Human capital management.pptx

7/24/2019 Human capital management.pptx

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KAMRAN KHAN 10-

022MUHAMMAD TAIMUR 10-017MUHAMMAD ZAFAR 10-045WAQAS ALI SAFDAR 10-057


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Human Capital Management

Human capital management (HCM) isconcerned with obtaining, analyzingand reporting on data that inform the

direction of value-adding peoplemanagement strategy.


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HCM is the use of metrics to guide anapproach to managing people that regardsthem as assets.

t emphasizes that competitive advantage is

achieved by strategic investments in thoseassets through employee engagement andretention, talent management and learningand development programs.

HCM is about creating value throughpeople.


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AIMS OF HUMAN CAPITALMANAGEMENT

!he four fundamental ob"ectives of HCMare#

$. to determine the impact of people on thebusiness and their contribution to value.

%. to demonstrate that H& practicesproduce value for money in terms, fore'ample, of return on investment.


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AIMS OF HUMAN CAPITALMANAGEMENT

. to provide guidance on future H&and business strategies.

. to provide data that will informstrategies and practices designed toimprove the e*ectiveness of peoplemanagement in the organization.


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+


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/ractical 0pproach#


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/ractical 0pproach#


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THE LINK BETWEEN HCM ANDBUSINESS STRATEG

t is often asserted that HCM and businessstrategy are closely lin1ed and that an HCMapproach provides guidance on both H& and

business strategy.

!he prime purpose of human capitalmanagement is to establish 2anemployment proposition that lin1s the wor1of employees to strategy and pro3ts.


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!he issue is 4what this lin1 is 56 and4How to ma1e it wor156

0 bland statement that HCM informsH& strategy, which in turn informsbusiness strategy, tells us nothingabout what is involved in practice.

!his means that all business strategicgoals for depend on people for theirimplementation.


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7ays to lin1 HCM and 8usiness9trategy#

$. ne way of being more speci3c is touse HCM assessments of the impact ofH& practices on performance to "ustifythese practices and improve theli1elihood that they will wor1.


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P!"#$%#"& A''!("#)


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%. 0 second way of specifying the lin1 is toe'plore in more detail the people implicationsof business strategy and, conversely, the

business implications of H& strategy.

!his can be done by analyzing the elements ofthe business strategy and the business drivers

and deciding on the H& supporting activitiesand HCM data re:uired.


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. 0 third, and potentially the most productive wayof lin1ing H& and business strategy, is to relatebusiness results to H& practices to determine howthey can best contribute to improving performance.

;or e'ample#

nnovation is prime business ob"ective of 90M9and in recent years company has achieved thisob"ective very well. 9o telling that how much ?age

of individual H& practices contribute to this resultwill help to @in1 the HCM to 8usiness 9trategy.


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DE*ELOPING A HUMAN CAPITAL

MANAGEMENT STRATEG


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DE*ELOPING A HUMAN


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DE*ELOPING A HUMANCAPITAL MANAGEMENT

STRATEG btain, analyze and report on data that informthe direction of H& strategies and processes.

nform the development of business strategy.


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DE*ELOPING A HUMAN CAPITALMANAGEMENT STRATEG

etermine the impact of people on business results.

0ssess the value of the organizationAs human capital.

mprove the e*ectiveness of H&.

/rovide data on the performance of the organizationAs

human capital for the operating and 3nancial report.

emonstrate that H& processes provide value formoney.


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DE*ELOPING A HUMAN CAPITALMANAGEMENT STRATEG

!he eveloping strategy programcontinues with the identi3cation ofpossible measures and how they can

be used.

!he analysis of possible measures

leads to the development of astrategy for introducing and usingthem.


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&90&CH 0&!C@ /&9=!0!=


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H+," R./(+!#.M."/+!.,.$ T). P!./.$

" $). W" F(!"!9hahina Bavad, @&,

Bamshedpur


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I$!(+#$%(

$. 9uccessful organizations are increasinglyrealizing the value of human element in thebusiness performance.

%. !he ever changing business needs coupled

with technological advancements, economicand regulatory issues and changing wor1forcedemographics pose new challenges to H&professionals.

. Hence, strategic human resourcemanagement is gaining augmented importancein the business and academic circles.


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eview of Existing H Measurement

Models

Human resource accounting

Human resource scorecards

Human resource metric system

HC 8ridgeD framewor1

@0M/ model etc are the most commonly1nown methods among them.


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Human esource Accounting (H A):

!he model was developed with an ob"ective ofrecognizing the contribution of behavioral variables

in organizational performance.HRA has been defned as the process o

identiying and measuring data about humanresources and communicating this inormation to

interested partiesH&0 is developed for the general purpose systemof accounting for human resources and for theapplication in speci3c H& events.

!he ultimate ob"ective of human resourceaccounting is to provide valid and reliable measuresof the cost and value of people in order to guidedecision-ma1ing by management and investors

(;lamholtz, $EF%).

