Introduction on Human Capital Activities Essays
The Accounting for People Task Force Report (2003) stated that HCM involves the systematic analysis, measurement and evaluation of how people policies and …show more content…
Sometimes human capital is called intellectual capital to reflect the think¬ing, knowledge, creativity, and decision making that people in organizations contribute. For example, firms with high intellectual capital may have technical and research employees who create new biomedical devices, formulate prod¬ucts that can be patented, or develop new software for specialized uses. All these organizational contributions illustrate the potential value of human capi¬tal. A few years ago, a Nobel prize-winning economist, Gary Becker, expanded the view of human capital by emphasizing that countries managing human capital better arc more likely to have better economic results.'
The importance of human capital in organizations can be seen in various ways. One is sheer costs. In some industries, such as the restaurant industry, employee-related expenditures may exceed 60% of total operating costs. With such significant levels comes an increasing need to measure the value of human capital and how it is changing through HR metrics.
To look at Human Capital Management more specifically, it has four basic functions: staffing, training and development, motivation and maintenance.