TINJAUAN BUKU

HUMAN CAPITAL MANAGEMENT

( WASKITO S. )
 The elements of Intelectual Capital :
1. Human Capital : the knowledge, sklills, abilities and
capacity to develop and innovate possessed by people in
an organization. HC issues concerning the attraction,
retention, development and reward of people in order to
create and maintain a skilled, committed and well-
motivated workfoce.
2. Social Capital : the structures, networks and procedurea
that enable those people to acquire and develop
intellectual capital represented by the stocks and flows of
Angela Baron, Michael Armstrong

knowledge derived from relationships within and outside

Human Capital Management :

the organization. SC considerations relating to the design

and development of organizations that enhance the
processes of developing, capturing and disseminating
knowledge.
3. Organizational Capital : the institutionalized knowledge
possessed by an organization that is stored in databases,
manuals, etc. OC issues concerned with knowledgw
management.
The four Fundamental objectives of HCM are to :
1. Determine the impact of people on the business and their
contribution to shareholder value
2. Demonstrate that HR practices produce value for money in terms,
(ROI).
3. Provide guidance on future HR and business strategies
4. Provide diagnostic and predictive data that will inform strategies
and practices designed to improve the effectiveness of people
management in organization.
 Drawing
Conclusions Using
Talking Reporting the about the Conclisons as
significance of a guide to
Measurements Measurements the
Measurements
future action

Sumber : Human Capital Management, Angela Baron, Michael Armstrong

 Drivers Process Outcomes
Identify the Determine Identify the
needs of the the process outcome
business measures
and relate
them to the
business
drivers

Time

Sumber : Human Capital Management, Angela Baron, Michael Armstrong

 Strategic Human Capital Management (HCM) :

Is not just a measurement focused approach to Human Resource
Management (HRM).

It is certainly not a decision science in which people can be
managed as a result of quantitative analysis and financial
valuation.

In fact, it is probably more of an art than a science and is a way
of leading people to unlock great business performance.

 Strategic HCM focuses all people management and development practices on

maximizing the capability and engagement of the people working for an
organization to create valuable intangible capability, human capital, which
enables the organisation to take full advantage of potential business opportunities.
 Unlike HRM which focuses on getting closer and closer to the business, strategic
HCM draws its energy from people, from their individual strengths, interests and
motivations, which, aligned with long-term business strategy, can increasingly
provide the main basis for differentiation and competitive advantage.
 However, the perspective also recognizes that measurement is important, and
the book outlines an approach to measurement which recognizes the
importance of knowledge, complexity, best fit and intangibility.
 Pulling together seemingly disparate strands of thinking, the book calls for a
paradigm change in which people really are seen as an organisation's most
important asset, and are managed in a way that reflects this fact.
 The text includes case studies from leading private and public sector
organizations and commentary from HR practitioners and academics :
 Outlines the key attributes of a strategic approach to HCM and captures
these within a scorecard (the HCM Value Matrix).
 Provides a process for managing human capital using the scorecard (the
Strategic HCM Planning Cycle).
 Includes case studiesfrom leading organizations and commentary from HR
practitioners and academics.
 Evidence of the Impact
Practices Firm Performance

• Rigorous selection • Market share

• Internal career opportunities • Shareholder profit
• Formal training systems • Productivity
• Appraisal measures • Capital market measures
• Profit sharing / merit pay • ROA/ROE
• Employment security • Relative performance
• Voice mechanisms
• Job definition / determination
of work / employee
involvement
 Evidence of the Impact
Sears Service Value Chain
Employee Customer
Value Added Recommendation
Helpfulness
Commitment Service
to Role Expected
Public
• Revenue
• Costs
• Audit

Strategic Employee Customer Commercial

Challenges Behaviour Impact • Return on
Assets
• Operating
Margins
• Revenue
Growth
Competence Offering
in Role Value
Perceived
Employee Customer
Misbehaviour Loss
Charles Handy: Sigmoid curve

Decline

Maturity

Growth

Inception
 The changing basis of
competition
Organisation Capabilities

Core Competencies

Competitive Positioning
 The changing basis of
competition
Maximise Share
Owner Value

Financial
Financial Expand Share of
Worldwide Beverage Increase Volume
Manage Cost, Profit & Sales
Capital Effectively

Achieve Pervasive Drive Brand Preference Be Perceived by Consumers

Customer
Customer Continuously Optimise
Penetration as Having the Best Value

Marketing Spending Partner Effectively

with Customer to Fulfil
Demand
Ensure Highest
Quality in Products
Enhance Portfolio of
Internal
Internal Create Partnerships
and Alignment
Goods & Services
ahead of Competitors
processes
processes within TCCS
Maximise Procurement Maximise Operations Maximise Distribution
Efficiency/Effectiveness Efficiency/Effectiveness Efficiency/Effectiveness

People
People Enhance Employee Skills
Strengthen and Foster a Use Existing Information
Culture of Accountability to Make Better Decisions
 Ulrich: Competing from
the inside-out
‘For any organisation to compete successfully in today's market, it must
focus on building not only from the outside but from the inside as well.’

