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Addressing the Challenges of Today’s Human

Capital Management

Ravi Sivalingam

2013

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Glossary

1. An Overview & Synopsis of Human Capital Management . . . . . .. . . . . . . . . . . . 3

1.1 Critical Human Capital Management Factors . . . . . . . . . .. . . . . . . . . . . . . . . . . . 3

1.2 Overview of DiscussionPaper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . 5

2. Key Issues andChallenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.1 R & R - Retaining andRecruiting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.2 WEC - Workplace environment & culture that enhancesperformance . . . . . . . . . . . 5

2.3 Understanding consumer’s requirements . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . 6

2.4 Increasing the diversity of talentpools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . 6

3. How these Human Capital Issues affect our Industry in SouthEast Asia . . . . . . 7

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3.1 Retaining andRecruiting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3.2 Environment &Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

3.3 Increasing the talentpool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

3.4 Understanding Consumers &Stakeholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

4. Implementation and Control Action Plan . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 9

4.1 A clear and strategic Direction . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . 9

4.2 Consumer/ StakeholderObjectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

4.3 Objectives tomeet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

4.4 Action Plan . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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4.5 Contingency . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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4.6Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

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5. Effective Management of Proposed Changes . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 12

5.1 Progress Document . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

5.2 Survey Form . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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6. References . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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7. Appendix. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . 18

1. An Overview & Synopsis of Human Capital management

Human capital management is the discipline that involves the

alignment of people who work for or with an organization and the

efficient management of people to achieve goals or objectives

defined by the organization. Primarily it is the most important

success factor for any organization, company or industry as

without the proper management of human capital; businesses big or

small are doomed to suffer the consequences of human capital

mismanagement.

Therefore human capital management involves these key factors

that are crucial to the sustainment of any organization that

requires people to function:

1.1 Critical Human Capital Management Factors include

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A. The Strategic Alignment of the talent employees have and how

it is used to subsequently achieve the company’s vision or

mission (objectives)

B. The qualities that the leadership possesses and how they

manage the Knowledge that is available

C. Creating a culture within the organization that is “Results

Oriented”

D. Managing talents

E. Accountability.

These factors should be defined specifically and aligned towards

the organization being able to meet set targets, adaptation to

change and delivering value towards the consumers and

stakeholders that are within the organizations environment.

“Smith (1776) argues that managing human capital is crucial to

bringing productiveness towards labor” An Inquiry into the Nature

& Causes of the Wealth of Nations

According to Maslow (1948) and the concept behind the Hierarchy

of needs also highlights certain factors that can be conclusively

used in the management of human capital as it stipulates that

every level of need desired in the pyramid is the motivational

factor that causes individual personnel to perform better to

attain the next level of need. The fact that the theory is based

on ‘self actualization’ is an important element that can be

utilized to manage human capital in certain aspects.

Figure 1 Maslow’s Hierarchy of Needs

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Figure 2 Maslow’s Hierarchy of 5 needs briefly explained

1.2 Overview of This Discussion Paper

Self Actualization

EsteemSocialSafetyBasicThe realization of self fulfillmentRecognition and achievement

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This discussion paper seeks to address the challenges of managing

human capital at the present times that are fast paced and the

importance of talent acquisition and managing the abilities of

human resources via human capital management. The key issues or

the critical factors pertaining to human capital management will

be identified in relation to the company and its human resources

based at its current business location and how the current

policies and practices affect the organization. It will then seek

to rectify and attempt to propose a solution from the resultant

identified criteria accordingly.

A proposed solution will be drawn in the conclusion as a

potential action plan that the organization may utilize to

significantly increase the efficiency of human capital

management.

2 Key Issues and Challenges

2.1 R & R - Retaining and Recruiting

One of the major issues is retaining key personnel as the demand

for capable employees who are proactive and result oriented is

high. Coping with the offers and counter offers they receive is a

costing factor that need to be addressed and a solution devised

for a way to keep good staff. Identifying and attracting human

capital is also a crucial and vital element in the human capital

management factor.

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2.2 WEC - Workplace environment & culture that enhances

performance

Another factor that has come to light is the fact that the

working environment itself is either a contributing factor in the

efficiency within the human capital management issue. Conducive

environments and couple to a positive culture have been noted to

deliver better performances from staff in a direct manner towards

the goals and objectives of the organization. The criterion that

is in question here also includes:

Pallet (2012) - Strategic Importance of Workplace Culture - MediatecPublishing “ According to the journal, it stipulates that“culture should be considered as key performance indicators thatis in line with an organizations objectives, however thechallenge in it is to get the leadership of the management to buyin and raise the culture until it becomes strategic priority”

Table 1

Internal

Comfort

Organization Culture

Benefits & Reward

Elements

Leadership styles

Recognition

External

Social & cultural factors

Competitors

Development Possibilities

2.3 Understanding consumer’s requirements

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Understanding the customers and being able to cater to customers

in the best possible manner at all levels of management is a

critical success factor that must be instilled and synergized

with the workplace culture.

