Human capital management

 

Human capital management

Introduction

The concept of human capital (HC) was initially formulated by Nobel prize-winner and economist Theodore Schultz in the early 1960s.

The term human capital‘was originated by Schultz (1961) who elaborated his concept in 1981 as follows: Consider all human abilities to be either innate or acquired. Attributes… which are valuable and can be augmented by appropriate investment will be human capital.

Bontis et al (1999)says. Human capital represents the human factor in the organization; the combined intelligence, skills and expertise that gives the organization its distinctive character.

As defined by Baron and Armstrong (2007: 20), human capital management (HCM) is concerned with obtaining, analyzing and reporting on data that inform the direction of value-adding people management, strategic, investment and operational decisions at corporate level and at the level of frontline management.

It is, as emphasized by Kearns (2005), ultimately about value.

Scarborough and Elias (2002: ix) commented that: ‘The concept of human capital is most usefully viewed as a bridging concept – that is, it defines the link between HR practices and business performance

in terms of assets rather than business processes.’

 

 

 

Global context

Standard Chartered Bank uses a human capital scorecard to analyze its data. This is produced on a quarterly and annual basis with various cuts of the same data produced for different business segments and countries, in addition to a global report. This comprises a series of slides with

commentary to enable managers to understand the data.

 

Conclusion

 

The company treats employees as capital then the company will gain greater benefits than just treating employees as a  human resource In  today‘s  knowledge-based  economy  greater  emphasis  is  adverted  to  human  capital.  To survive in the dynamic environment and to achieve the competitive advantage; human capital is of immense priority thus has become very important. Organizations are much concerned with

the human capital because they think they can only achieve the competitive advantage with the effective utilization of its human resource. 

References

https://www.researchgate.net/publication/321950483_HUMAN_CAPITAL_MANAGEMENT_THE_NEW_COMPETITIVE_APPROACH

Baron, A and Armstrong, M (2007) Human Capital Management: Achieving added value through people, London, Kogan Page

Kearns, P (2005) Evaluating the ROI from Learning,London, CIPD

Scarborough, H and Elias, J (2002) Evaluating Human Capital, London, CIPD

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