Use Organizational And Market Data To Conduct Human Capital Management Functions Labour force is undeniably the most imperative factor of production in an organization. They come up with novel inventions, use creativity to make the firm more cost-effective, provide quality services, and establish long-standing links with consumers. Together all the people employed in a firm with their combined knowledge, expertise and skills are termed as ‘human capital’. They are the only resource who can administer and realise the full potential of other assets. It is only they who can reinvent procedures, commodities, working practices in order to give the organization a competitive edge.
In today’s globalised market, long-standing success is determined not by the commodities it provides but rather the work force involved in producing them. The economic worth of an individual’s knowledge and capability can be defined as human capital measurement. Not only independent employers but the economy too greatly benefits by the level of education, expertise, and proficiency of its labour force. The supply and flow of work force is fundamental in overcoming competition. The capital assets employed by a firm continue to be integral but their importance has relatively declined.
This trend can be attributed to crucial transformations in economic climate. For instance, escalation commodity complexity and innovation, reduced product lifecycles, novel work descriptions and remodelling organizational structure, accelerating amount and complication of labour laws and the like (Conaty & Charan, 2011). Human Capital Management (HCM) denotes managing personnel-related issues for management and workforce, ranging from the stage of recruitment to retirement. Generally, the primary functions constitute recruitment, staffing plans, personnel and employee benefit plans, payroll, career opportunities, performance appraisals, non-monetary reward management, work conditions management etc.
The Human Resource Department utilizes internal as well as external data for executing its functions. The internal data can be seen as organizational data and the external comprises of a wide variety of data obtained from market, industry, government, agencies etc. Organizational data concerning vacancies, retirements, labour turnover ratios assist in the recruitment process. The internal data related to a vacant job is used by HRM to draft job specification, job description and then match the appropriate candidate with the criteria.
Likewise, market conditions such as a downturn in industry, accelerated technological use can indicate if the company should reduce its staffing needs for the coming year. Wages play an imperative role in recruiting, retaining, and providing job satisfaction to workers. Data related to industry averages and competitors in the market helps in establishing appropriate wage levels and wage differentials. Similarly, wages need to be linked with the general market conditions such as inflation, boom, or unemployment in the industry (Merkle, 1980). Workers need to fulfil not only their monetary but self-actualization, social and self-esteem needs at work.
Therefore, they seek promotions, career opportunities, and compensation. In today’s global market, the right kind of workers who make an organization cannot be retained without addressing these needs. Organizational data is used for conducting appraisals that evaluate an individual’s performance in order to determine promotions, training needs, monetary or non-monetary compensations etc. Off course, these steps are not taken in isolation from market practices. Moreover, working styles have significantly altered, with democratic leadership style and workers becoming empowered. Market data provides useful information concerning any new working practices introduced by competitors that accelerate worker productivity such as the growing trend of kaizen, just in time, quality controls, outsourcing etc. References Conaty, B., & Charan, R.
(2011). The Talent Masters: Why Smart Leaders Put People Before Numbers. New York: Crown Publishing Group. Merkle, J. A. (1980). Management and Ideology: The Legacy of the International Scientific Management Movement. California: University of California Press.