Human Capital Management (HCM)
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Human Capital Management is defined as "A strategic approach to people management that focuses on the issues that are critical to an organization's success"
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Human Capital Management (HCM)
- 1. Human Capital Management Naman Markan
- 2. Agenda 01 Why Human Capital Management? Definition, Values & Functions, HC Timeline, Constituents, Approaches to measurement. 02 Concept of Human Resource Management? Defining HRM, Difference Between HCM & HRM, HCM Glossary. 03 Dimensions of HCM Models of HCM, Talent Acquisition, Talent Management, Human Resource, Recruiting & Selection 04 Economic Benefits of HCM HR Strategies, Models & Tools, HC Practitioner, Industrial view, Future of HCM
- 3. Defining HCM “A strategic approach to people management that focuses on the issues that are critical to an organization's success”
- 4. Why HCM?
- 5. HCM AIM’s 01 03 02 04 To determine the impact of people on business and their contribution to value To provide guidance on future HR and business strategies To demonstrate that HR practices which produce the value for money To provide data that will inform strategies and improve the effectiveness
- 6. HCM Values 01 03 02 04 Honoring our commitments and conduct business in a manner that promotes fairness, respect, honesty, and trust. Promote Honesty, Integrity, and Trust Openness to possibility and foster creativity and risk-taking to support continuous improvement. Embrace Change and Innovation Encouraging the diversity of thoughts, experiences, and backgrounds. Celebrate Teamwork Leading by example and advocate equitable treatment in behaviors, policies, and practices. Model Leadership
- 7. HCM Functions Talent Management • Recruiting • Learning • Development • Performance appraisal • Acquisition Human Resource • Core HRIS • Payroll Benefits • HR Planning Workforce Management • Time & Attendance • Shift Scheduling • Expense management Other • Solution for staffing • Job Analysis • Compensation & Benefits • Motivation and change management
- 8. Human Capital Timeline 2015 2016 2017 2018 2019 • Fair labor practices • Health & Safety • Diversity in work • Workforce demographic • Human rights • Compensation & Incentives • Total headcounts • FTE & PTE • Annual turnover • Employee engagement score • Gender Diversity • OHS Practices • Workers participation in decision making • Workforce compensation welfare • Investment in skills & workers representation
- 9. HCM Constituents 01 03 02Intangible Resources as the factors other than financial & Physical assets. Intellectual Capital Institutionalized knowledge possessed by an organization, i.e. stored in databases, manuals etc. Organization Capital Building relationship in the organization or outside the organization. Social Capital Organizational Intellectual Social
- 10. Approaches to Measurement • Human Capital Index – Watson Wyatt • The Organizational Performance Model – Mercer HR Consulting • The Human Capital Monitor – Andrew Mayo Five major categories:- Impact on MV • Total rewards and accountability:- 16.5 % • Collegial, flexible workforce:- 9.0 % • Recruiting and retention excellence:- 7.9 % • Communication integrity:- 7.1 % • Focused HR Service Technology:- 6.5% People, work processes, management structure, information and knowledge, decision making and rewards plays out differently within the context of the organization. To identify the human value of the enterprise or ‘human asset worth’ = employment cost × individual asset multiplier.
- 11. Agenda 01 Why Human Capital Management? Definition, Values & Functions, HC Timeline, Constituents, Approaches to measurement. 02 Concept of Human Resource Management? Defining HRM, Difference Between HCM & HRM, HCM Glossary.
- 12. Concept of HRM
- 13. Defining HRM “ It is the strategic approach to the effective management of people in an organization, so that they help the business to gain a competitive advantage”
- 14. Difference Between HCM & HRM • Uses simple bench marking techniques. • Host as default body to all the process in group. • Only expose integration of HRM. • Can driven regularly by HR. • Never defines its true objectives. • HR function often delivers a major solution with perfect end. • Work according to the law and company directives. • It is related to all employees’ issues and other elements such as employment, utilization, compensation and development. • Uses complicated evaluation techniques. • Host only default outcome processes. • Only executes interaction of human capital management. • Defines its true objective with perfect reputation. • Can able to deliver solution for minor instances HRM functions HCM functions
- 15. HCM Glossary HCS TM PC CM A business Strategy • Competencies • Motivations • Satisfactions A Talent Management • Mission • Values • Current & Future workforce A Performance Culture • Diverse employees • Compensation A Customer Capital • Name • Contracts • Loyalty • Satisfaction • Testimonials
- 16. Agenda 01 Why Human Capital Management? Definition, Values & Functions, HC Timeline, Constituents, Approaches to measurement. 02 Concept of Human Resource Management? Defining HRM, Difference Between HCM & HRM, HCM Glossary. 03 Dimensions of HCM Models of HCM, Talent Acquisition, Talent Management, Human Resource, Recruiting & Selection
- 18. Andrew Mayo Model Dimensions of Human Capital A B C D E A B C D E Personal capabilities, Professional & Technological know-how, network & range Individual Capability Aspiration, Ambition, Work motivation, productivity Individual Motivation Clarity of vision, Ability to communicate Leadership Values of people, Employees appraisal, innovation & Creativity, Transfer knowledge Organizational climate Supportiveness, Mutual respect, Sharing common goals Workgroup effectiveness
- 19. Conceptual Model By Nick Bontis Human Capital Depletion Human Capital Investment Human Capital Valuation HUMAN CAPITAL EFFECTIVENESS • Voluntary turnover • Involuntary turnover • Total separation rate • Development rate • Training investment • Training cost factor • Compensation revenue & expense factor • Executive & Supervisory compensation • Revenue Factor • Expense Factor • Income Factor • Human Capital ROI
- 20. Three core dimensions of HCM
- 23. Why Careful selection is important?
