Why Select Human Capital Management
In simpler terms, human capital management encompasses the whole concept of employee management which includes hiring the right people, training them, skills upgrading and utilization of such skills and knowledge to the maximum to eventually benefit the organization.
Benefits of human capital management
The right recruitment: The fundamental aim of human capital management is to extract the best out of each and every employee. It also has a critical role in increasing employee efficiency and in, making them indispensable to the organization.
The first step in effective human capital management is talent acquisition – hiring the right people for the right jobs. This, in other words, means hiring employees who actually deserve to belong to the system. No one wants to work near someone with the character of Alan Harper in Two in a Half Men!
Orientation: Once the hiring process is over, it is for HR professionals to arrange for orienting an individual to the company’s existing system and to make him comfortable so that he delivers his or her best.
This is done by putting new recruits through interesting and interactive induction programs that aim to acquaint all new employees with the organization’s aims, goals, and policies. This again is another important function of human capital management.
Human capital management is also a tool of communication: Efficient and standout human capital management allows information to flow freely between seniors and their subordinates.
It gives employees easier access to senior management, thus eliminating communication gaps that usually lead to misunderstandings and confusion. Just watch Harry Solomon and the family in Third Rock From The Sun – they were a mess and Harry was not exactly the brightest being around!
Training & skill development: Management of human capital is also responsible for upgrading the existing knowledge that employees have.
This is possible only by putting them through appropriate training programs that will increase their knowledge and efficiency levels, eventually increasing the organization’s overall productivity. In sum, human capital management strives to make an employee more self-sufficient and adaptable to change.
Performance evaluation: This is vital to calculate the individual contribution of each employee to the organization and to make them more aware of what is expected of them.
Through online reporting, performance evaluation also helps in identifying deviations from set standards for work practices and how corrective measure may be applied to rectify them. It also points out the importance of personality development and soft skills for employees.
Reward & penalty: Any company that implements an efficient system for management of human capital stands to correctly identify those employees who need to be rewarded for their good work through promotions and rewards to increase their motivation levels and loyalty to the organization.
Similarly, it also suggests punitive/corrective measures for erring employees or those committing acts of fraud or embezzlement.