wellbeing. This project discusses how to optimise mental capital through life in a multisectorial manner and concludes by assessing the policy implications in a proactive manner.
Mental capital is the totality of an individual’s cognitive and emotional resources, including mental capability, flexibility and efficiency of learning, emotional intelligence and resilience in the face of stress. The extent of an individual’s resources reflects basic endowment, experience and education which take place throughout the life course. This, therefore, captures those elements that serve to establish how well an individual is able to contribute effectively to society and also to experience high personal quality of life. Organisational profitability is hinged on the mental capital that the human resources facilitate.
Management consultants examine organisational performance by appraising only the face-value of costs of production which are often basic and inevitable like emoluments, consumables and utilities. These are not the costs that make organisations incur loss because they are usually apparent and often considered before business is started. The more dangerous and destructive costs that usually lead to the folding up of businesses are linked to human resources which are often hidden and not easily defined. This is the reason for the temporary but not effective preference for the robotic replacements of human beings in modern channels of production.
What the employees bring into the work place is enormous and encompasses the nature and nurture that have shaped their minds; temperament, upbringing, values, attitudes, skills, cognitive training, coping mechanisms. Unfortunately, some of these qualities are not easily determined at the point of recruitment and selection, which may invariably frustrate organisational performance. Overemphasis on the measure of intelligence quotient by insisting on particular class of grades may not be enough since the mental capital of the human resource also encompasses emotional intelligence which may not be reflective in the academic assessment.
When there is failure of mental capital development in the human resource the organisation will incur hidden costs that will invariably destroy it. There could  be deliberate sabotage that will shrink  an already growing  market or outright vandalisation  of equipment or  a subtle undermining of the company’s fortunes in  many destructive ways which  translate into costs that cannot be captured  in the accounting books .There could be absenteeism  where workers facilitate quasi- legitimate reasons  to be absent from work and still get paid . Others may actually come up with presenteeism where employees  are present but not applying themselves and  some may come out as direct  nuisance to block production  channels .Due to mismatch  between competence, personality and job prescription ; folks can be underutilised and /or mentally distressed  leading  to adoption of maladaptive coping mechanisms by abusing   psychoactive substances or  frank nervous breakdown. The organogram becomes distorted and communication channels become defective as mental health is severely challenged with grave implications on the ultimate organisational performance.
The psychodynamics of the overall executive officer also determines the prevailing work- culture which confers the climate that obtains in the work place either for profit or for loss.
Every leadership in an organisation should endeavor to get the best out of the human resource in the form of mental capital development to guarantee sustainability and profit in this season of economic recession and social change.


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