What Is Human Capital Management?

Human Capital Management (Human Capital Management, HCM) Human capital management is not a brand-new system, but is based on human resource management. It combines the two major analyses of "human" management and economics and "return on capital investment". Dimensions, invest and manage people in the enterprise as capital, and adjust management measures in a timely manner based on changing human capital market conditions and investment returns to obtain long-term value returns.

Human capital management

Human Capital (HCM

Human capital management is

according to

Human capital management and human resource management

Management scientist

Manpower

Human capital management system

No matter how new the concept of this management is and how advanced the theory is, its focus is inseparable from the focus on people, but human capital management emphasizes investment and return on "people". Different people have different personalities, knowledge, and abilities, and different positions have different responsibilities and requirements. As human capital management objectspeople with personality in different positions naturally have very different characteristics. Therefore, in the practice of human capital management, enterprises must adopt differentiated management solutions based on the characteristics of the management object, so as to maximize the return on human capital investment and maximize the release of organizational effectiveness. People-oriented, grasping the essence and classified management are also applicable to human capital management.

Human capital management grasps the essential differences and divides the enterprise human capital into four categories

(1) Core human capital

Executives are the direct controllers of corporate human capital and the core human capital in the enterprise. Executives are at the core of corporate value creation from beginning to end, and play a key or even decisive role in the formulation of corporate human capital management strategies.

(2) Key human capital

Key personnel in key positions. The key links in the enterprise value process have a significant impact on the company's return on physical capital investment. In the key links, what really generates value is the key personnel in the key link posts.

Key human capital is not static. Different industries have different key human capital. For example, senior technical R & D talents are the key human capital of high-tech companies, but they do not necessarily have their place in real estate development companies. The characteristics of different stages of enterprise development will change key human capital. Also take real estate development enterprises as an example: in the stage of high capital shortage, financing talents are naturally the key human capital of the enterprise; at the stage of relatively abundant capital, excellent investment planning and marketing planning talents have become critical human capital.

(3) Potential human capital

That is, human capital with investment potential. At present, it is not the key human capital, and it has talents with strong training potential or playing an important role in the future development of enterprises. For example: high-potential leadership reserve talents, R & D talents in the field of potentials of knowledge-based enterprises, and professionals in future hot markets.

(4) Basic human capital

Those who ensure the return of basic operations and basic values of the enterprise. This is the majority of the enterprise and the basis for its smooth progress. Such personnel are more passive in the face of change, and it is difficult to adapt to the requirements of new job skills. Problems such as transitional employment difficulties, high personnel turnover, and employment panic will occur.

Various types of human capital are not clear-cut, and may transform between each other. For example, potential human capital rises as key human capital, and key human capital rises as core human capital. The conditions and timing of various types of human capital transformation are often the focus of human capital management. Human capital has transformed, and talent management strategies should change accordingly.

Human capital management adopts different management strategies to give play to the effectiveness of various human capital

(1) Core human capital: For core human capital, the most critical strategy is to play its role in the planning and control of corporate human capital. On the one hand, we ensure that we participate in the formulation process of core human capital management policies and fully express our opinions on corporate core capital investment policies; on the other hand, we ensure that they play a decisive role in the formulation of other types of human capital management. The powerful intervention of high-level personnel has greatly improved the efficiency of the use of corporate resources and released the potential of the enterprise. Otherwise, the excess surplus value of human capital is only a potential possibility. Therefore, ensuring the participation of senior management is the maximum investment in core capital.

(2) Key human capital: Key human capital has the advantages of knowledge, skills, and experience. The market price is often high and the demand in the industry is strong. Therefore, the investment in recruitment, incentives, and training is relatively large. Many companies are afraid to pay for this, but from the perspective of return on capital investment, high investment in key capital is very cost-effective, because the return (especially the medium and long-term return) will be far beyond the original investment; and, Effective knowledge management can transform individual knowledge, ability, and experience into the accumulation of knowledge wealth of the enterprise, which can be used to improve the overall human capital level and produce internal value-added effects.

Human capital management deduces the operational characteristics of human capital management from all aspects

(1) Recruitment selection

From the perspective of human capital management, recruitment selection is to determine the object of investment, and select the "right person" to do the "right thing." Human capital management emphasizes the two-way matching of people and positions, considering not only whether people are suitable for the needs of the post, but also whether existing jobs and development prospects can meet the needs of people. Only in this way can employees have higher job satisfaction, avoid occupational exhaustion and high turnover rate, give full play to the enthusiasm and initiative of employees, and maximize the value creation.

At the same time, from the perspective of human capital management, in addition to focusing on the existing knowledge and skills of investment targets, recruitment selection also pays more attention to its value-added potential and added value. Need to analyze and judge: whether you have good learning ability, whether knowledge and skills have growth potential, whether you can add value to the original experience through training, and whether it can bring other added value to the enterprise, such as good work style. This gives new meaning to recruitment selection.

(2) Education and training

One of the characteristics of human capital is that it can continuously gain value through the improvement of human knowledge and skills. Therefore, the main way for companies to invest in their own human capital is to provide appropriate education and training for various types of human capital, improve the necessary knowledge, skills and techniques, and give higher value creation capabilities to obtain more investment. In return. According to the characteristics of different types of human capital, the emphasis of training should be different. For basic human capital, the training focuses on skill-based and knowledge-based training that is closely related to the actual work; for key human capital, the training content should have certain foresight. In addition, for different types of human capital, enterprises also have different investment in training, leaning towards human capital that can bring greater value added. In terms of per capita training input, roughly the core human capital is the largest and the basic human capital is the smallest.

(3) Performance management

From the perspective of human capital management, performance management focuses more on motivation than punishment. At the same time, performance results serve as a feedback indicator of investment efficiency. Through continuous and regular analysis, human capital investment strategies are continuously adjusted. Therefore, when formulating performance indicators and assessment methods, it is necessary to consider the type of human capital of employees and the status of the company's investment in it, and to focus on the assessment standards. For example, for employees who have just completed vocational skills training, they must put forward relatively higher requirements in terms of performance output and work efficiency indicators, which not only leads employees to apply training content, but also ultimately measures the effectiveness of training.

(4) Incentive feedback

Unlike physical capital, the carrier of human capital is the person, which determines that the exertion of human capital is closely related to the characteristics of the person itselfpeople need material incentives and spiritual incentives, they need a sense of belonging to the environment, and they need the recognition of others or organizations. Need for self-realization and development. Therefore, on the one hand, human capital management is people-oriented, respects and trusts people, and is committed to building an organizational atmosphere in which people do their best; on the other hand, for different types of human capital, targeted management, incentives and development are performed to maximize the improvement Return on investment. For example, the potential human capital is focused on providing a good development space for it; the key human capital is focused on ensuring that it obtains competitive and attractive returns. ^[1-2]