The Role of Senior Leadership in Talent and Human Capital Management Part 1 Sep20

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The Role of Senior Leadership in Talent and Human Capital Management Part 1

Human resource management have evolved over the past decade. There needs to some evaluative standards for HR and talent management.

Anton S. Wahjosoedibjo of PEN Consulting shares his thoughts about The Role of Senior Leadership in Talent and Human Capital Management in a presentation.

We will dissect the different parts of his presentation and present the first part in this article.

To view full article, click on the link.

http://www.penconsulting.com/documents/Paper_Senior_Leadership_Role_in_HCM.pdf

The management of human resources in business and public organizations has evolved with growing trend toward still giving more attention to the intangible people aspect but simultaneously also addressing the tangible value of human resources. Human Capital Management is the manifestation of the philosophy stating that people is the most important asset of the organization. However, differs from other physical assets, such as machine and money, the value of people grows through its productive life by its own initiatives and through proper maintenance and development processes.

The introduction of competency standards and competency matrices in place of job descriptions and the rise of Competency Based Human Resource Management in the 1980s reflected efforts to develop measurements of the value of human capital. Competency matrix provides measurement tools for various human resource management activities such as training and development gap analysis, recruiting, placement, relocation, promotion, successor planning, performance evaluation, salary and benefit survey and benchmarking, outsourcing and required consultancy services. The same measurement can be used to support the valuation of human capital in term of its financial value. This will help corporate business and financial leaders to develop appropriate procedures, based on prevailing regulations and best industry practices, to valuate their respective human capital and book the corresponding monetary values in the balance sheets, profit and loss statements, and corporate wealth.

Salary and wages, costs for training and development, and other costs for recruiting, maintenance and development of people should be considered as investment to increase the value of the most important asset of the organization, the corporate human capital. Of course in order to provide appropriate and legitimate justification for the investment, there should be certain threshold to be met, such as return on investment, payout time, and perhaps also “virtual” cashflow.

If not already done so, perhaps there should be joint efforts among human resource (HR) and information technology (IT) professionals and professional accountants to establish standards and coding system for monetizing human capital which are acceptable to the business community.

Personnel competency in conjunction with industry accepted competency standards can be used to establish valuation of each individual that build up the human capital value of an organization. Individual competency can be enhanced to add value through investment in individuals in the form of education, training, and other personnel development means. The effectiveness and success of the investment in human resource development will get even better if it is done in accordance with their respective individual talent. For example, to get a competence master mechanic from within the organization, we should start with seeking or identifying a person
with mechanic knack or talent and then exercise appropriate training and development to enhance his/her competency to become a master mechanic.

Talent Management in essence involves finding or indentifying the right talents and developing those talents into personnel competencies needed by the organization to have highly efficient and high performance human capital. The high performance human capital in turn adds values, productivity and marketability to the organization as such that it has to be well maintained through out its productive life and given appropriate recognition when they are retired. It is in this respect that addressing the “people” issues becomes utmost importance.