- 24. Agenda 01 Why Human Capital Management? Definition, Values & Functions, HC Timeline, Constituents, Approaches to measurement. 02 Concept of Human Resource Management? Defining HRM, Difference Between HCM & HRM, HCM Glossary. 03 Dimensions of HCM Models of HCM, Talent Acquisition, Talent Management, Human Resource, Recruiting & Selection 04 Economic Benefits of HCM HR Strategies, Models & Tools, HC Practitioner, Industrial view, Future of HCM
- 25. Economic Benefits of HCM
- 26. HR Strategic Model Strategic human resource management means human resource policies and practices that produce the employees skills and behaviors that are necessary to achieve the company’s strategic goals
- 27. Strategic HR Tools HR Scorecard A process for assigning financial and nonfinancial goals to the HRM related chain of activities required for achieving companies strategic aims. Strategic Map. Graphical tool that summarizes the chain of activities that contribute to a companies success. Digital Dashboard Presented with desktop graphs and charts, so that one can know where exactly company is moving
- 28. Strategic MAPS • Graphical tool that summarizes the chain of activities that contribute to a companies success. • It displays how each dept. performance contributes to achieve the company overall strategic goals . • It helps the manager and each employee visualize and understand the role his/her dept. plays in achieving the companies strategic plan . • It classifies employee the “ line of sight” It does this by visually linking their efforts with the company’s ultimate goals .
- 29. Digital Dashboard Presents the manager with desktop graphs and charts a nd so a computerized picture of where the company stands on all those metrics from the HR sc ore card processes
- 30. HR score card Process of assigning financial and non financial goals or metrics to the human resource management. Many employee quantifies and computerize the strategic map activities, the HR scorecard helps them to do so.
- 31. Human Capital Strategies (HCS) Career development plan • Core values • Core competencies • Performance Improvement Coaching & Monitoring Values Selection Performance Management Human Assets Profile Recruitment
- 32. Benefits of SHCM Strategic Human Capital Management Reduce Cost SHCM Administration Improved Quality & Security One unified platform Increased revenue Reduce Cycle time Increased Market Capitalization
- 33. Human Capital Practitioner Human capital practice require Openness, Empathy Communication & Strategic skills Tools, Methodology Business Acumen Tools, Methodology HRMS (Human Resource Management System) or HRIS (Human Resource Information System). Business Acumen Keenness and quickness in understanding and dealing with a "business situation" in a manner that is likely to lead to a good outcome. Openness, Empathy An important part of empathy is the ability to trust and be trusted. Open-mindedness is understood to be the process of showing receptiveness to new or different ideas Communication & Strategic skills Ability to do analysis of organization communication, demographic analysis, understand modern communication styles and the ability to craft messaging for a global audience.
- 34. HCM Change Management Practices
- 35. Future of HCM HR will be dead by 2020 Changing behavior Work place Technology
- 36. Thank you
Editor's Notes
- Three words Human: we HUMANS right, the mankind, wise man, right Capital: - It can be refers to any product or services which increases the productivity of the organization. For example we all had studied in the school, over the years we gain our attitudes towards the education, creativity and this is all about our capital. Yes these resources, these characteristics are our capital. Human Capital: - See we know that employees are the lifeline of any organization, thus if any organization is investing its money in humans in order to enhance their skills, in return the overall productivity of organization increases. Because employee will be working hard or effectively to achieve certain goals. Now the third term is Management, so may I know what do you all understand the meaning of this word? I know many of geeks like me are fond of this word? So yes any one? Alright planning, organizing controlling, staffing, right? Yes, a systematic process which includes all these activities to achieve a specific goals,
- These are the things which we are going to cover in our presentation.
- And the same way, if we talk about HUMAN CAPITAL MANAGEMENT (Slide 1) So yes, this is an approach a strategic approach which focuses on the critical issues to an organization success.
