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Human Capital Management

By HWA | Publish On: December 27, 2012 | Posted In:

Human capital management is one of the emerging branches in human resources. Human capital is the accumulated worth of education, experience and skills present in employees which can be rented out to employers. The presence of skilled human capital today gives an edge in a cut throat competition, given the similar material capitals. It is the human creativity and ingenuity that has been playing a key role in designing new products and services and not the actual capital or the ‘smart’ machines.

Human capital is regarded as an important element of intangible assets in an organization. Other intangible assets which we are familiar with include patents, copyrights, customer relations, brands, good will and company image. We must understand that all these intangible assets except for human capital are only possible due to the presence of human capital. Without human capital, the other intangible assets are impossible, at least now.

These are just reasons to boast about. It is far easy to be said than done. Achieving the highest human capital efficiency is the dream of almost all organizations, even not for profit organizations. In other words, human capital is viewed as the bridge between the human resource policies and the business performance in terms of productivity put in by each employee in an organization.

Achieving excellence human capital management and in performance is not a onetime task, but it is an ongoing task. An organization must always try to achieve the higher productivity at the lower or stable costs, as there are no upper limits. This can be achieved when the employees in the organization are highly motivated. One important thing that managers must remember is that motivation is a state of mind and not all the employees are fully motivated all the time. So, there must be a constant motivation from the employer’s side.

A nation with population can turn majority of that population into human capital by imparting education, skill and there by experience. This is not a feat which can be achieved in a day or two, but it requires proper planning from the government by establishing schools, colleges and universities.

Here, one must understand that there is a difference between human capital and labor. While the former is concerned with skill, ingenuity and expertise, the latter is concerned with hard physical work.

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