Human Capital: Skill sets, knowledge and experience of human resource put to effective use to increase productivity. The term capital indicates the resource value of humans in which organizations invest their time, energy and money.
The much pondered subject in recent times in big corporate organizations is about managing human capital.
Human capital is a collective term comprising knowledge, experience, expertise and skills of human resource that comes as a package.
Organizations are more than ready to invest their time, energy and money to augment their personnel potential, as time and again it has been proved to be the wisest investment in terms of risk and return.
Human resource is undoubtedly an invaluable asset whose absolute empowerment proves to be constructive for the organization.
The human resource department is accountable for man power planning, recruitment and selection, training and development, framing suitable policies and procedures concerning compensation, communication and evaluation or appraisal.
The personnel department has to be in line with the industry standards in terms of pay, welfare and security measures and rewards. Bench marking is the key factor that takes the organization to the next level.
The characteristic features of an efficient organization would include the following:
The critical factor that makes a difference in most of the organizations revolves around the relationship between the union and management.
The top level should be considerate enough in listening to the grievances of the work force and finding suitable measures to solve the problems right away.
Total quality management (TQM) is possible only when employee participation is accepted and approved of. In countries like Japan, Quality Circles are formed by the work group to review bottleneck situations and thrash them out in no time.
Human Resource – The Prime Asset:
Nothing comes for a song! It is but natural that corporate organizations expect a lot in return for the time and money invested in human resource in the form of training and development.
They are at a severe loss if the required productivity is not achieved. Desired scale of productivity brings down the overhead costs without a doubt.
The management should aim to reduce employee turnover, absenteeism and attrition to economise the cost of production, creating a tactical advantage for the company in the long run. Highly satisfied and motivated workforce is a result of well-organized and competent personnel system.
Development of Workforce:
Business firms show genuine concern for the development of their workforce by creating an informal atmosphere assisting free flow of communication. An open door policy followed by the superiors is also a welcome gesture that will reinforce the roots of superior-subordinate relationship.
The point is, functional areas are formed only for the purpose of understanding and analysis and the ideal fact is that there is no such demarcation and all the functional areas have to work in tandem to create a holistic effort that has a direct influence on the growth of an organization.
Points to ponder:
Employ human capital as a strategic measure to out smart your rivals or competitors by providing them with the right kind of training and hone their attitude to achieve the objectives of the organization.