Vision of Human Capital Management

The pressure on an HR department to create added value to an organization increases. An HR department creates added value as its activities contribute to the achievement of the goal of an organization. For this the improvement of management around an HR department is the point of focus. This requires a business perspective. A business perspective contributes to improving the management of HR activities by aligning them with organizational objectives. This business perspective in the further course of this blog is referred to as Human Capital Management (HCM). From a business perspective, HCM involves improving the management of all business activities that have to do with the human capital within an organization. When devising the image below I was inspired by David Sibbet.
Human Capital Management

Step 1: Determining Vision – A vision provides a visionary and ambitious picture of what an HR department wants to be. In the definition of the vision the HR department looks to the world of today and the future opportunities and describes the desired situation.

Step 2: Aim – briefly worded the strategy is the way resources are used to achieve the vision. By controlling HR activities in a way that they are aligned with the organisational strategy an HR department creates value. An organisation provides added value by excelling in cost leadership, product leadership or customer intimacy. The HR strategy should be geared to this if an HR department wants to create added value. Cost leadership is the continuous ability of an organisation to provide all operational processes, skills and abilities as effectively and efficiently as possible. The HR strategy should help to provide to the lowest price in the market. Product Leadership is the ability to continuously bring new quality products on the market. The HR strategy should help to differentiate themselves from competition. Customer Partnership is the ability of an organization to a long-term continuous relationship with customers at which an organization continuously responds to the needs of the customer. The HR strategy should contribute to the ability to build long-term continuous relationships with customers. Applying HCM contributes to addressing the HR strategy to organizational strategy.

Step 3: Arrange – Tactic is a plan for the deployment of resources and ways to implement a strategy. Control variables such as results, people, resources, structure, culture and chains are needed to ensure a contribution to the HR strategy. However, the strategy determines how control variables are arranged in relation to human capital.

Step 4: Accomplish – Operational control involves the actual implementation of the improvement of the management of HR activities so that growth and change occurs from human capital.

These four steps should eventually lead to the establishment of a HR Business Model Canvas.

The above resulted in the paper ‘A business administration approach to HRM‘.

Don’t hesitate to comment and give me your feedback, suggestions and ideas are welcome too!


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