Shared
Talent Speed
Mindset

Quality of
Learning Accountability Collaboration
Leadership

Source: Ulrich, D., Organisational Capability: Competing from the Inside Out, 1990.
Ulrich, D. and Smallwood, N., Why the Bottom Line Isn't. 2003.
 Nohria: What really works

Four primary practices: Two out of four secondary

practices:
• Strategy • Talent
• Execution • Leadership
• Culture • Innovation
• Structure • Mergers and partnerships

Source: Nohria, N., Joyce, W. and Roberson, B.,

What Really Works, Harvard Business Review, July, 2003
 Bassi: Maximising
return on people

Total Stock Return (%) Subsequent

Year Relative to Other Financial
• Leadership 30
• Employee
engagement

Institutions
• Knowledge
0
accessibility
• Workforce
optimisation
• Learning capacity -30

-20 0 20

HCM Maturity Score Relative to

Other Financial Institutions
 Human Capital
• Health, capability and engagement of
people working for the organisation

• Is owned by the individual not the

organisation

• Will only be invested for as long as the

investor is well cared for and receives an
appropriate return
 Engagement

People
Benefits
Talent
Health & Wellness
(organisational factors that

Social
“Great Pensions “Great
influence engagement)

networks
Engagement drivers

rewards” company”

Compensation Articulation Organisation

and delivery
Base Image
of the deal
Incentives Culture

Career &
Work Content
Development
Practices
Training
Experience
Job security

“Great job”
 Organisation Capital

• Organisation structure, business processes, cultural

attributes

• Do not result in an effective organisation on their own,

but severely constrain performance if they are not
aligned with the business strategy
 HCM is the management human
capital
• HCM is the management of organisation capability
(particularly human capital)
• It treats people as a key source of human capital and
competitive advantage

• Versus
• Human resource management, which treats people as
resources to used to support the execution of business
strategy
• Personnel, which treats people as the subject of
personnel policies
 HCM Value Triangle

Human Capital • Driving and accelerating business strategy

Management • Creating opportunity for the future
Create • Maximising the potential of people
value • Dealing with the intangibility of human capital
Human Resources
• Focussing HR on business strategy
Add • Creating capability to perform now
value • Ensuring effectiveness and alignment

Personnel
• Administering HR operations
Value for • Ensuring efficiency e.g.
money through outsourcing
 HCM Value Triangle:
recruitment example
Human Capital • Developing an employer brand to position an
Management organisation as an employer of choice, and by
Create doing so, significantly increasing its potential
value to grow
Human Resources
• Helping a business achieve its growth
Add objectives by launching a campaign to
value fill a number of new positions

Personnel
• Automating relationships between
Value for suppliers, HR and line
money management to reduce the time to
fill vacant positions
 HCM Creating Value

Characteristics Consequence

• Driving and accelerating • Business strategy follows people

business strategy strategy (some of the time!)

• Creating opportunity for the • Innovative, best fit approaches

future to people management

• Maximising the potential of • Focus on, and personalisation to,

people individual employees

• Dealing with the intangibility • Understanding of complexity:

of human capital everything affects everything else
Innovative, best fit approaches

These employees need:

- Meritocracy
- Opportunity to use new
IT
HR processes emphasise:
Business needs:
- Opportunities
- Brightest minds in IT
- Balance work and life over
- Their engagement
life
 Personalisation to individuals

The role of work:

• Expressive legacy
• Secure progress
• Individual expertise and team success
• Risk and reward
• Flexible support
• Low obligation and easy income
Inside the ‘Black Box’
Box’ at RBS
 In summary, HCM:

 Focuses on the management of organisation capability

 Informs the business strategy

 Uses innovative, best fit approaches

 Is personalised to individuals

 Deals with intangibility

 Uses knowledge to understand complexity