The OLC of Human Capital is circular based on the 6 rotational needs of humans, which mean as an employer or manager of human capital you cannot fix any of the human capital issues if you do not comprehend how human capital is "wired". Just as an organization can either be managed with an opportunistic or objective attitude, so can a Human Capital Life Cycle. To treat the variable components of organizational OLC as objects would undermine the entire CTM philosophy; which is why understanding how the human capital of how business is "wired" is so important.


You can measure anything you want, any way you want, but measuring output and discovering where problems exist, is only half the problem. But why solve a problem if you are not going to get credit for it? A common feeling among employees is, "It's not my job."


Digging deeper into human psychology provides some basic answers for comprehending the opportunities associated with understanding the needs of your employees.


The fixed interval schedule (salaried employees) uses a timing device of some sort. If the employee shows up to work every day on time and leaves on time, at the end of every two weeks they get their reward (paycheck). If they fail to do so, they do not receive a paycheck. But even if they stay late or come in early every night, they still get the same amount on their paycheck. One strange thing that happens is that the people eventually tend to “pace” themselve. They start to figure out that the only way they can increase their income per hour is if they spend less time at work actually working. Human psychology sets in to the point where they begin justifying these claims with exclamations that they are underpaid, or do not receive the recognition they deserve, etc. "Why should I try as hard as Joe does, he is here less than I am and he makes more money...my manager just likes Joe more than me."


The variable interval schedule. Variable ratio means you change the timing of the opportunity when you are rewarded. For example, some days you may complete 20 sales and the next day 0, but the point is you never know when the next sale will be. With the variable interval schedule, people no longer “pace” themselves, because they no can no longer establish a “rhythm” between behavior and reward. Most importantly, these schedules are very resistant to extinction. (WHICH IS THE KEY TO CTM.) An OLC is an OLC regardless of whether it is measuring human capital or an entire organization; and because it is based on a biological paradigm, it values variable data as an opportunity to evolve.


The difference between fixed and variable interval schedules makes sense, if you think about it. If you have not gotten a sale for a while, well, it could just be that you are at a particularly “bad” ratio or interval! Just one more phone call, maybe this will be the one!


Managerial and employee relations are usually adversarial. Since neither understands the power of working together for the benefit of the corporation, both fail to earn their potential, and thus actually compound the problems of reaching profitability, rather than solve them.