HR Strategy Best Practice Using Human Capital Management to Discover & Invest in the Value & Impact of People in Your Workplace
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1 HR Strategy Best Practice Using Human Capital Management to Discover & Invest in the Value & Impact of People in Your Workplace Lizabeth Kleintop, Ph.D. Associate Dean of Business and Management Programs Comenius Center for Continuing and Graduate Studies
2 Fourthly, of the acquired and useful abilities of all the inhabitants or members of the society. The acquisition of such talents, by the maintenance of the acquirer during his education, study, or apprenticeship, always costs a real expense, which is a capital fixed and realized, as it were, in his person. Those talents, as they make a part of his fortune, so do they likewise that of the society to which he belongs. The improved dexterity of a workman may be considered in the same light as a machine or instrument of trade which facilitates and abridges labor, and which, though it costs a certain expense, repays that expense with a profit. Smith, Adam: An Inquiry into the Nature And Causes of the Wealth of Nations Book 2 Of the Nature, Accumulation, and Employment of Stock; Published 1776 Adam Smith ( )
3 Top 30 Global Company Key Performance Metric Comparison ( ) Higgins, J. (2011). Human capital financial statements. Marina Del Rey, CA: Human Capital Management Institute, p. 3.
4 Roadmap Define human capital management (HCM) HCM and current HR practices HCM and metrics HCM & the balance sheet
5 Human Capital Knowledge, skills, and abilities of people working in an organization Intelligence Skills Expertise Brought to bear through Learning Changing Innovating Creativity
6 Elements of Human Capital Intellectual capital Social capital Organizational capital
7 Significance of Human Capital 1. People are assets to the organization 2. Investments by organization in people generates returns Human capital constitutes a key element of the market value of a company People add value in organizations
8 HCM AND HR PRACTICES
9 Key Questions Raised by HCM What are the key performance drivers that create value? What skills do we have? What skills do we need now and in the future to meet our strategic aims? How are we going to attract, develop and retain these skills? How can we develop a culture and environment in which organizational and individual learning takes place that meets both our needs and the needs of our employees? How can we provide for both the explicit and tacit knowledge created in our organization to be captured, recorded and used effectively?
10 Measure HCM and Talent Management External Hires Evaluate Plan Acquire Business Strategy Human Capital Strategy Retain Traditional Contingent Engage Align Business Results Lead Develop Deploy Internal Mobility Forman, D. C. (2011). The global state of talent management. In L. A. Berger & D. R. Berger (Eds.), The talent management handbook, 2 nd ed. (pp ). New York, NY: McGraw Hill.
11 HCM BEYOND HR
12 Why measure HC? Human capital is a key component of market worth People add value and assessing this value is a basis for HR planning and monitoring Identifying metrics, collecting and analyzing data focus attention on what needs to be done to find, keep, develop, and make the best use of HC Measurements monitor progress in achieving HR goals You cannot manage unless you measure.
13 Human Capital Impact Statement Summary Higgins, J. (2011). Human capital financial statements. Marina Del Rey, CA: Human Capital Management Institute, p. 8.
14 Human Capital Headcount Deployed Higgins, J. (2011). Human capital financial statements. Marina Del Rey, CA: Human Capital Management Institute, p. 11, 12.
15 Total Workforce Productivity Impact Formula and Components Higgins, J. (2011). Human capital financial statements. Marina Del Rey, CA: Human Capital Management Institute, p. 9.
16 What does this tell you? Workforce value increases over time The workforce creates value far greater than it creates cost Certain job roles create more organizational value than others Training costs are more of an investment than an expense
17 What is your gain using HCM? Greater transparency A method for valuing knowledge capital Improved investment decisions A methodology for quantifying workforce impact on financials
18 Questions?
19 Contact Me Lizabeth Kleintop, Ph.D. Associate Dean of Business and Management Programs Comenius Center for Continuing and Graduate Studies t: f: Main Street Bethlehem, PA
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