Disclosing improvements in human capital: comparing results to the rhetoric

Abstract

Purpose

The purpose of this paper is to examine the reasons for and outcomes of the rhetoric of disclosures of human capital (HC) management practices and to discuss how disclosures could be changed to be more meaningful and appropriate in practice. Thus, the research question of interest to this paper is “Is the rhetoric of HC disclosure achieved in practice?”

Design/methodology/approach

Using a case study approach, the paper utilises content analysis to examine the rhetoric of HC disclosures and the results of HC management practices utilising corporate social responsibility (CSR) reports, newsletters, annual reports, and other publicly available information, with an emphasis on media reports. The case study organisation is Westpac Bank (Australia), chosen because of the transformation in its approach to HC management since 2001 and its reputation as a global leader in CSR practice and reporting.

Findings

The paper illustrates how highly exposed HC disclosures are to scrutiny by both internal and external stakeholders and if the rhetoric is not transformed into practice how the disclosures can be used as a weapon by adversarial stakeholders to attack the organisation and/or attempt to change the balance of power between management and employees. It is argued that it could be more beneficial if HC disclosures were to report on the ongoing struggles and conflicts that are inherent in HC management practice, rather than not admitting to or not mentioning them at all, in order to reduce information asymmetry and build trust in the disclosures so that that the disclosures are less likely to be seen as merely rhetorical arguments.

Research limitations/implications

The paper is limited to one particular organisation from which generalisation is not possible. Since the research is undertaken from outside the organisation, and relies largely on secondary data sources, it thus also relies in part on conjecture about the change processes which occurred inside the organisation.

Originality/value

The paper adds to the emerging discussion of how organisations put their HC management rhetoric into practice and whether or not they achieve their intended outcomes.

Citation

Dumay, J.C. and Lu, J. (2010), "Disclosing improvements in human capital: comparing results to the rhetoric", Journal of Human Resource Costing & Accounting, Vol. 14 No. 1, pp. 70-97. https://doi.org/10.1108/14013381011039807