THE HUMAN CAPITAL

FRAMEWORK

Prof. Jann Hidajat Tjakratmadja

EXECUTIVE BANDUNG
 REFLECTION
1. People are the only element with the inherent
power to generate value. All the other variables
offer nothing but inert potential. By their nature,
they add nothing, and they cannot add anything
until some human being leverages that potential
by puting its into play (Jac Fitz enz – The ROI of
Human Capital, 2000, p. xii).

2. After a view years away from their MBA

programmes, most managers report that they
wish they had focused more on people
management skills while in school (Margaret
Wheatly, Leadership and New Science, 1994 p. 144).
Values of Knowledge Assets (Intangible Assets)

3
 INTRODUCTION:

WHAT IS HUMAN CAPITAL VERSUS

HUMAN RESOURCES?

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PEOPLE IN ORGANIZATION EVOLUTION
PEOPLE MGT EVOLUTION

HC Customer

HC Strategy

HR Practice

Administration Focus

TIME
a. Knowledge is information that changes something
or somebody —either by becoming grounds for
action, or by making an individual (or an
institution) capable of DIFFERENT or MORE
EFFECTIVE ACTION.” — Peter F. Drucker, in: The New
Realities.
b. Justified belief that increases an entity’s capacity
for EFFECTIVE ACTION (Ikujiro Nonaka, Organization
Sciences, 1994).
c. Knowledge is a CAPACITY TO ACT (Karl – Eric Sveiby,
The New Organization Wealth: Managing and Measuring
Knowledge Based Assets, 1997)

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 Knowledge (tacit and/or
explicit knowledge) which are
embedded in KNOWLEDGE
WORKERS, is the most
important and significant asset,
need to be manage.

a. Explicit Knowledge = documented in print or audio-

visual material or encoded in databases
b. Tacit Knowledge = not articulated, not documented
or not encoded knowledge.
c. Tacit : Explicit = 80% : 20%
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 HUMAN CAPITAL
1. The human capital idea centers on viewing
PEOPLE AS CAPITAL whose value to an
organization can be enhanced through
INVESTMENT IN HUMAN DEVELOPMENT.
2. As with any investments, an organization’s goal
is to MAXIMIZE THE VALUE OF ITS PEOPLE to
INCREASE ORGANIZATIONAL PERFORMANCE
CAPACITY,

3. And thus its VALUE TO CLIENTS AND

STAKEHOLDERS, while managing the related
COSTS AND RISKS
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WHY LEARNING/LIVING COMPANY?

INNOVATION
CONTINUOUS LEAN
IMPROVEMENT MANUFACTURING

BUSINESS
COMMITMENT PROCESS
JUST IN TIME TO
PEOPLE LEARNING REENGINEERING

SIX SIGMA BENCHMARKING

CHANGE TOTAL QUALITY

MANAGEMENT MANAGEMENT

LEARNING AS A BASIC OF TRUTH

8 Competitive Challenges Ahead
1. Globalization
2. Value Chain for Business Competitiveness and
Human Capital Services
3. Profitability Through Cost and Growth
4. Capability Focus
5. Change, Change, and Change Some More
6. Technology
7. Atracting, Retaining, and Measuring
Competence and Intellectual Capital
8. Turnaround is Not Transformation
 … THE REAL QUESTION IS:

"How can HC create value

and deliver results?"

HC creates value by engaging in activities

that produce the employee competencies
and behaviors the company needs to
achieve its strategic goals.
 Human Resources Framework
WORK LOAD
VISION ORGANIZATION JOB ANALYSIS
ANALYSIS
FORMATION
HUMAN
BUSINESS RESOURCES
PROCESS MAIN JOB
MISION FUNCTION QUALITATIVE FORMATION & MANAGE
QUANTITY
VALUE CHAIN MENT
JOB
PORTO FOLIO DESCRIPTIONS SYSTEM
QUANTITATIVE
STRATEGIC ORGANIZATION JOB
STRUCTURE &
SHAPE
REQUIREMENT

ADMINISTRATIVE HUMAN RESOURCES MANAGEMENT SYSTEM

GOOD CORPORATE GOVERNANCE

RECRUITMENT REPLACEMENT SAFETY

PERFORMANCE PENSION /
& & REMUNERATION & DEVELOPMENT AUDIT
EMPOWERMENT
APPRAISAL LAYOFF
SELECTION HEALTH

WORK CAREER
RECRUITMEN PERFORMANCE SALARY SAFETY & PLANNING
HUMAN PENSION/
RELATIONS
SYSTEM SYSTEM APRAISAL SYSTEM HEALTH SYSTEM RESOURCE LAYOFF
SYSTEM SYSTEM AUDIT SYSTEM
SELECTION DEVELOPMENT
REPLACEMENT BENEFIT SYSTEM
SYSTEM SYSTEM
SYSTEM REWARD & SYSTEM “PURNA
PUNISHMENT KARYA“
MUTATION SYSTEM FACILITY HRM INFORMATION
SYSTEM SYSTEM SYSTEM SYSTEM

COMPETENCE BASE
 Conclusions??
• Group-1: ?

• Group-2: ?

• Group-3: ?

• Etc
 Dealing effectively with HC
issues is essential for all
managers.

The HC staff supports all managers

in carrying out HC responsibilities
that produce the employee
COMPETENCIES and BEHAVIORS the
company needs to achieve its
ORGANIZATIONAL CAPABILITIES.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved.

THANK YOU!