!he following are some of the H&0 methods


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!he following are some of the H&0 methodsac1nowledged in the literature#

H%/$(!%#"&"#+%/%$%( #(/$ ,.$)(R.'&"#.,.$ #(/$ ,.$)(

O''(!$+%$ #(/$ ,.$)(

B.)"6%(!"& ,(.&E#((,%# ,(.&

B!."-.6. ""&/%/

C(,'.$%$%6. B%%8 M(.&


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Human esource Metrics :

H& metrics comprise of accounting li1emeasures to :uantify H& activities. t may include

human capital management measures, H& subfunction measures etc.

H& metrics are developed to measure eGciencyand e*ectiveness of H& system (@awler ,

@evenson 8oudreau, %II)


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H Scorecards:

!he ma"or purpose of the H& scorecard is todevelop H& dashboards that capture H&

contribution.8oeing, >eneral lectric, 9outh-Corp @td.,


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C(,'.$.#%./0dmin. e'pertisemployeeadvocacy

9trategye'ecutionChange agency

S$!"$.8%#

F(#+/perationale'cellence/roduct leadershipCustomer intimacy

HR P!"#$%#./

Communication7or1 designevelopment&ewardsintimacy

HR S/$.,0lignmentntegration

i*erentiation

HRD.&%6.!"9&.

/7or1forcemindset!echnical1nowledge7or1force

behavior


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The HC ridge! "ramewor#:

eveloped by 8oudreau and &amstad.

!he purpose of the model is to provide a

framewor1 to articulate the logical connectionsbetween investments, changes in the nature ordeployment of wor1force talents, and sustainablestrategic success.

!he model focuses not on what H& is doing, butwhat the organization should be doing abouttalent.

!he model is based on three anchor points thatcould be used for measuring H& practices.

Gciency

*ectiveness


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$AM%:

@0M/ is another H& measurement model

developed by 8oudreau and &amstad.

!he model identi3es four-critical components ofmeasurement system that drives strategicchange and organizational change (Boudreau &

Ramstad, 200!"@ogic

0nalysis

Measurement and

/rocess


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Contrasting H Measures with

"inancial Measures:

8efore, we begin to compare and contrast H&

measures with 3nancial measuresJ it shall beinteresting to note the following comments bysome noted scholars.Compared to 3nancial, mar1eting and production

measures, e'isting human resources are less systematic,less accepted and less li1ely to guide 1ey decisions6.(8oudreau and &amstad, $EEF).

Management of human capital is distinctive from

managing physical assets and therefore an entirely di*erents1ill set is re:uired6 (/rovo, %III).

H& measurement systems typically strive to show thereturn on investments in H& programs, or apply scorecardsand si'-sigma techni:ues to H& processes6 8oudreau and

&amstad (%IIKa)


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usiness Case for H and H

measurement

40s business competition escalates and corporate

resources shrin1, all sta* functions (e.g., managementnformation systems, 3nance, human resources, andresearch and development)are being pressured todemonstrate their value added and to refocus their

resources for higher business leverage6.

-A!$)+! K: .+8 " B(9 B.!," ;1


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An H Measurement "ramewor#:

9ome of the gaps identi3ed in the H& measurementliterature are summarized below#

H& measurement models have been largely focused on:uanti3cation of H& activities

!he problem is not lac1 of measures but the abundanceof measures of eGciency

ebate on whether H& is an asset or not is still notconcluded

Most of the H& measures are eGciency-based, aimed atinternal reporting

i*erent measures have been developed for di*erentpurposes. !herefore, there is no generally acceptedframewor1 on H& measurement

!here is no mature decision science or logic to e'plain


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!here is no mature decision science or logic to e'plainand analyze the underlying aspects of H& measurementmodels. !herefore, the developed measures remain asstandalone numbers.

"uture esearch:

Conte'tual variables of human resource e*ectivenessneed to further researched

evelopment of strategic measures that reects H&-strategy lin1 can be e'plored further

Methods to capture intrinsic value of H& function needto be developed

$imitations:


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$imitations:

$. /roposed model is developed completelybased on the reviewed literature, thus the

model might have overloo1ed the practicalimplications and operationalization aspects.

%. 0ssessing the validity of H& metrics,developing alternate human capital measurementand strategic impact measurement models etc isbeyond the scope of the paper and therefore

these aspects are not attempted.

. mpact of e'ternal variables on businessstrategy is not considered as part of the model.

Conclusion:


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Conclusion:

$. 0 number of H& measures have been developed with

an ob"ective of reecting and reporting the value of H&

to organizations.%. Most, although not all, human resource measures

focus on the e'penditure of resources, with a view to"ustify investments in human resources.

. !he e'cessive emphasis on eGciency may lead tounintended conse:uences li1e reduction in manpower

and investment in human resources.

. !he lac1 of an overarching theoretical framewor1 to

support the measures represents critical barrier to thedevelopment of strategic measures.

K. evelopment of a decision science or logic lin1ing H&

activities to business strategy is the 3rst and foremostaspect in producing indisputable evidence that H&

d i d

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Human capital management.pptx