The Nature of

Human Capital Management

Session 1
Human Capital Lifecycle
Human Capital Lifecycle

Planning •NSF’s Human Capital Management

Plan establishes strategic goals and
Transitioning
Integration of HC
strategy with org
Recruiting
supporting action strategies for each
strategy (e.g, through
competency -based HR
system)
operational component of the NSF
Competencies of
HC professionals
Characterization
of HRM Division
Human Capital Lifecycle.
HC Management Automation
Roles &
Responsibilities
of HC
capabilities
•Foundational areas are addressed in a
Motivating
Educating separate, complementary plan that
identifies specific goals and action
strategies for NSF’s Division of Human
Developing
Resource Management.
Operational
Foundational
Components: Used to
Areas: Organization’s
execute and implement
ability to manage human capital management
human capital strategies and policies
Difference Between Human Capital Management
and Human Resource Management?
• Human resource management (HRM) primarily focuses on
core administrative HR functions such as maintaining
employee records and administering benefits. Human
capital management is a broader term that includes HRM
functions as well as strategic functions such as analytics and
performance management.
• Human capital management works to maximize the value
and ROI of the people in an organization. Human resource
management works to create and manage the systems and
processes that are needed to acquire, train, and retain the
organization’s workforce.
Human Resources (HR)
• The people an organization employs to carry out various
jobs, tasks, and functions in exchange for wages, salaries,
and other rewards.
• The comprehensive set of managerial activities and tasks
concerned with developing and maintaining a qualified
workforce—human resources—in ways that contribute to
organizational effectiveness.
Fig. 1.1 Basic Functions of Human Resource Management
Contemporary HRM Perspectives
• Recognizing the importance of people as a source of
competitive advantage
• Hiring, rewarding, and managing people effectively within
the limits of the law
• Balancing legal and ethical concerns with the needs of the
organization
HRM in the Electronic Age
• Electronic technology has not drastically affected how
human resources are managed, but certainly is now
affecting how HRM systems are delivered.
• e-HRM (electronic HRM) uses web application technology
to provide an on-line real-time solution.
• Two features are combined together in e-HRM: use of
electronic media and participation of users.
HR Analytics
• HR Analytics is going to have a big impact on organizations
in years to come.

• Through application of statistical techniques (e.g.,

regression analysis, cluster analysis, factor analysis etc.) and
synthesis of multiple sources of data HR Analytics works as
a decision support system and provides much needed
business insights to HR professionals.
Fig. 1.2 Goals of Human Resource Management
Psychological Contract
• The overall set of expectations held by the employee with
regard to what he or she will contribute to the organization
and that are held by the organization with regard to what it
will provide to the individual in return.
HR Management as a Staff Versus Line Function
• Line managers
– Are directly responsible for creating
goods and services.
• Staff managers
– Are responsible for supporting line management’s efforts to
achieve organizational roles and objectives.
• Organizations have blurred this distinction.
Fig 1.3 The Human Resource
Management Function at Shell Oil
Human Resource Management System
• An integrated and interrelated approach to managing
human resources that fully recognizes the interdependence
among the various tasks and functions that must be
performed.
Fig 1.4 A Systems View of Human Resource Management
Role of Human Resource Professionals

• First, HR can play the vital role of strategic execution and

thereby take a strategic partner’s role.
• Second, it can bring forth the much needed administrative
efficiency in the workplace.
• Third, it can take employee championing role by helping
employees to voice their concerns
• Finally, HR can become a change agent.
Objectives of HRM

The stated HRM objectives can be summarised under four specific objectives:
societal, organisational, functional and personnel

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Table: HRM Objectives and Functions

HRM Objectives Supporting Functions

Legal compliance, Benefits, Union-
Societal Objectives
management relations
Human Resource Planning, Employee
relations, Selection, Training and
Organisational Objectives
development, Appraisal, Placement,
Assessment
Functional Objectives Appraisal, Placement, Assessment
Training and development, Appraisal,
Personal Objectives
Placement, Compensation, Assessment

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Functions of HRM
Human Resources management has an
important role to play in equipping
organisations to meet the challenges of
an expanding and increasingly
competitive sector. The functions are
responsive to current staffing needs, but
can be proactive in reshaping
organisational objectives. All the
functions of HRM are correlated with
the core objectives of HRM.
Additionally, external forces—legal,
economic, technological, global,
environmental, cultural/geographic,
political, and social—significantly affect
how HR functions are designed,
managed, and changed.

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