10 steps to successful human capital management
| DOI | https://doi.org/10.1108/14754390580000848 |
| Published date | 01 November 2005 |
| Pages | 24-27 |
| Date | 01 November 2005 |
| Author | Stephen Young |
| Subject Matter | HR & organizational behaviour |
24 Volume 5 Issue 1 November/December 2005
OST PEOPLE IN THE HR profession
can put together a lucid argument for why
human capital management (HCM) is
crucial to the survival of their
organization. One example could be something like
“with emerging economies winning business because
they offer faster and equal quality service for half the
price, the West must focus on the high-value end of the
production chain, which is driven by the knowledge,
expertise and creativity of its people. It’s imperative
that we manage our human capital effectively to drive
optimum performance.” Our 10-point plan will guide
you through the human capital management learning
curve, which will at some points be steeper than others.
But one thing is guaranteed: if you don’t do it, your
competitors will.
In the UK, the government is concerned by the
country’s lagging productivity levels in comparison to
the US, France and Germany. In 2003, the government
appointed the “Accounting for People Task Force” to
look at ways in which organizations could measure the
quality and effectiveness of their HCM.
The task force called for company directors to
include information about HCM within their
Operating and Financial Reviews (OFRs) or explain its
exclusion. The statutory OFR came into force in April
2005 and must be produced by a company alongside
its annual report and accounts. The OFR is designed to
convey a board’s understanding of the factors that most
affect the organization’s performance.
Denise Kingsmill, the task force chairwoman, said:
“
Directors need to transform the airy cliché about
people being their greatest asset into a guiding
principle of business strategy.”
A different reality
ISR’s own experience is that not many organizations
are doing a good job of measuring, reporting on and
managing their human capital. When it comes to the
“what” and the “how” of HCM, the lucidity of the
“why” seems to disappear. HCM’s importance is clear,
but what exactly is it that we are trying to achieve? The
Accounting for People Task Force describes it like this:
“Human capital management is an approach to people
management that treats it as a high-level strategic issue
and seeks to systematically measure how people policies
and practices create value.”
To understand the extent to which measurement and
management of human capital is happening in
organizations, ISR recently conducted a survey of
senior executives, managers and HR professionals
called “Measuring and managing human capital in
today’s organizations: A study of company practice.”
The sample of 100 respondents included a broad mix
of industry sectors and countries across the world.
At first sight, the results suggested that a high degree
of human capital management was taking place within
10 steps to
successful
human capital
management
How strategic people management can
make companies successful
CEOs often talk about people being their best asset,
but how good are they at measuring and managing it?
Not very, according to Dr Stephen Young, deputy
regional director of ISR Europe. Here, he offers a 10-
point plan to reaching HR’s “Holy Grail” – effective
human capital measurement and management.
by Dr Stephen Young
ISR, Europe M
© Melcrum Publishing Ltd. 2005 For more information visit www.melcrum.com or e-mail info@melcrum.com
To continue reading
Request your trial