Human capital management

Any company that wants to achieve great success needs to pay close attention to human capital
management. The employees of a company are the biggest asset it has and by keeping that asset strong,
the company has the best chance of success. A company that pays little attention to its employees will
end up with a team of employees who are unmotivated and unproductive. Human capital management
can be the difference between a company with a winning team of employees all pulling together toward a
shared goal, and a demoralized group who are providing little overall value.

It is important that each and every member of the team is considered as an individual, each with their
own set of strengths and weaknesses. Human capital management assumes that any lack of knowledge
amongst the employees of a company is purely down to lack of training or teaching, rather than looking
upon it as a fault of an individual or a team.
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Human capital management provides a strategic approach to managing staff at a company. It differs from
traditional HR practices as it is concerned less with administrative tasks and procedures and focuses
more on getting the most out of staff for a happy and productive team. Companies who currently do not
have any type of human capital management program in place should think carefully about implementing
one. The employees benefit greatly from human capital management which in turn means the company
benefits greatly too.

The approach to managing and organizing employees through a human capital management program is
done in a number of ways. In essence, the approach should provide a fully inclusive strategy from even
before a new employee is hired right through to their exit. Another important part of human capital
management is succession planning and talent management. Being able to identify key members of staff
as possible future managers can make the decision making process for current senior management more
straight forward, and allow for greater ease with forward planning.

Key Differences Between Personnel Management and Human

Resource Management

The following are the major differences between Personnel Management and Human
Resource Management:

1The part of management that deals with the workforce within the enterprise is known as
Personnel Management. The branch of management, which focuses on the best
possible use of the enterprises manpower is known as Human Resource Management.
2Personnel Management treats workers as tools or machines whereas Human Resource
Management treats it as an important asset of the organization.
3Human Resource Management is the advanced version of Personnel Management.
4Decision Making is slow in Personnel Management, but the same is comparatively fast in
Human Resource Management.
5In Personnel Management there is a piecemeal distribution of initiatives. However,
integrated distribution of initiatives is there in Human Resource Management.
6In Personnel Management, the basis of job design is the division of work while, in the
case of Human Resource Management, employees are divided into groups or teams for
performing any task.
7In PM, the negotiations are based on collective bargaining with the union leader.
Conversely, in HRM, there is no need for collective bargaining as individual contracts
exist with each employee.
8In PM, the pay is based on job evaluation. Unlike HRM, where the basis of pay is
performance evaluation.
9Personnel management primarily focuses on ordinary activities, such as employee hiring,
remunerating, training, and harmony. On the contrary, human resource management
focuses on treating employees as valued assets, which are to be valued, used and
preserved.

What is the difference between HRD and HRM?

HRD and HRM are both practices that deal with human resources of a company. Usually
in large organizations, there exists entire departments dedicated to HRM where trained
professionals work together solely towards the amelioration of this aspect, dealing with
both HRD and HRM functions. HRD is human resource development. HRM is human
resource management.

HRD deals with functions such as performance development and management,

training, career development, mentoring, coaching, succession planning, tuition
assistance, key employee identification, etc. HRM deals with functions such as employee
training, recruitment, performance appraisals as well as duly rewarding the employees.

HRD is a part of HRM. HRM deals with all HR initiatives while HRD only deals with the
development factor.

HRM functions are more formal than of HRD functions.