Human Resource Management PDF

The Strategic View of Human Resources Employees are human assets – Increase in value to organization and marketplace when investments of appropriate policies & programs are applied Effective organizations recognize that employees have value – Much as organization’s physical & capi...

The Strategic View of Human Resources Employees are human assets – Increase in value to organization and marketplace when investments of appropriate policies & programs are applied Effective organizations recognize that employees have value – Much as organization’s physical & capital assets have value Employees are valuable source of sustainable competitive advantage  Sources of Employee Value Technical Knowledge – Markets, processes, customers, environment Ability to Learn and Grow – Openness to new ideas – Acquisition of knowledge & skills Decision Making Capabilities Motivation Commitment Teamwork – Interpersonal skills, leadership ability  Adopting an Investment Perspective Determines how to best invest in people Costs – Out-of-pocket – Opportunity Human assets become competitive advantage Required skills become less manual, more knowledge-based Appropriate, integrated, strategy-consistent approach is needed  A Dilemma Failure to invest in employees causes – Inefficiency – Weakening of organization’s competitive position Human assets are risky investment Require extra effort to ensure that they are not lost  Research Findings HR practices directly related to profitability & market value Primary reason for profitability: – Effective management of human capital Integrated management of human capital can result in 47% increase in market value Top 10% of organizations studied experienced 391% return on investment in management of human capital  HUMAN RESOURCE METRICS Wall Street analysts still generally fail to acknowledge human capital in assessing the value of an organization and the effect that human resources can have on stock price This is rooted in the fact that there are no “standard” metrics or measures of human capital, much as there are for other organizational assets