In today’s business environment, companies need to invest in effective human capital and management techniques. These are tools that will help in managing workforce plans, fostering satisfaction, and meeting regulatory requirements. This essay analyzes Organization X’s current misfortunes with regard to poor human capital management (HCM) techniques. It will address the value and importance of appropriate employee management repairing Organization X’s current health.
Armstrong & Baron (2007) define human capital as the measure of an employee’s economic value using their skill set. The skills include career competence, creativity, interpersonal attributes, and general knowledge. The author asserts that both individuals and organizations can invest in human capital through education, continuous training, and fostered benefits (Armstrong & Baron, 2007).
There are several reasons how investing in human capital can result to organizational improvement. First, like any other investment, employees require constant educational and skill upgrades. Such advances make them fully aware of new developments hence opening them up for great ideas. Organizations that invest in their human capital commit to helping them develop new skills through higher education opportunities. Eventually, they will realize significant returns through an increase in their overall performance.
Second, employees always go out of their way when proving their worth to the senior management. Thus, an organization that invests in its human capital always helps every employee meet their objectives. Last, organizations with excellent human capital approaches always value the importance of teamwork. Teamwork not only fosters employees’ information sharing and efficiency, but also an environment for innovation. Indeed, organizations that encourage the existence of collaborative environments perform better than their lone-centered competitors. This is because their employees are always alert when determining the best ways to solve the tasks at hand (Armstrong & Baron, 2007).
Ingham (2012) defines HCM as the effective management, hiring, training, and upgrading of employees in a way that optimally utilizes their skills to the benefit of the company. It is a human resource technique, which, when applied to Organization X, will change how the senior management views their employees. They will, instead, recognize them as important assets whose value can be optimized through continuous investment. Since employees dedicate most of their time towards company operations, they possess the power to make or break Organization X. Indeed, employees are the organization’s most vital capital (Ingham, 2012).
The following are three reasons why Organization X must appropriately manage its human capital both domestically and globally. First, HCM is important for recruiting, training, managing, and retaining high quality workers. This shows that appropriate HCM will ensure that the human resource department recruits and retains only those individuals that deservingly belong to the organization. Second, HCM ensures that the organization effectively orients new workers into their functional system. This leads to the realization that Organization X may have been engaging in meaningless and boring employee induction programs. It is such mistakes might have resulted to situations where employees lost their interest in company operations thus poor performance. Lastly, HCM ensures that employees have the adequate time to adapt to dynamic business environments. This, in turn, assists in training, motivating, and developing employees into imperative resources to the organization (Ingham, 2012).
In conclusion, the above discussion reveals the importance of both human capital and appropriate human capital management. For instance, organizations that value and invest in their human capital are bound to realize increased returns following an improvement in overall employee performance. Similarly, organizations that practice appropriate human capital management tend to recognize employees as crucial assets whose returns they can optimize through continuous investment. Indeed, as their most vital capital, employees have the ability to make or break Organization X.
References
Armstrong, M., & Baron, A. (2007). Human Capital Management. London, UK: Kogan Page Publishers.
Ingham, J. (2012). Strategic Human Capital Management. London, UK: Routledge.
