Knowledge management is about getting knowledge from those who have it to those who need it in order to improve organizational effectiveness. for full article : www.mohamed-sabry.com/blog-posts

human capital management (HCM)

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human capital management (HCM) is concerned with obtaining, analyzing and reporting on data that inform the direction of value-adding people management, strategic, investment and operational decisions at corporate level and at the level of front-line management.

The nature of human capital management

The Accounting for People Task Force report (2003) stated that HCM involves the systematic analysis, measurement and evaluation  of how people, policies and practices create value.

The report emphasized that HCM should be regarded as an approach to people management that deals with it as a high-level strategic issue rather than a matter to be left to HR.

However, Wright and McMahan (2011: 102) warned that human capital should not be treated as a form of capital owned and controlled by the firm:

‘To do so would miss the complexity of the construct and continue to ignore the “human” in strategic HRM.’

The defining characteristic of HCM

is the use of metrics to guide an approach to managing people that regards them as assets and emphasizes that competitive advantage  is achieved by strategic investments in those assets through employee engagement and retention, talent management and learning and development programmes.

HCM relates HR strategy to business strategy. The concept of HCM is underpinned by the concept of human capital, as explained below.

The concept of human capital

Human capital consists of the knowledge, skills and abilities of the people employed in an organization.

Each individual in the organization  has characteristics that comprise human capital.  He/she also engages in the processing of information, interpretation and reaction to that information  in making choices about how to feel and behave.

The aggregation of human capital, we propose,  constitutes the organization or unit’s ‘human capital’.

Human capital constitutes a key element of the market worth of a company. A research study conducted in 2003 by CFO Research Services  estimated that the value of human capital represented over 36 % of total revenue in a typical organization.

The constituents of human capital

Human capital consists of intellectual, social and organizational capital.

Intellectual capital

The concept of human capital is associated with the overarching notion of intellectual capital, which is defined as the stocks and flows of knowledge available to an organization. These can be regarded as the intangible resources associated with people, which together with tangible resources (money and physical assets) comprise the market or total value of a business.

Social capital

Social capital is another element of intellectual capital. It consists of the knowledge derived from networks of relationships within and outside the organization.

Social capital has been defined by Putnam (1996) as ‘the features of social life – networks, norms and trust – that enable participants to act together more effectively to pursue shared objectives’.

It is important to take into account social capital considerations, that is, the ways in which knowledge is developed through interaction between people. Bontis  (1999) commented that it is flows as well as stocks that matter. Intellectual capital develops and changes over time and a significant part is played in these processes by people acting together.

Organizational capital

Organizational capital is the institutionalized knowledge possessed by an organization that is stored in databases, manuals, etc (Youndt, 2000). It is often called ‘structural capital’ by (Edvinson and Malone, 1997), but the term ‘organizational capital’ is preferred by Youndt because, he argues, it conveys more clearly that this is the knowledge that the org...

Human resource management (HRM)

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Human resource management (HRM) is a comprehensive and coherent approach to the employment and development of people. HRM can be regarded as a philosophy about how people should be managed, which is underpinned by a number of theories relating to the behaviour of people and organizations.

It is concerned with the contribution it can make to improving organizational effectiveness through people but it is, or should be, equally concerned with the ethical dimension – how people should be treated in accordance with a set of moral values.

HRM involves the application of policies and practices in the fields of organization design and development, employee resourcing, learning and development, performance and reward and the provision of services that enhance the well-being of employees. These are based on human resource (HR)strategies that are integrated with one another and aligned to the business strategy.

Some people object to the term ‘human resources’ because it implies that people can be manipulated like any other factor of production. Instead they favour ‘people management’. But HRM is the most commonly used term.

‘Positive job attitudes for workers in an organization can be expected when the natural inclinations of the persons there are allowed to be reflected in their behaviours by the kinds of processes and structures that have evolved there.’

HR work is now ‘largely framed as a business issue’. The emphasis is on business alignment and strategic fit. These are important requirements but focusing on them can lead HR professionals to place correspondingly less emphasis on employee needs and motivations

when developing their new and altered arrangements. A simplistic view of the business imperative permits little room for considering how HR strategy should impact on individual employees.

HRM indeed aims to support the achievement of business goals but, equally, it should aim to build a relationship based on trust, openness and personal fulfilment.

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Employers Struggle To Hire Hourly Workers As Turnover Rises

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Seventy percent of service industry employers are finding it difficult to hire for hourly positions as turnover rates—and costs—are rising.

a workforce management platform, found that finding enough high-quality candidates  is their biggest challenge as hiring needs have increased.

Two-thirds of respondents said they need more applicants than they receive and 60 percent are unsatisfied with applicant quality. The survey also showed that turnover is one of the industry’s biggest workforce problems.

Respondents reported the annual turnover rate for their hourly employees to be 49 percent, with an average cost of $4,969 per employee. Respondents also reported year-over-year turnover increases of 39 percent for hourly workers and a staggering 314 percent increase in turnover for managers. With hiring picking up, finding high-quality candidates is a priority, but 90 percent of respondents said that they don’t find it easy to recruit enough qualified applicants.

Respondents reported that most service industry workers are recruited through employee referrals (71 percent), followed by the company website (59 percent), job boards (59 percent), walk-ins (48 percent), social media (34 percent) and local advertising (34 percent).

 

Notably, outside recruiters are the top recruitment channel by volume, whereas the top source by quality is social media. Quality social-media-sourced applicants rose 28 percent this year against walk-ins and 15 percent against employee referrals, according to the survey.

The recruitment channels that respondents are the most dissatisfied with regarding the volume of applicants received are internal candidates (72 percent), local advertisements (71 percent) and walk-ins (71 percent).

HR Too Optimistic?

One of the more interesting trends the survey uncovered was a large disconnect between managers and HR professionals. General and store managers reported critical hiring functions as significantly bigger problems than their HR colleagues did.

Managers were 109 percent more likely to say finding enough qualified candidates is very difficult compared with HR, and 90 percent more likely to strongly agree they need more applicants per opening to find the right person for the job.

A competency model refers to a collection of competencies that are needed for effective job performance

HR Audio Article : what is a competency?