2.4 Increasing the diversity of talent pools

Increasing the talent pool by the removal of societal advantages

or disadvantage is a strategy that is already taking place. Due

to demographic changes populations and their ethnic and religious

compositions have been rapidly changing at a drastic pace. This

element directly affects the target consumers as well as the

talent pools that organizations attempt to attract.

Our aim is to create a diverse workforce that is representative,

throughout all levels of management in this organization.

Workforce Diversity encompasses “learning, creativity,

flexibility, organizational and individual growth, Our priority

is to have policies, programs and services that are relevant,

responsive and culturally competent serving the companies vision

and mission statements

Adopted from:http://novascotia.ca/psc/employeeCentre/diverseWorkforce/

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3. How these Human Capital Issues affect our Industry in South

East Asia

Figure 3. Human Capital Issues

3.1 Retaining and Recruiting

The moment an existing employee leaves due to dissatisfaction or

simply because they have been offered a better position increases

the operating cost of the company. This would invoke a

recruitment process that will see the human resources department

moving into action in hiring a replacement. The new replacement

will then be put through the on boarding cycle for the selected

Industry

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candidate to get accustomed to the culture of the company and at

the same time create negative ripples as the work progress of the

former employee is stalled or delayed until the new employee is

trained to perform the functions and duties of the previous

employee that he or she is replacing.

3.2 Environment & Culture

Having the right type of environment for employees to function in

creates a better venue for productivity. Beginning with

identifying issues that employees are not happy with according to

the list below and addressing them promptly within a given time

frame might increase the productiveness of our existing employees

as well as support our employee retaining effort as it will

create a sense of loyalty that would make it difficult for them

to leave their company and culture that they have become

familiar, accustomed and comfortable with.

The elements that would be critical in creating the right

environment and culture would include:

Health and Safety

Fringe Benefits

Training & Development

Comfortable working Conditions

On-Boarding Facilities

3.3 Increasing the talent pool

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The current standing of the current talent pool due to

‘stereotype approaches’ have caused the talent pool to remain

stagnant. Expatriates have often been expected to be replaced

with ‘other expatriates’ when there are capable candidates that

are local and in most cases more competent than expatriates who

demand huge salaries for lesser competencies that locals are able

to offer. As such all future positions shall be open to only one

factor – COMPETENCY – not ethnicity or cultural background based

on race or religion. This directly omits the possibility of the

company being labeled ‘discriminative’ in any manner.

3.4 Understanding Consumers & Stakeholders

Last but not least, understanding our customers and stake holders

at every management level is crucial for the organization to

serve their clients better. From the lowest management level to

the highest management level every single employee should be

given appropriate understanding on how they would be able to

serve consumers better from their current designated posts

4. Implementation and Control Action Plan

Implementing and controlling the required implementation requires

a stage by stage control action plan that needs to be monitored

at every level of progress. This Implementation Plan identifies

the actions that are necessary to be undertaken to achieve this

retreats objectives by the managers that are attending it. The

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following is a brief overview of the major themes presented in

the Human Capital Plan management concept that will be undertaken

to achieve the desired results.

Figure 4 – Action Plan Process:

4.1 A clear and strategic direction

This stage is to identify the core elements based on the issues

faced and address key areas or factors that create the negative

issues through methodological surveys of key personnel input

(random selection of 10 personnel from each of the 5 levels of

management in the organization)

From these inputs it is imperative to devise solutions that will

neutralize the negative effects that stem from its existence.

Each manager will be assigned a single level of management with

A clear and defined strategic direction - 8 weeksConsumer/Stakeholders Human Capital Objectives - 1 weeksObjectives to accomplish - 1 weekAction Plan - 1 weekContingency - 1 weekImplementation - 5 weeks

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two supporting subordinates. The time frame allocated for this

first stage is 8 weeks and a weekly briefing on the progress of

the identification. On the 6th week, all managers present here

will have a progress meeting to follow up on each manager’s

assessment of their respective management levels. A decision will

be made in the following two meetings on the 7th week and the 8th

week on the strategic direction that this human capital

management team will be moving towards.

4.2 Consumer/ Stakeholder objectives

After the identification of the core elements that are the basis

of the challenges faced by the organization in their human

capital management efforts it is vital to streamline the

consumer/ stakeholder objectives with the company’s mission and

vision. This stage involves a collaborative effort of all the

managers present. Each manager will streamline the proposed

strategic objectives concluded on the 8th week of stage one into

the accomplishment of meeting the consumer/stakeholder

objectives.

4.3 Objectives to Accomplish

After the streamlining of the identified elements and change

factors that need to be undertaken the managers are required to

formulate the new objectives of this group and match it against

the organizations missions and visions. It is imperative that the

defined objectives that need to be accomplished are within the

scope of the company objectives and has substantial factors that

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enhance the accomplishment of the company’s objectives as a

priority factor. These new set objectives are to be catalyst

towards the company’s goals. All managers must specify in detail

how the new set objectives will be implemented and at the same

time act as supporting factors in assisting the company’s

ultimate objectives in the industry.

