The theory of Human Capital Management (HCM) tries to explain and process the role of human beings in the workplace. However, there are limitations to the theory because people, in all the diversity of their traditions, talents, and treasures, often differ from what is expected of them. HCM would like to consider humans as assets, but this has several flaws:
- You cannot count people as if they were physical assets. While the value of physical assets do appreciate or depreciate, you cannot accurately measure the appreciation or depreciation in people.
- You cannot treat people as financial capital. Finding financial capital is harder than finding people.
- You cannot identify people as capital assets the same way you list machines. Machines are useful in themselves when efficiency rules, however, people can innovate and adapt where quality is king.
The best practice of Human Capital Management steps up where it can – and where the nature of the work invites – to (1) manage the hiring of the right employees, (2) upgrade their skills, (3) utilize their knowledge to the fullest, (4) motivate performance, and (5) evaluate how they benefit the organization.
Human Capital Management includes the following:
- Recruiting the best talent available
- Developing career plans for employees
- Coaching and mentoring employees
- Motivating employees to deliver their best
- Developing performance management strategies
Using HCM software to do the job
One bad hire can ruin the bunch. Today’s employers are long past the day when one body could simply replace another, when one pair of hands was as good as any other, and when all job seekers appeared the same. When hires are made soundly and intelligently, managers spend less time training and re-training. When an organization knows what it needs, Human Capital Management can recruit the right talent, suited and ready for the system. Orientation, then, moves beyond the static review of policies towards a dynamic introduction to the performance already underway.
- Human Capital Management software facilitates corporate communication vertically and horizontally. Senior management can access and monitor hiring needs and process. Employees can communicate with peers and teammates and track their training and performance. HCM software thereby reduces misunderstanding among interested functions and stakeholders.
- Training builds quality. Well-trained workers perform better than the untrained. Increasing skills and abilities of employees – at all levels – improves the performance and quality of their work. And, because HCM tracks skills, training, experience, and ability, it helps employees become self-sufficient, agile, and adaptable.
- HCM software tracks employee assessments and performance evaluations. It requires management’s full buy-in to regular, consistent, and constructive performance feedback. By making reporting systems available to leadership, they can monitor and value their workforce accomplishments, status, and needs.
Human Capital Management software is a tool that makes Human Capital Management more than theory. It pays respect to employees, clarifies what is expected of them, and raises the bar on their performance.
Strategic HMC
Human Capital Management systems become a strategic reality when they align human capital strategies with the business mission by providing, integrating, and reporting the data required for the planning, analysis, and management of human capital assets.
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