What is Social Capital and Why Does it Matter?


September 20, 2021  |  Leann Pereira


Social capital theory enhances our ability to explain workplace dynamics, such as employee engagement and equity and inclusion, in ways that human capital theory doesn’t. Here is a short primer on social capital. 

What is social capital?

Social capital is the value of the relationships between people. Strong social capital creates productive outcomes. It is an idea that explains why some people are more successful in the workplace than others even when they have similar qualifications and skills. It’s made up of a range of things that affect people’s experiences like trust, unconscious bias, empathy, and fun. Such positive emotions help teams work together effectively and negative ones can create unnecessary distractors. 

Social capital is not about ‘who does what’ as much as it is about how people feel as they are working together. Unlike human capital, it is not a measure of individual achievement or productivity, but rather it is a measure of group-level achievement and productivity. 

Similar to other forms of capital, like human or financial capital, the ability to build social capital is based on a set of competencies that can be developed through monitoring and practice. 

Why is it important to monitor social capital by using social indicators?

Social indicators describe the attitudes and behaviors that create Inclusion, Respect, and Ethics in the workplace, regardless of people’s education and skills. Without these competencies workplace norms and behaviors degenerate, conflicts erupt, and productivity plummets. People disengage and leave and oftentimes the organization faces risks in the form of security breaches, harassment, and discrimination claims. So, it’s really important to pay attention to social indicators as measures of the quality of the relationships within the organization in order to identify risks and leverage strengths.

Studies have shown that social indicators such as the ability to create accountability, trust, empathy, and allyship are as reliable as traditional human capital metrics such as level of technical expertise when it comes to understanding how well someone will perform as part of a team. This means that the highest-performing individual may not be the best candidate to hire. Social indicators are crucial indicators of job performance in management and leadership roles.

How can we advance healthy workplace culture using social indicators?

If we want to build behaviors that contribute to a healthy workplace, we need to measure what matters. Emtrain AI measures fourteen social indicators across three core competencies of Respect, Inclusion, and Ethics within the learning environment.

Inclusion
Diversity is created when people feel valued because of their personal strengths and characteristics – in other words, diversity is the outcome of inclusion.  Put another way, diversity happens when a person reaches out to another who is different. This inclusive behavior creates diversity. 

We can measure inclusion by asking people about what they do to create belonging and how they feel about their experiences and relationships within the workplace. Feelings of authenticity, trust, and suspicion of unconscious bias are indicators of inclusion, and therefore are predictors of how well an organization can initiate and sustain workplace diversity initiatives. Knowing how an organization performs on measures of inclusiveness can help organizations interested in advancing diversity to create strategies for knowledge and skill-building activities that are informed by science.

Ethics
Unfortunately, people are the weakest link in the cybersecurity chain. Many cybersecurity issues are caused by lapses in employee judgment and small mistakes like not changing passwords. When people understand that their behaviors matter the most, stronger and more ethical norms and practices become “the way things work around here.” By measuring these four indicators of Trust, Accountability, Decision-Making Processes, and Norms and Practices, organizations can begin to build the behaviors and skills that will lead to a more ethical and secure workplace.

Respect
Among the attitudes and behaviors that lead to harassment claims are unjust power and privilege, and a lack of norms and practices that keep these problems in check. By quantifying and monitoring such social dynamics as these, organizations can help mitigate tensions that lead to employee relations claims while creating a conscious culture that enables everyone to thrive.

Conclusion

Social capital builds when people work well with each other and can accomplish things together. The attitudes, behaviors and skills required to build social capital are monitored and developed by using social indicators. Together these indicators form the competencies of Respect, Inclusion, and Ethics. It is important to measure social competencies by using social indicators in order to understand and diagnose organizational health and risk.

Learn more by downloading a graphic of our fourteen Workplace Social Indicators here.


inclusionsocial capitalWorkplace Culture
Leann Kang Pereira
Senior Director of Organizational Psychology
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