- (Slide 2) why HCM In HR we only focused on four characteristics Physic, Mind, Spirit & Relp. And these four things is used as the resources for generating profits in HCM. As it was assume that people came up with these characteristics. Therefore HR was more into development side, while HCM was more towards profit centered.
- https://hr.smcgov.org/hr-mission-statement-goals-and-values (Slide 3) AIM’s Point 1: after reading 1st, for example. You have gain some capital, some knowledge, acquired some skills, some are good in photography, some are good in writings, like thus HCM aims to determine the impact of people on business Point 2: They determine those practices which can generate revenue, for example hiring only selected number of employees, training and development, innovation, branding. Point 3: Thus implementing those practices and strategies in context to the future HR. Point 4: Thus focusing on the overall effectiveness.
- https://hr.smcgov.org/hr-mission-statement-goals-and-values After reading, so how you are going to promote honesty and integrity in your business? By keeping your promises, sticking towards the commitments, respecting your employees, by focusing towards the goals. There are many companies, which promote the same thing for example, CEO clear out the picture of what exactly the scenario which company is facing currently, with this employees will not feel blindfolded and cheated. Thus it creates more trust towards the company and CEO. Point 2: Celebrating the team work. There are many diverse background where people are coming from right? Thus if we encourage those individual we will be able to get the different opinion. And as this thing is happing most of the company, if someone has generated a single lead, then they come up with the buzzer sound. Or spoon and plate sound. Point 3: for example previously Facebook, or any other social media was not the part of recruitment. But today due to the change in communication, technology HR are also focusing on the common media to hire people. It indicates the flexibility and openness to the changing world. Model Leadership 4: Do you know who our prime minister is? I am not going to talk about politics here, just giving you an example how his leadership changes the mindset of the people, Previously we use to say Kachre wala, now we respect them and say safai krne wale, viklang > Divyang, previously no one care about chokidars, now even in twitter more than 1 crore people changes there name as main bhi chokidar. So this should be a leadership
- https://www.managementstudyguide.com/human-capital-management-importance.htm now coming back to HCM, They have some functions Point 1: TM helps to find the best talent, choose the right candidate, on board new talent and generate revenues Recruitment process Learning process Development process Point 2: As stated by vineet nayar, CEO of HCL technology, along with Richard Rekhy (CEO of KPMG) that HR will be dead by 2020, he said this thing in the 14th HRM summit @ AIMA on 2016 in Delhi, it’s just because of three mega trends: Changing behavior (physical identities and digital identities). Work place And the last one is Technology this thing I will cover in my last slide. Point 3: Set of process which company uses to optimize the productivity of any employees.
- On 2015 we were focusing on these things only, as we do have only limited access to technology and have different sets of priorities.
- Human capital, the value that the employees of a business provide through the application of skills Structural capital, the supportive non-physical infrastructure, processes and databases information Relational capital, consisting of such elements as customer relationships, supplier relationships.
- These measurements Identify the key areas where we have to focuses and modeling them The key links between human capital and shareholder value creation Thus these practices are the leading indicators of any business. Practices will be covered in further slides. https://books.google.co.in/books?id=7PIJBAAAQBAJ&pg=PA33&lpg=PA33&dq=Total+rewards+and+accountability+Collegial,+flexible+workforce+Recruiting+and+retention+excellence+Communication+integrity&source=bl&ots=6jx5cx7Z1_&sig=ACfU3U19ZcQhKx13_OolOrG2hdIYUdQQIg&hl=en&sa=X&ved=2ahUKEwimp4iBwL_hAhXHXisKHfgTD3sQ6AEwBnoECAsQAQ#v=onepage&q=Total%20rewards%20and%20accountability%20Collegial%2C%20flexible%20workforce%20Recruiting%20and%20retention%20excellence%20Communication%20integrity&f=false
- Till now we have covered the basics, and now my colleague will elaborate further
- https://www.paychex.com/articles/hcm/whats-the-difference-between-hris-hcm-and-hrms
- Cognizant
- As stated by Vineet Nayar, CEO of HCL technology, that HR will be dead by 2020, he said this thing in the AIMA on 2016 in Delhi, it’s just because of three mega trends: Changing behavior (physical identities and digital identities). And there are people who will resist this changes, because they are not open. Work place. There are times when people have a place which is called office, but due to change in environment new things are coming along, work from home, work from coffee shops, work from restaurants are comes into picture. And the last one is Technology. For example now a days you are not hiring a single person, you are hiring there friends, chacha taya fufa, etc. right because everyone is in connected over various social media platforms. You are hiring individual in excess. And Artificial Intelligence. Now you don’t need any specific person to help you out, you can google. And make a decision based on augmented reality. Thus no one want payroll, appraisal systems, attendance correlations all those data analytics which you do you are not predominantly ask to do, it will be opt by software’s.