Wednesday, 1 February 2012

Human Capital – The Intangible Asset

HR Excellence has been a buzz word in the industry for the last two decades or so. Most organisations are in agreement that human capital is presently the most important asset. In an economy driven by this intangible asset, the very survival of an organisation depends on how efficiently workforce performance is managed. What is ironic though is the fact that most organisations falter in implementing practices and processes that lead to HR Excellence. The keyword being “intangible asset” this confusion is understandable. It is always difficult for managers to wrap their heads around an asset which is by nature unpredictable and ever changing. Policies and perks that motivate the workforce in the IT sector may not be able to move employees in the automobile sector. Employees in a start-up are fuelled by challenges that may be unpalatable to the workforce of a large organisation. Within the same organisation employees in different age groups and different functions have unique expectations and motivations.

Practitioners and academicians over the years have conclusively proved that there is immense correlation between good HR practices and organisational performances. Frameworks and strategic performance management tools like the Balanced Scorecard and its variants like Result Based Management started gaining immense popularity in the late 1990s as an effective tool to control, measure and analyse input against expected outcomes. While these frameworks have been widely accepted as valuable tools, implementations of the same have not been uniformly successful, leading to further confusion. A variety of constraints, which include the scarcity of expert resources as well as investments, has also hindered full scale implementation of these frameworks. Within the HR organisation over the years we have seen the development of specialists in Compensation and Benefits, Recruitment and Manpower Planning, Performance Management Systems, Learning and Development, Employer Branding and Strategic HR. Each of these specialities have evolved their own excellence frameworks, and we have seen organisation emphasising on one or more of these areas depending on the direction and business strategy of the company at any given point. The HR community has applauded the growth of these specialists through recognitions and awards at a variety of forums. Experts like Dave Ulrich, Marshall Goldsmith and Mark Huselid have done a fabulous job in championing the cause of best practices in Human Resources and promoting the role of Human Resources as a strategic business partner in the organisation. As it should be, the parameters of excellence in HR remain dynamic in an ever evolving and uncertain business climate, and practitioners will have to grapple with new factors and realities as they try and implement best practices that are customised to their business context and aligned to their organisation strategy.

In this edition of The Human Factor we have tried to make meaning of the term “HR Excellence”. We have spoken to experts in the industry as well as in the academic world to try and define the various facets of excellence in Human Resource Management. We hope and believe you will be able to benefit from their experiences of success and failure while you implement these practices in your workplace. Happy Reading!

1 comment:

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