WELCOME

TO
HUMAN CAPITAL MANAGEMENT
PT. Mohamed Niyas
MBA(UK), BBA(Hons/Mar/SEUSL), Dip in Mar(CIM/UK)
Associate Member of CIM/UK
Affiliate Member of CIPM/SL
Visiting Lecturer – SLIATE/SL, OU/SL
Lecturer - UBTC

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 Resources/Capital Required to Do A Business

1. Finance – Money/Investment
2. Product/Service – Items to be sold/given
3. Physical Resource – Buildings/location/Information/Marketing Materials
etc.
4. Human/People – To run/manage/knowledge business

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 What is Human Capital Management (HCM)?

Human Capital Management (HCM) is an approach to employee

staffing that perceives people as assets (human capital) whose current

value can be measured and whose future value can be enhanced

through investment.

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 HUMAN CAPITAL FUNCTIONS

Recruiting

Fairness Training

Human Capital
Management (HCM)
Health and Safety Appraisal

Labor Relations Compensation

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 HUMAN CAPITAL

Human Capital:
The knowledge, skills, abilities and capacity to develop and innovate
possessed by people in an organization.

The term Human Capital has now become common in HR language to

describe people and their collective skills, abilities, experience and potential.

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 Aim of HCM

1. To determine the impact of people on the business and their contribution

to value;

2. 2. To demonstrate that HR practices produce value for money in terms

(e.g. ROI).

3. To provide guidance on future HR and business strategies.

4. To provide data that will inform strategies and practices designed to

improve the effectiveness of HRM in the organization.

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 Human Capital Management is Important for:

• Hiring the right talent

• Orienting him/her to the organization

• Training employees in order to constantly upgrade their skills

• Retaining employees

• Making employees self sufficient and prepare them for adverse conditions

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 Human Capital Example

• Let's look at an example: the Pat Company does not have the
infrastructure to answer customer questions after the sale of their product.
Therefore, they outsource this process to another company. The AVC
Corporation is a call center company that specializes in taking care of
Pat's customers.

• The biggest asset that the AVC Corporation has is its call center
employees. Upper management at AVC spends a lot of time reviewing,
adjusting, preserving, and maintaining their employees - their human
capital.
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 HCM Vs. HRM
In general human capital management (HCM) and human resource
management (HRM) possess many similarities when compared. Human
capital management and HRM deals with the HR department of an
organization. It is the foremost solitary body responsible for carrying the
organizational processes in business environments. Both these terms carry
out functions that are related to issues such as:
• Recruitment.
• Training.
• Employment.
• Orientation.
• Payroll.
• Performance analysis.
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 HCM Vs. Personnel Management

Personnel management is defined as an administrative specialization that

focuses on hiring and developing employees to become more valuable to
the company. It is sometimes considered to be a sub-category of human
resources that only focuses on administration.

• HCM is proactive in nature while PM is reactive.

• HCM is a resource-centred activity whereas PM is a employee-centred activity.
• HCM emphasizes on flexible, open-ended contracts but PM emphasizes the strict observance of
defined rules, procedures and contracts.
• HCM views better performance as a cause of job satisfaction whereas PM considers job satisfaction
as a source of better performance.
• HCM seeks to develop the competencies of the employees on a sustained basis while PM is a
regular, status quo–based administrative function.
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 HCM Significance for An Enterprise.

• Attracting & retaining the required human resource, recruitment & selection ,
placement , orientation, compensation & promotion policies.
• Developing the skills & necessary attitude among the employees by T&D &
performance evaluation
• Providing them social & job security by grievance handling, motivating &
participation in management
• Utilizing effectively the available human resources
• Ensuring that the enterprise will have in future a team of competent & dedicated
employees.

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 HCM Professional Significance.

• Providing maximum opportunities for personal development of

each employee.

• Maintaining healthy relationships among individual & different work

groups.

• Allocating work properly.

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 HCM Social Significance.
Sound human capital management has a great significant for the society. It
help to enhance the dignity of labour in the following ways.

• Providing suitable employment that provides social & psychological

satisfaction to people.

• Maintaining a balance between the job available & the jobseekers in terms
of numbers, Qualification, needs & aptitudes.

• Eliminating waste of human resource through conservation of physical &

metal health
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 HCM National Significance.
• Human resource & their management plays a vital role in the development of a nation. The effective
exploitation & utilization of a nation’s natural, physical & financial resources require an efficient &
committed manpower.

• There are wide differences in development between countries are with similar resources due to differences
in the quality of their people.

• Countries are underdeveloped because their people are backward. The level of development in a country
depends primarily on the skills , attitudes & values of its human resources. effective management of human
resources helps to speed up the process of economic growth which in turn leads to higher standards of
living & fuller employment.

• Human resource Management is the central subsystem of an organization.

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 Who is a Human Resource Manager?

Human resources manager plan, direct, and coordinate the

administrative functions of an organization. They oversee the
recruiting, interviewing, and hiring of new staff; consult with top
executives on strategic planning; and serve as a link between an
organization's management and its employees.

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 Duties of Human Resources Managers

Human resources managers typically do the following:

• Plan and coordinate an organization's workforce to best use employees' talents

• Link an organization's management with its employees
• Plan and oversee employee benefit programs
• Serve as a consultant with other managers advising them on human resources issues,
such as equal employment opportunity and sexual harassment
• Coordinate and supervise the work of specialists and support staff
• Oversee an organization's recruitment, interview, selection, and hiring processes
• Handle staffing issues, such as mediating disputes and directing disciplinary procedures

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 Qualities of an HR Manager

• Knowledge
• Intelligence
• Communication skills
• Objectivity and fairness
• Leadership and motivational qualities
• Emotional maturity and Empathy

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 Why is Human Resource Management Important to All
Managers?

• Hire the wrong person for the job

• Experience high turnover
• Have your people not doing their best
• Waste time with useless interviews
• Have your firm in court because of discriminatory actions
• Have some employees think their salaries are unfair and inequitable relative to others in
the organization
• Allow a lack of training to undermine your department’s effectiveness
• Commit any unfair labor practices

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 What is Strategic Human Capital Management (SHCM)?

Strategic human capital management (HCM) is a people-focused approach to HR that unites a variety
of human resource processes to work as one—from recruiting and onboarding, to payroll and benefits,
to workforce and performance management.

Components of Human Capital Management Strategies

Human capital management combines integrated technology and streamlined HR processes in the
following areas:

1. Recruiting and Applicant Tracking

2. Onboarding
3. HR Management
4. Benefits Administration
5. Performance & Talent Management
6. Time & Labor
7. Payroll
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 Linking SHCM to the Business Strategy

Human Capital strategy seeks to address this by placing the investment and
development of the workforce as a key component of business strategy.

This implies that People Management should be clearly set out in a framework that
allows for a strategic 'fit' and for flexibility in matching changing business
requirements.

It's well worth producing a human capital business plan with a summary of the
organization's human capital strategy.

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Business Strategy and SHCM

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Thank You

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