Running head: HUMAN CAPITAL MGMT
P I5P Human Capital Management Key Assignment
Colorado Technical University
June 22, 2016
Dr. David Gliddon
P5 IP Human Capital Management Key Assignment
Business leaders today know that organizations hold three kinds of resources: financial, physical and human (Huang, Roy, Ahmed, Heng, & Lim, 2002). However, management often overlooks human resources because it cannot give a figure showing the company’s bottom line or net worth, like financial resources can. Nor can it be depreciated, as physical resources can. In fact, it has only been in more recent times, which some call the third phase of industrialization, that the human kind of resources has been given attention as a core competitive advantage (Browne, 2000). The term human capital is used to describe the economic value of an employee’s capacities – education, abilities, experience. It refers to the notion that the quality of an employee can be improved upon by investing in that employee through benefits, training and education (Investopedia.com, 2014). Successful and competitive organizations recognize and appreciate the fact that their employees are an essential asset and contribute to the development and growth of the organization (Brocaglia, 2006). Those same successful companies manage human capital in the most efficient and effective manner possible. The bottom line is that they view their employees as individuals whom they are making an investment in; they are considered assets, not expenses (Brocaglia, 2006). According to DiRomualdo and Martin’s i4cp report on critical human capital issues for organizations today (2013), the top four are managing organizational change, workforce analytics, workforce planning, and performance management. Of course, every organization is different and faces different challenges in the human capital arena.
The development director of global communications and event management company (MCI) reports that their biggest dilemma is whether it is better to hire someone with the talent and experience they require or to train current employees showing high potential, thereby allowing them the mid to long term growth into managerial positions within the company (Sanchez-Arias, 2013). A growing number of Asian companies are expanding into the western territories, opening new branches and merging with or acquiring western companies to further their growth. These companies are in need of executives who can leverage best practices and manage the delicate balance between the eastern and western cultural strengths (Sanchez-Arias, 2013). Yet another concern, from the CEO of a Mumbai, India IT organization, relates to transforming employee knowledge into results. This CEO wants a clear vision of his return on the investment in learning he paid for. The analytics of human capital development can be challenging. Meanwhile, in Spain the human resources director of a global telecom company named Telefonica reports that employee retention, not only within the company but also within the geographical region, has become their greatest challenge. She explains that this challenge goes beyond the current economic crisis in the region; she says it relates to the “new workforce profile” (Sanchez-Arias, 2013). Apparently, employees hired at Telefonica today expect to learn and develop and then will leave after two to three years. In the past, Telefonica successfully retained employees for an average of seven to fifteen years. Therefore, the top priority for this company, and any Latin American company, is to maintain a highly competent and committed workforce. This challenge is also experienced by Chevron, one of the largest oil and gas companies in the world. Chevron has employees who quickly move to other countries with healthier economies. The exception for Chevron is that their employees stay with...
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