The Theory of Profitable Humanization: The Coming of Employeeholder and Human-Centric Organizations

Abstract

The current turbulent times have compelled firms to focus on employee safety and well-being and the requirement for creating humanized organizations has never been as pressing as now. Concurrently, the quest for having a single measure for a firm’s performance continues, and the debate whether a shareholder or stakeholder interest should take primacy continues to intensify. To humanize organizations, the goal of theorizing employees as an end and not a means to an end has been challenging. This article fills in a much-needed gap in the literature by theorizing employees as an end and not a means to an end and developing a theory of profitable humanization. The theory employs a dualistic ontology, narrative style of theory development, makes use of the systemic economic conceptualization of a human being, draws from the theoretical physics concept of hyperspace, and Aristotelian concept of happiness to suggest employee happiness as a multi-dimensional construct that can serve as a single measure for assessing a firm’s performance. As creating wealth, community service, and caring for the environment are essential for people's happiness, having the single measure of employee happiness reconciles many conflicting approaches, including the shareholder and stakeholder debate. The theory of profitable humanization introduces the concept of employeeholder and contributes to humanizing organizations—a compelling requirement in the current turbulent times.