4.4 Action Plan

At the current position, this is just a preliminary order of what

is to be auctioned, and to act as a guide that this retreat is

aiming to accomplish. It is a basic guide that will be revised

after the input from all the attending managers here is taken

into account and analyzed before formulating a follow up plan.

4.5 Contingencies

A contingency response method is also required from each planning

unit, in the event of an emergency to control undesired reactions

towards the implementation by any segment that may or may not

receive the proposed change with open arms.

“An organization’s meeting with cultural and structural

differences is practically unavoidable due to the constant change

in human affairs such as

Technology

Customer and markets mindsets

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Social and political issues

Demographic characteristics.

Resistance to change is an emotional factor that unleashes a

behavioral response by the individuals that are affected by them

directly or indirectly. Therefore it is crucial for organizations

to manage change and subsequent resistances in order to survive.”

Source:

http:// smallbusiness. Chron . com/resistance-change-

organizations-structure-culture-16622.html

4.6 Implementation

The implementation process is expected to be concluded in 5 weeks

at all levels. A weekly progress report is expected at the end of

every week based on feedback and accomplishment of set goals. All

managers are required to adopt the format of the progress

document according to the level of management that they will be

in charge off. All documents are to be kept strictly private and

confidential. Managers are not allowed to disclose any

information contained within the survey forms obtained from

employees and their feedback is to be taken conclusively and

constructively. Employee’s feedback is vital and as such a

negative feedback will be as appreciated as a positive feedback

with regards to the organizations management procedures and

concepts.

Week 1 Survey forms to be distributed and collectedWeek 2 an analysis of the feedback and a formulation of issues that need to be addressedWeek 3 Formulation of Action plan need to be addressedWeek 4 – 8 Implementation

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5. Effective Management of Proposed Changes

Each manager will be accorded a progress document that he will

need to fill and submit to me every Friday beginning the

conclusion of this retreat the proposed progress document will be

formatted in such a way that it will be revised each week to

enhance the efficiency of the implementation. However the

progress documents will be mainly monitoring the effectiveness of

the proposed implementation via feedback from the selected

management level staff. The feedback element for each week is to

be filled by a representative in a supervisory designation who

will be put in charge by the manager that is responsible for the

management level. The feedback element is crucial to monitor the

success of this task that we are about to undertake. The

following survey form is to be delivered to 10 – 20 employees in

each department and completed survey forms are to be collected

and analyzed within one week. The following is a Gantt chart of

the entire proposed plan for this task:

Figure 5 Gantt Chart

Activity Timeline

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6

Week 7 Week 8

Week 4 – 8 Implementation

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5.1 The Progress Document

Team Leader: ______________________________________

Please select/ circle the relevant management Level

Level 1 Level 2 Level 3 Level 4 Level 5

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Implementation percentage

10 % 20 % 30% 40% 50% 60% 70% 80% 90% COMPLETE

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Feedback Report

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Notes: ……………………………………………………………………………..

……………………………………………………………………………………..

……………………………………………………………………………………..

Feedback by Department

Department

o HR

o Accounts

o Purchasing

o Operations

o Maintenance

o Sales

o PR

Branch: ________________________

Department Manager: ________________________

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Department Assistant Manager: ________________________

Feedback

Notes: ……………………………………………………………………………..

……………………………………………………………………………………..

……………………………………………………………………………………..

Recommendation

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Notes: ……………………………………………………………………………..

……………………………………………………………………………………..

……………………………………………………………………………………..

5.2 Survey Form

Employee

Name: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . .

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Employee Designation: . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . .

Duration of Employment: . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . .

Please answer the following questions:

1. How can the organization help me serve the objectives of the

company better?

2. How can the workplace or environment be improved?

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3. Are you in the right department? If not, state your reasons.

4. Do you have any ideas on how the organization would be able to

perform better?

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Notes: ……………………………………………………………………………..

……………………………………………………………………………………..

……………………………………………………………………………………..

6. Referencing

o Smith 1776. Wealth of Nations

o Maslow 1948. Hierarchy of Needs

o Pallet (2012) - Strategic Importance of Workplace Culture -

Mediatec Publishing

o Diversity of Talent Pools,

http://novascotia.ca/psc/employeeCentre/diverseWorkforce/

o Resistance to change

http://smallbusiness.Chron.com/resistance-change-

organizations-

7. Appendix

o Figure 1 Maslow’s Hierarchy of Needs (page 4)

o Figure 2 Maslow’s Hierarchy of 5 needs briefly explained

(page 4)

o Figure 3 Human Capital Issues (page 7)

o Figure 4 – Action Plan Process (page 9)

o Figure 5 Gantt Chart (page 12)

o The Progress Document (page 13)

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o Survey Form (page 16)